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The real estate market in Waterloo Region is expected to heat up even more after the Bank of Canada slashed its benchmark interest rate.

The move was designed to soften the economic impact of the COVID-19 outbreak and growing global economic certainty.

In the region, the lower cost of borrowing combined with low housing inventory creates a perfect storm for price increases.

"We expect the spring to be very hot and now, with this new news, I think it's going to be hotter than ever," says Cambridge Association of Realtors President Carole Rothwell.

"Supply is already short, and if there's more buyers in the market, supply will be even shorter."

The Bank of Canada slashed its overnight interest rate by 50 basis points on Wednesday morning, dropping it to 1.25 per cent.

"This will help out purchasers whose rates are going down, therefore they can qualify for more as well," says owner of the Mortgage Centre Tristar Funding Corporation Richard Kitts.

Combined with changes to the mortgage stress test rate, realtors expect to continue seeing houses selling well above asking.

They suggest that buyers get in the market while they still can.

"Prices are continuing to remain high in this competitive market where there's not a lot of inventory," Rothwell says.

"But certainly the drop in interest rate will give consumers the confidence they need to move forward and jump on the band wagon."

Wednesday's rate cut marks the first time the Bank of Canada has cut the rate by a half point since the 2008 recession.