Published: August 6th, 2024 • Last Updated: February 14th, 2025
Author: Ross Taylor on AskRoss.ca

Richmond Hill News: Bank of Canada’s January 29th, 2025 Rate Cut

The Bank of Canada announced another 25 basis points cut to their policy rate yesterday, January 29th, 2025, bringing it down to 3.0%. This marks the sixth rate cut since June 2024, with the Bank’s policy rate—and by extension, the prime rate—already down 2.0% from its peak. And yes, we’re still expecting more cuts in 2025, with most economists predicting another 75-100 basis points in reductions by year-end. And the reductions could even be larger, depending on the “tariff war” which still has to play out in the months ahead.

This move is part of the Bank’s ongoing effort to support economic growth while keeping inflation in check. The latest data shows inflation sitting comfortably at 1.8%, well within the Bank’s target range. For homeowners, prospective buyers, and anyone carrying debt tied to variable rates, this cut brings some much-needed relief.

Keep reading to learn about how the recent BoC rate cut is affecting Richmond Hills real estate market.

BoC Rate Cut: Richmond Hill Real Estate Market Response News

These rate cuts have sent ripples through the Richmond Hill real estate market, reflecting national trends. The latest January 2025 data paints an interesting picture:

• Median list price sits at $1,645,794, showing a solid 3.62% increase from December’s $1,588,306
• Average selling price reached $1,040,994, up 1.5% from January 2024
• New listings have surged an impressive 48.6% compared to last January
• The MLS® Home Price Index Composite benchmark is up 0.44% year-over-year

The market is showing some fascinating dynamics. While we’ve seen 115 sales in January, overall sales volume is actually down 7.9% from last year.

What’s particularly telling is that 54.3% of homes are selling below asking price, suggesting buyers are maintaining negotiating power despite increased activity.

I’m seeing properties staying on the market longer than last year with the average days on market now at 90 days – nearly double what we saw in January 2024. This extended market time, combined with the surge in new listings, is creating interesting opportunities for both buyers and sellers.

The disconnect between listing and selling prices tells an important story about our current market

While some properties are attracting multiple offers, strategic pricing remains crucial. With the Bank of Canada’s recent cut to 3.0% and economists predicting more reductions through 2025, we could see market dynamics shift further as borrowing costs continue to decrease.

For my clients, whether buying or selling, this market requires careful navigation. The increased inventory and longer selling times mean there’s room for negotiation, but the right property at the right price can still attract significant interest.

For my in-depth analysis of how these economic changes are impacting local real estate, check out my full report here.

What This Means for Richmond Hill Homeowners

If you’re a variable-rate mortgage holder

• You’re already feeling the positive impact. Prime rate now sits at 5.20%, down from 7.20% at its peak – a full 2% reduction.
• On a $500,000 mortgage, this means approximately $500 in monthly payment savings since rates peaked.

For those with fixed-rate mortgages coming up for renewal

• While rates are still higher than the ultra-low rates of 2020-2021, you’re in a better position than six months ago.
• The best 5-year fixed rates are now hovering around 3.99% to 4.79% from major lenders. As always, the lowest rates are reserved for insured mortgages, which are high ratio purchases (less than 20% down payment), or if the mortgage already exists, then it was originally a high ratio mortgage when the home was purchased.
• Keep in mind there are a large number of mortgages renewing in 2025. While these homeowners will likely face higher rates than their previous term (especially if they secured rates during the pandemic), the recent rate cuts have helped ease the potential payment shock.

For example, someone renewing a $500,000 mortgage that was at 2.5% in 2019 will still see an increase in payments, but it’s now about $700 less per month than if they had to renew at peak rates.

For first-time buyers, the stress test is becoming slightly more manageable

• You’ll need to qualify at either your contract rate plus 2% or 8.0%, whichever is higher. With today’s best rates, that means qualifying at around 5.99-6.79% instead of the previous 8.0% minimum.

