Bank of Canada predicts further dip in home prices after delivering quarter-point rate hike
The Bank of Canada is predicting home prices will decline further after it raised interest rates Wednesday for the eighth consecutive time, but it expects sales activity to pick up later in the year.
The typical home price across the country is already down 13 per cent from its peak last February amid the bank’s attempts to rein in runaway inflation by reducing access to cheap loans.
Now, with mortgage rates at their highest levels in years, many would-be buyers have been shut out of the real estate market. Those areas include the Toronto suburbs, smaller Ontario cities and the Chilliwack region of B.C., where home prices jumped more than 50 per cent over the first two years of the pandemic, when the central bank’s overnight rate was near zero. Home prices in some of those markets have fallen more than 20 per cent over the past 10 months.
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