One-third (32%) of Canadians are predicting that the Bank of Canada will begin to cut interest rates next week, while 42% are believe no cuts will be forthcoming.
According to a survey of 1,500 Canadians conducted by Dye & Durham, two-thirds (65%) of Canadians said lower interest rates will make a meaningful, positive impact on their personal financial well-being. The current rate level resulted in nearly two-fifths of respondents (38%) holding off on making major purchases during the past year. However, more than half (57%) of respondents intend to wait for significant cuts before they make larger item purchases.
Most Canadians believe lower interest rates will make it more affordable for covering mortgage costs (81%), the purchase price of a new residence (70%), the sale price of a home (66%) and home renovations (65%). For those planning a major spend once rates begin to decline, the most common purchases are a new car (15%), a new residence (14% overall, 24% for renters) and a significant home renovation project (12%).
“It’s clear that higher rates have done their job, cooling consumer spending significantly and helping to bring inflation down to much more manageable levels,” says Martha Vallance, chief operating officer at Dye & Durham. “Consumers have said they’re ready to start spending again and are just waiting for the Bank of Canada to make its move, though few should expect rates to return to where they were before. Industries like real estate, automotive sales, construction and more – along with those industries that play critical roles in supporting them – should take note and prepare for a fast-moving market once meaningful cuts are made.”
