Toronto Real Estate Gets a Boost: Interest Rates Drop Amid U.S. Trade Tensions
On March 12, 2025, the Bank of Canada announced a 25 basis point rate cut, lowering the overnight rate to 2.75%. For Toronto’s real estate market, this move injects a welcome dose of optimism just as the spring market awakens. Lower borrowing costs typically translate to more accessible mortgages, encouraging buyers to enter — or re-enter — the market. While sales across the GTA had cooled in early 2025 due to lingering economic uncertainty, this rate cut is expected to reignite activity, particularly in the entry-level and mid-range home segments. Buyers who were sitting on the sidelines may now feel confident making a move, and sellers may benefit from a renewed sense of urgency in the marketplace.
Although international headlines have been dominated by growing trade tensions between Canada and the United States, especially in the last two weeks, there are opportunities to be found. President Trump’s administration recently introduced tariffs on Canadian steel and aluminum — a move that, while raising costs for some industries, could also stimulate demand for existing residential properties in Toronto. With higher construction costs potentially slowing down new developments, existing homes may become even more desirable. For homeowners, this positions their property as a valuable and more readily available alternative compared to delayed or pricier new builds.
Another notable development is the U.S. tightening visa rules for Canadians working in certain sectors. While this presents challenges for those seeking cross-border work, it may also encourage more Canadians to invest and settle here at home, particularly in urban hubs like Toronto. As Canadian professionals weigh their options, Toronto’s diverse economy, cultural vibrancy, and world-class amenities make it an increasingly attractive place to live, work, and own property. Additionally, the recent weakness in the Canadian dollar compared to the U.S. dollar is drawing attention from American buyers. For them, Toronto real estate now offers more value for money, and we could see a short-term uptick in U.S. investment, particularly in luxury and downtown properties.
In summary, while global headlines may be turbulent, Toronto’s real estate market is positioned to benefit from both local and international dynamics. The Bank of Canada’s rate cut offers a real financial advantage to buyers, and broader trade developments could strengthen the appeal of existing Toronto properties. Whether you’re buying, selling, or investing, this spring could offer unique opportunities — and I’d be happy to help you navigate them.
Also see First Time Home Buyer’s Help
Wayne Bibby is a Seaton Village resident and real estate agent.
