The Bank of Canada’s Interest Rate Announcement and its Impact on the Real Estate Market
The Bank of Canada’s recent announcement to hold the overnight interest rate has caused a stir in the real estate market, with many questioning the impact it will have on the industry. Despite previous beliefs that the market would settle down following two consecutive announcements with no rate increases, the single announcement last quarter has caused a premature bounce back in the market.
While some attribute the current push in the market to the low levels of inventory being experienced, others believe it could be due to the collapse of Read banks in March. When significant economic failures take place, consumers and investors tend to flock to hard assets, with real estate being the most preferred in Canada and worldwide.
The fears of rampant interest rate hikes have been eased, at least for now, as the rates are expected to hold steady for the foreseeable future. Tiff Macklem and the Bank of Canada are working to manage inflation and prevent a hard landing recession, balancing on a razor-thin tightrope.
It remains to be seen what impact the interest rate announcement will have on the real estate market in the long term. However, for now, it seems that the market is on an upward trajectory fuelled by consumer and investor confidence in hard assets like real estate.