How the April Rate Announcement Impacts the Markham Housing Market

How the April Rate Announcement Impacts the Markham Housing Market

On April 16, 2025, the Bank of Canada announced that it would keep its interest rate unchanged, pausing a series of seven consecutive reductions. This decision signals the central bank’s increasing caution amid ongoing global trade tensions and domestic economic uncertainty. For buyers, sellers, and investors in Markham, understanding how this policy made and the Bank’s potential next steps are crucial for making informed decisions moving ahead.

 

Why Did the Bank Pause Rate Cuts?

The pause was largely anticipated by economists. In a March 20 speech, Bank of Canada Governor indicated that without clear shifts in inflation, employment, or trade dynamics, the Bank would avoid making further moves. His remarks emphasized risk management and the importance of avoiding premature decisions in a highly uncertain environment.

Some Important data and information leading up to the April 16 decision:

  • Inflation (CPI) declined slightly from 2.6% to 2.3%, a positive sign but not a major shift.
  • Unemployment edged up from 6.6% to 6.7%.
  • No meaningful developments occurred in the Canada-U.S. trade situation.

Given these modest changes, maintaining the overnight rate at 2.75% was viewed as a cautious and measured response.

What Does This Mean for Markham’s Real Estate Market?

Markham’s housing market has already been adjusting to higher borrowing costs, and the rate pause adds a layer of predictability that can help both buyers and sellers make more informed decisions.

Here’s how the market is shaping up across property types:

  • Detached homes have seen an average 10% price drop year-over-year. Still, transactions are occurring at a moderate pace, with properties taking around 21 days to sell, suggesting the market, while slower, is not frozen. This segment remains in buyer’s market territory.
  • Attached homes (townhouses and semis) have declined by 8% and are facing the highest inventory levels in two years. With only 27% of new listings sold last month, this category is seeing more buyer hesitancy and downward pricing pressure.
  • Condos in Markham are faring better than their downtown Toronto counterparts. Prices have only decreased by 2% year-over-year, though there’s been a notable increase in new listings compared to the previous two years. If demand doesn’t match this supply uptick, prices may come under pressure.

The impact of interest rates on the market now feels more psychological than mechanical. With fewer fears of sudden hikes or cuts, buyer sentiment has stabilized, creating a more balanced environment for making long-term decisions.

Fixed vs. Variable Rates: What to Expect

Fixed mortgage rates which closely ties to bond yields currently sit in the 4.1% to 4.3% range. This is nearly equal to variable rates. Canada’s 10-year bond yield sits around 3.13%, compared to 4.33% in the U.S., reflecting weaker economic growth in Canada and a more dovish policy stance.

What this means for buyers:

  • Fixed-rate mortgages offer stability and are especially appealing for end-users who want predictability during ongoing economic and political uncertainty.
  • Variable rates could yield savings, but only if further cuts materialize later this year, which is not guaranteed unless economic conditions worsen significantly.

Looking Ahead to June 4

The Bank of Canada’s next policy announcement is set for June 4, 2025. Based on current indicators, another hold is the most probable outcome, unless Inflation drops significantly below 2%, or Unemployment rises sharply, or Trade conflicts with the U.S. escalate.

Even then, any potential cut would likely be modest. A large move such as a 50 basis point reduction appears unlikely under present conditions.

Final Thoughts for Buyers and Sellers

As we move deeper into 2025, the rate environment appears to have stabilized. While dramatic changes are not expected, understanding how interest rates interact with economic trends and housing demand is essential.

For those currently buying or selling real estate in Markham, detached homes continue to present opportunities for buyers looking for value and room to negotiate. Attached homes require strategic pricing, as rising inventory and slower turnover have made the market more competitive. Condos remain relatively resilient, though both buyers and sellers should monitor changes in the supply-demand balance.

If you have any questions or need assistance navigating the market, please don’t hesitate to reach out. I’m here to help.

 



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