PILLAR 02 · MARKET PULSE Market Commentary EP 052

Buy Now or Wait? The Real Cost of Waiting for Rate Cuts in 2024

A solo episode with Dalia Barsoum, Principal Broker, Streetwise Mortgages

LISTEN ON ▶ YouTube

6 min · March 3, 2024 · 277 views

WHAT YOU'LL LEARN

Why the Bank of Canada's stance on shelter costs signals a shift toward rate cuts in 2024.
The exact cost comparison between buying now versus waiting for a 1% rate drop on a $600,000 property.
How a potential 5% price appreciation could erase any interest savings and cost you an extra $30,000.
Why mortgage interest is tax-deductible for investors, reducing the benefit of waiting for lower rates.
Where to find cash-flowing rent-to-own opportunities that generate $800 to $1,000 per month today.
How using short-term or adjustable rate mortgages can let you lock in properties now and refinance later.
Why periods of fear and high interest rates historically create the best wealth-building opportunities for real estate investors.

Show Notes

Timestamps 8

Questions Answered 5

Mentioned In This Episode 1

Dalia Barsoum, founder of Streetwise Wealth, addresses the question every Canadian real estate investor has been asking: should you buy now or wait for interest rates to drop? Recorded on March 1, 2024, she reveals why the economic landscape has shifted—inflation is cooling toward the Bank of Canada's 2% target, and policymakers have explicitly signaled that rising shelter costs will no longer stand in the way of rate cuts.

Using a $600,000 rental property example, Dalia breaks down the true cost of waiting. While holding off for a 1% rate drop might save roughly $5,000 in interest, a 5% price appreciation would cost you an extra $30,000—plus investors can write off interest expenses anyway. She highlights current cash-flowing and rent-to-own opportunities generating $800 to $1,000 per month, urging savvy investors to lock in properties with short-term mortgages now and refinance when rates fall.

00:00:01 Introduction: Should You Wait for Rate Cuts? → 00:00:36 The 2024 Economic Shift: Inflation and Bank of Canada Signals → 00:01:25 Bank of Canada Quote: Shelter Costs Won't Derail Rate Cuts → 00:02:17 Market Reality: Why the Cooldown Was Artificial → 00:03:06 Real Numbers: The Cost of Waiting on a $600K Property → 00:04:14 Current Deals: Cash-Flowing Rent-to-Own Opportunities → 00:04:58 Strategy: Lock In Now with Short-Term Mortgages → 00:06:12 Call to Action: How to Find Opportunities Today →

Should I wait for interest rates to drop before investing in real estate?

According to Dalia Barsoum, waiting could cost you more than you save. On a $600,000 property, waiting a year for a 1% rate drop saves approximately $5,000 in interest, but if prices rise 5%, you pay an extra $30,000.

What has changed with the Bank of Canada's outlook in March 2024?

The Bank of Canada has acknowledged that shelter costs are unlikely to decrease due to high demand and chronic undersupply, and has signaled that rising shelter costs should not derail rate cuts if core inflation dips into the 2% range.

Are there cash-flowing investment opportunities at current interest rates?

Yes. Barsoum notes that investors are currently passing on rent-to-own opportunities that generate $800 to $1,000 per month in positive cash flow even at today's higher rates.

What financing strategy should I use if I buy before rates drop?

She recommends taking advantage of short-term or adjustable rate mortgages to lock in properties now, then refinancing at better rates when economic conditions improve.

Why is mortgage interest less of a concern for investors than homeowners?

Real estate investors can write off mortgage interest as an expense, which reduces the net cost of higher rates compared to the potential loss from rising property prices.

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