Canada: Rate Cuts Can Worsen Affordability | Professional Real Estate Agent Since 1978

After more than 40 years in Calgary real estate, I’ve seen how shifts in interest rates ripple through our local market. Recent research from Canada’s central bank highlights something I’ve watched play out time and again: when rates drop, homebuyer demand jumps almost immediately, while new housing supply takes much longer to catch up. We see a surge in resales within months of a rate cut—typically reaching its peak 18 to 24 months later. Yet, the real boost in new construction doesn’t really kick in for about two years, often because planning and permitting (especially for multi-unit projects) just can’t move any faster. Strong labour markets can push this momentum even further, as more households feel confident to buy and lending conditions loosen up. But ultimately, the researchers confirm what many of us have experienced first-hand: while lower rates can eventually encourage more building, they aren’t a quick fix for affordability. The lag between demand and supply remains a challenge, reminding us that monetary policy alone isn’t enough to address housing pressures in Canada.