Relief welcomed with more expectations

By Shazia Nazir, Local Journalism Initiative Reporter, The Milton Reporter

The Bank of Canada’s decision to lower its policy interest rate to 4.25% for the third consecutive time has sparked varied reactions across Milton, Oakville, and Burlington. Residents and local experts weigh how the latest 25-basis-point cut impacts them and what to expect.

In Milton, Jessica Patel, a first-time homeowner, expressed cautious optimism about the rate cut. “Any relief is welcome, but with prices still high for everything from groceries to housing, I’m not sure how much this helps in the short term,” she said. Patel, who bought her home just before interest rates started climbing, is watching closely to see how changes will impact her variable-rate mortgage. “I hope this is a sign that things are improving, but I’m still nervous about making long-term financial decisions right now.”

Local realtor Suhail Rana, who works in the Halton region, shared a more specific outlook for Milton. “The interest rate will likely reduce further, but the market in Milton is likely to remain hot,” he said.

“Milton has always been the most desired place for immigrants and is also the fastest-growing town economically. The demand here remains robust despite rate fluctuations, which suggests that the real estate market may stay competitive.”

Sal Guatieri, Senior Economist at BMO, echoed Rana’s observations. “True to its word, the Bank of Canada lowered its policy rate target another 25 basis points to 4.25%, the third reduction in three months. The Bank continues to signal more policy easing ahead, likely at the next announcement date on October 23, to address rising unemployment.”

In Oakville, John Wong, a local hardware store owner, said the rate cut is a positive step but not enough to jumpstart major business investments. “We’ve been holding off on expanding our inventory and hiring more staff. This cut helps, but it’s not the game-changer I was hoping for,” he said.

Wong, who took out a business loan last year when rates were higher, is cautiously optimistic but says he’s waiting for more substantial cuts before making any big moves. “It’s a wait-and-see situation. If they lower it again, then maybe we’ll move forward.”

Guatieri’s forecast could provide some hope for Wong and other small business owners. “Canadian mortgage holders should anticipate further rate relief after borrowing costs peaked late last year,” Guatieri said, suggesting more reductions could be on the horizon.

Meanwhile, in Burlington, Sarah Miller, a young professional looking to buy her first home, was more optimistic. “For someone like me, who’s been saving for a down payment, these rate cuts are encouraging,” she said.

“I’ve been waiting for the market to cool down and for rates to drop so I can finally take the plunge into homeownership. This move by the Bank of Canada is a step in the right direction.”

Miller, like others, is also keeping a close eye on future announcements. “It sounds like they’re going to keep cutting rates, which gives me a little more confidence to start looking at houses seriously,” she added.

Guatieri’s comments on the Bank’s approach echoed the sentiment of many Canadians who are still on the fence. “The Bank continues to signal more policy easing ahead, likely at the next announcement date on October 23, to address rising unemployment,” Guatieri said, pointing to the ongoing economic adjustments that could further ease financial pressures.

As the October 23 announcement approaches, Canadians like Patel, Wong, and Miller are hopeful that further cuts will help them adjust to a post-pandemic economy. For now, many are taking a cautious approach, watching the Bank of Canada’s moves closely to decide when to make significant financial decisions.

With rising unemployment and high costs still weighing on the economy, the latest rate cut offers some relief, but for many, it remains a waiting game to see just how much further the Bank will go to help ease financial burdens.