I believe the Bank of Canada made a big mistake by cutting its benchmark rate by 50 basis points, which is half a percentage point for the following two reasons.

Number one, I don't believe it's going to make a difference for home buyers. If you look at it last week versus this week, I don't believe home buyers would feel any better by rates coming down by half a percentage point or 50 basis points for the simple fact is you still have to qualify based on the mortgage qualification rates. So there's no change really there from a qualification perspective for home buyers. It's really more psychological as opposed to direct impact on the qualification of home buyers.

The second reason is it degrades the Bank of Canada's ability to cut rates in the future. Over the last year and a half, two years, rates have gone up, which have built a buffer for the Bank of Canada should we get into a recession. I believe that Bank of Canada cut the benchmark rate by 50 basis points to match the US federal reserve, which did the same this past week as well, to keep the Canadian dollar low and for the simple reason, Canada is an export economy and we have to keep that dollar competitive or low enough for the exports to continue to flow out of Canada into the US.

If you have any questions about the impact of the Coronavirus or Bank of Canada's benchmark rate moves and how that impacts your real estate portfolio or your next move as a home buyer, please feel free to reach out. I'd be more than happy to help.

Until next time, happy investing.