As someone deeply immersed in Toronto’s dynamic real estate landscape, I pay close attention to the forces shaping housing affordability. Recent research from Canada’s central bank highlights an important truth: while lower interest rates can quickly boost homebuying activity, supply takes much longer to catch up. For example, after a rate cut, home resales tend to rise within months, and the full impact is seen 18 to 24 months later. Housing starts, however, usually don’t ramp up until two years down the line.
Strong labour markets and easier lending often make buyers feel more confident, accelerating the pace. Yet for builders, even when conditions improve, the realities of planning, permits, and project viability—especially for multi-unit developments—mean new supply takes time to materialize. Ultimately, rate cuts do help bring new supply, but because demand always leads, monetary policy alone isn’t a complete solution for affordability challenges.
Navigating these complexities for my clients is where experience and strategic advice matter most. Understanding both the timing and impact of these trends helps us make informed decisions and seize opportunities tailored to your goals.
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