BOC RAISES POLICY RATE TO 4.50%

On January 25th, 2023 the Bank of Canada raised its policy rate 0.25% to 4.5%. This increase marks the 8th interest rate hike in the past 12 months. An increase in the policy rate typically leads to higher borrowing costs for consumers, making it more expensive to take out a mortgage or line of credit. This can slow down the demand for homes, as potential buyers may need to reduce their spending or delay their purchase plans until they can secure financing at more affordable terms.

However, it's important to note that the impact of the policy rate increase on the real estate market will vary depending on regional and local market conditions. For example, in areas with strong economic growth and a robust job market, the demand for housing may remain relatively resilient, despite the higher borrowing costs. On the other hand, in areas with weaker economic conditions, the impact of the policy rate increase may be more pronounced. Additionally, the timing and pace of future policy rate increases will also play a role in determining the overall impact on the real estate market.

The next interest rate announcement from the Bank of Canada will be on March 8th, 2023.