The real estate market in Canada depends on interest rates for loans and mortgages and in particular on the interest rate established by The Bank of Canada. Starting with COVID’s spread in the beginning of 2020 it was reduced and is planned to be increased to slow inflation and cool the market.
On OCT 27, 2021, the BoC announced its decision to stop QE (quantitative easing -a monetary policy of creating money to buy the Government of Canada’s debt as Canadas central banks holdings of federal debt climbed to about $425 billion during the crisis, from around $100 billion at the start of 2020) and a plan to raise the benchmark interest rate from its current setting of 0.25 per cent somewhere in 2022. Actually it was increased by 0.5 on April 13 2022, by 0.5 on June 01 2022 and 1.0 last time on July 13th bringing the central bank’s policy rate to 2.50%.
Based on central bank’s policy rate other important rate is established as the prime rate.
The prime rate, also known as the prime lending rate, is the annual interest rate Canada’s major banks and financial institutions use to set interest rates for variable loans and lines of credit, including variable-rate mortgages. The prime rate in Canada is currently 4.70% and is planned to be raised in 2022.
Below are important dates set in 2022 to make your decision informed when to invest or plan transaction in real estate:
- Wednesday, September 7
- Wednesday, October 26*
- Wednesday, December 7
If you have any questions regarding real estate properties or the real estate market please contact me directly. If you are looking for a real estate agent in Toronto area please consider my services: 1-416-723-5523.
Thanks, Sergey Bogdanets