All Eyes on the Bank of Canada, and Hopeful Homebuyers Intend to Hold Out Just a Little Longer

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Every Friday, Wahi brings you the most important real estate stories from the past week.

We Are So Back

After a rough couple of years that failed to launch, Canada’s housing market appears ready for blast off. CREA reports that home sales climbed nearly 2% last month, and nearly 7% over last September, reaching their highest level since July 2024. The gains were led by major increases in Toronto, Hamilton, Montreal, Quebec City, Vancouver and Victoria. Prices inched up just 0.1% month-over-month but remain 3.3% below since last year. With inflation and interest rates falling faster than originally anticipated, CREA now forecasts a 6.6% increase in home sales and a 4.4% increase in prices for 2025.

Inflation: Endgame  

The Bank of Canada’s multi-year fight against inflation appears over, and to the borrowers go the spoils. On Tuesday, Statistics Canada announced Canada had achieved its lowest price growth since February of 2021 — before inflation began its multi-year rise — with the Consumer Price Index slowing to 1.6% in September. The main contributor to the decline was a 10.7% drop in gas prices compared to September 2023, and a more than 5% drop since August. The agency also notes that rent increases have slowed, and air travel has gotten less expensive, though grocery bills remain elevated, rising 2.4% in September.

Your Move, BoC

With inflation down for the count, all eyes are on the Bank of Canada as it prepares its next rate announcement, dropping October 23. The big question is whether the Bank will opt for its fourth consecutive 0.25% cut or take a bigger bite out of borrowing costs with a 0.50% adjustment. On Monday, economists put the odds around 50-50, following last Friday’s jobs report, which showed a third consecutive drop in labour force participation and a slowdown in wage gains. By Tuesday morning, however, strong inflation data had economists pricing in a 70% chance of a 0.50% drop. 

Rent Un-Hikes  

Like inflation, rental rates are throwing it back to a simpler time, growing at their slowest pace since October of 2021. According to the latest Rentals.ca report, asking rents for all properties in Canada slowed to 2.1% from last year, averaging $2,193, but there were some notable drops. For example, while rental apartments saw significant price hikes, condo rents dropped 1.7% from last year, and studio rents dropped nearly 4%. Rents were also down 4.3% in Ontario and 3.2% in British Columbia, and rents dropped in all four of Canada’s largest cities, including Vancouver by 9.5% and Toronto by 8.1%.

Sideline Seating Remains Full  

Despite declining interest rates and a general sense of optimism in the housing market, most Canadians intend to hold out just a little longer. In a recent survey, 66% of those considering buying or refinancing say they’ll remain on the sidelines for at least 90 more days following next week’s expected rate cut in hopes of more cuts to follow. Nearly half of respondents said they were considering or very interested in buying or refinancing soon, but only 10% will do so immediately following the next rate announcement, and another 24% are considering a move within the 90 days after.

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