Bank of Canada’s December 11th, 2024 Rate Cut

Back on December 11, 2024, the Bank of Canada lowered its policy rate to 3.25%. At that point, rates had already dropped a total of 1.75%, and more cuts widely expected in 2025. That December cut helped stabilize the housing market during what’s typically a slower season.

These rate cuts have sent ripples through the Richmond Hill real estate market, reflecting national trends. As borrowing costs decrease, we could see more activity in the housing market, potentially influencing home prices, demand, and investment strategies.

Richmond Hill Real Estate Market Trends

The Richmond Hill housing market has experienced some fluctuations in recent months. As of July 2024, the average house price in Richmond Hill is at approximately $1.3 million, with 411 new listings. The change in average home price is affected by two factors: the amount of home types sold and the overall market conditions.

While the rate cut provides some financial relief, it may not be sufficient by itself to significantly stimulate the housing market.

These high home prices and economic uncertainties continue to pose challenges for potential homebuyers in the GTA.

What are the trends we are seeing in Richmond Hill’s Market?

1. Price Adjustments

There’s been a monthly decrease in median prices, with single-family homes seeing a drop of about 6.25%, adjusting the median list price to around $1.55 million.

Condos and townhomes have also experienced price adjustments but remain a significant segment of the market.

2. Sales Increase

Homes in Richmond Hill are selling faster than last month, with median days on the market reducing significantly. This indicates demand despite the price adjustments, possibly driven by buyers looking to lock in purchases before any further economic shifts​.

3. Diverse Real Estate Offerings

The market caters to a variety of preferences and budgets, with recent listings ranging from upscale homes in the $2 million bracket to more modestly priced condos and townhouses, reflecting the diverse demographics of Richmond Hill residents​.

Mortgage Renewals & Refinancing

Following the Bank of Canada’s rate cuts now is an opportune time to consider mortgage renewal or refinancing options in Richmond Hill. Depending on your short—and long-term goals, refinancing could offer substantial financial benefits.

Here are some refinancing strategies you might consider:

1. Increase your mortgage amount to consolidate high-interest unsecured debt.
2. Extend your amortization period up to 30 years to mitigate payment shock from previously higher rates.

For detailed guidance on how this rate cut could benefit your specific situation, check out my full analysis on renewals and refinancing in our latest article here.

BoC Rate Cut Impact on Affordability

While the anticipated affordability boost from lower interest rates has been slow to impact home purchases in Richmond Hill significantly, there is a noted increase in listings and a slight ease in borrowing costs.

Consumer Outlook – Looking Ahead

Growing optimism suggests Richmond Hill may soon experience a rebound in its real estate market. Prospective buyers should remain well-informed and ready to seize opportunities as they emerge, staying updated on further rate cuts and their potential impacts.

If you’re curious about what economists are predicting for further rate cuts in 2024 / 2025, read our article for the latest insights.

Our July 2024 Newsletter

Canadians should stay informed about future rate changes and consider how these shifts might impact their financial decisions. We publish a comprehensive and informative newsletter every month. Our goal is to keep our clients and readers informed about Canada’s real estate, economy, and rate changes. These letters are read by thousands of Canadians each month. Read July’s newsletter here.

Advice From Ross Taylor Mortgages Richmond Hill

If you’re considering purchasing a home in Richmond Hill or have a variable-rate mortgage, now is an excellent time to review your options and consult with a mortgage professional. We can help you navigate the current market conditions, assess your risk tolerance, and determine the best course of action for your unique situation.

Remember, while the recent rate cut is a positive development, it’s crucial to make informed decisions based on your financial goals and circumstances. By staying informed and seeking expert advice, you can make the most of the opportunities presented by the evolving Richmond Hill real estate market.

As always, I’m here to help. If you have any questions or want to discuss your mortgage options, don’t hesitate to reach out. Together, we can develop a strategy that aligns with your goals and helps you achieve your homeownership dreams.

If you have any questions or want to consult with one of our award-winning mortgage professionals, book your free consultation today.