Interest Rate Relief: What the September 2025 Drop Means for Buyers, Sellers, and the Real Estate Market in Airdrie & Calgary

by Rob Campbell

On September 17, 2025, the Bank of Canada announced a 25-basis-point reduction to its key interest rate, bringing the policy rate down to 2.5%. This is the first cut since March and comes after months of elevated borrowing costs and growing unease about the health of the Canadian—particularly Albertan—economy. For homebuyers, investors, and real estate professionals, the decision was welcome news. But what does it mean for buyers, sellers, and the housing market in Airdrie and Calgary? Here’s a breakdown of who stands to benefit, who should tread carefully, and what the months ahead could hold for our region’s real estate.

What Triggered the Interest Rate Cut?

The Bank of Canada pointed to a combination of factors behind its decision:

Rising unemployment: Joblessness increased to 7.1% in August, with layoffs concentrated in trade-sensitive industries.
Weakening economic activity: The Canadian economy contracted in Q2 2025 as exports and corporate investments slowed.
Slowing inflation: Consumer prices cooled to 1.9% in August, falling comfortably within the Bank’s target range and easing concerns about runaway inflation.

In response, policymakers opted to ease borrowing costs to support households and businesses. While another cut isn’t guaranteed, analysts suggest a further reduction could come as soon as October, depending on how the economy performs.

The Immediate Impact: Mortgage & Lending Dynamics

The first to feel relief will be homeowners and buyers:

Variable-rate mortgages: Payments will drop almost immediately as banks adjust prime lending rates.
Fixed-rate mortgages: Lenders may keep rates steady or lower them further as competition increases amid uncertainty.
Mortgage renewals: Those facing renewal are in a stronger position than they were earlier this year.

Currently, average 5-year fixed rates in Alberta range between 4.1% and 6.5%. With the Bank’s new stance, rates could ease further through the fall.

For Buyers: Opportunity Knocks

Greater Affordability: Lower borrowing costs make monthly payments more manageable, allowing buyers to stretch budgets or qualify for more home.
Increased Inventory:
- Calgary’s inventory surged 48% year-over-year in August, its highest level since 2019.
- Sales fell 9%, while median prices declined modestly.
  This combination—lower rates, more supply, and softer prices—gives buyers powerful leverage, particularly first-timers and move-up buyers.
Flexibility in Negotiations: With less competition, buyers can shop carefully and include conditions like inspections and financing that were often skipped in the frenzied 2021–2023 market.

For Sellers: New Strategies Required

The balance is shifting, and sellers must adapt:

Price Moderation & Longer Timelines: Calgary benchmark prices dropped 4% year-over-year in August, with homes taking an average of 38 days to sell (up from 23). Overpricing is leading to unsold listings or necessary reductions.
Marketing & Presentation Matter More: Professional staging, standout photography, and strategic pricing are essential as buyers gain negotiating power.
A Balanced Market: Months of supply in Calgary reached 3.35 in August—squarely balanced, no longer a seller’s market.
Local Outlook: Airdrie tends to follow Calgary’s market trends with a slight lag, so expect more inventory, longer selling times, and the need for stronger marketing.

For Investors & Upgraders: Timing the Market

Renewed Investor Interest: Lower borrowing costs could reignite demand for multi-family and rental properties. Investors sidelined during high-rate periods may re-enter the market, aiming to capitalize on stable prices and strong rental yields.
Conditional Optimism: Uncertainty remains around trade disruptions and the possibility of further rate adjustments, so some investors may hold back. Sellers of investment properties should stay realistic about pricing and demand.

What About the Broader Market?

Airdrie’s Unique Position: Affordability and family appeal remain strong drivers. Lower rates and more supply could encourage steady activity, but sharp price jumps aren’t expected. Stability is the likely theme for the rest of 2025.
Calgary’s Outlook: Unlike Toronto or Vancouver, Calgary benefits from economic diversity in sectors like tech, healthcare, and renewables. Forecasts call for:
- A further 2–3% dip in prices over the next quarter.
- Slow but steady sales as pent-up demand meets higher inventory.
Consumer Caution: Unemployment, trade uncertainty, and cost-of-living pressures remain risks. Both buyers and sellers should temper expectations and avoid overly aggressive strategies.

Actionable Advice for Buyers and Sellers

For Buyers:

Get pre-approved now to lock in lower rates.
Explore both new and resale inventory—choice is greater than in years.
Don’t waive conditions; take advantage of the chance for full due diligence.

For Sellers:

Price competitively from the start—testing the market often backfires.
Invest in presentation: staging, repairs, and professional marketing.
Be flexible and open to negotiation.

For Both:

Work with local experts who understand neighbourhood-level dynamics.
Watch the Bank of Canada’s October 29 meeting for the next rate decision.
Stay realistic—focus on long-term goals and lifestyle, not just short-term gains.

Conclusion

The September 2025 rate cut provides meaningful relief for Albertans and is likely to set a new tone for real estate in Airdrie and Calgary. Buyers gain affordability and options, while sellers must pivot with smarter pricing and marketing. Overall, the market is moving toward balance and stability for the remainder of the year.

Success in this environment depends on staying informed and making strategic choices. Whether buying, selling, or investing, guidance from a knowledgeable local professional can help you navigate the shifting landscape with confidence.