There’s a common belief that lower interest rates will automatically make homes more affordable, but recent research from the central bank tells a different story. What actually happens in Canada is that when rates drop, more buyers jump into the market almost immediately—resales start to climb, and the full impact shows up within 18 to 24 months. But new housing supply? That’s much slower to react, often taking around two years before we see a meaningful increase in housing starts.

This timing gap is important for buyers and sellers here in Greater Vancouver and the Fraser Valley. Strong job markets can make buyers feel more confident and ready to act, especially when lending conditions are easier. Builders, on the other hand, only start ramping up once prices and financing conditions improve—and with all the planning and permits required, especially for larger projects, that process isn’t quick.

After three decades of helping clients navigate this market, I’ve seen firsthand how these cycles play out. Rate cuts may eventually help bring more homes to the market, but because supply always lags behind demand, monetary policy alone isn’t the answer to affordability. Understanding these dynamics can help you make smarter decisions, whether you’re buying your first home or selling in a changing market.