With the historic non-confidence motion scheduled for a vote tomorrow in the House of Parliament, hesitant first-time homebuyers may be prompted to get off the fence and buy.
That’s because if Canada heads into an election this political uncertainty could put downward pressure on the Canadian dollar. Despite a steady economic forecast for the country, this pressure could quell any movement from the Bank of Canada to raise interest rates in April (when the BoC is scheduled to meet next).
Economists such as Avery Shenfeld, chief economist at CIBC World Markets are already amending their forecasts. Shenfeld now predicts a rate hike could come in July, instead of May, which was his initial projection.
What does that mean for the homebuyer?
You probably won’t see a decline in housing prices or a further reduction in inventory (houses put up for sale) during the spring selling season — when resale and new home sales are particularly robust. And this means you won’t be able to capitalize on a housing price dip — which has been widely predicted throughout Canada — at least, not yet.
Instead, consider the potential election as a signal that first-time homebuyers will continue to have access to historically low interest rates, making it easier for you o get into the market.