Mortgage broker Ron Butler says anticipation for potential rate cuts is already causing home sales to “march higher.”

“The thought process is that if rates are in fact going to come down in the summer and in the fall, then there’s a great possibility that prices might start to come up again,” he said in a Tuesday interview with BNN Bloomberg.

Prices, Butler said, “look like they want to front run the market.” 

He made the comments after the Toronto Regional Real Estate Board reported that home sales surged in January from the previous month, and from a year earlier. Home prices, meanwhile, declined slightly, the board reported.

Those home sales figures have come as economists and market watchers predict the Bank of Canada will cut interest rates sometime this year as it notches progress in its battle with inflation.

Butler, broker at Butler Mortgage, said home prices are being pushed back by the mortgage math, “even the math of mortgages in the five per cent range,” he said

“You could pretty much bet that as soon as rates start to drift into the fours you’ll see some continued pick up in sales,” he said. 

Butler said he does not expect interest rates will go back to two and a half per cent.

“We will not see a repeat of 2021, or the early stages of 2022 again. We’re just not going to see 23-year lows,” he said.

Butler spoke to BNN Bloomberg shortly after Bank of Canada Governor Tiff Macklem gave remarks in Montreal about the central bank’s work and housing in Canada.

Macklem said monetary policy has limits when it comes to addressing Canada’s housing crisis, and he made the case that the Bank of Canada cannot fix the country’s housing supply shortage.

According to Butler, demand also needs to be considered when discussing Canada’s housing crisis.

“There’s also the issue of pent up demand,” Butler said.

“We had the lowest sales year in 23 years last year. We also added about a million new people in Ontario in the last two years.”

Butler said this demand will be there “no matter what the federal government does.” 

For the rest of Butler’s interview with BNN Bloomberg, watch the video above.