Concerning a cooling housing market, an economist says the Bank of Canada may lower rates sooner.
Cooling Housing Market Could Spur Bank of Canada to Lower Rates Earlier
The Canadian housing market is experiencing a significant slowdown, with prices showing little movement over the past three months. This cooling trend is expected to continue as interest rates rise and higher borrowing costs make it harder for homeowners to sell their properties. Financial experts suggest that this may lead the Bank of Canada to consider cutting rates sooner than previously anticipated.
Rising Rental Prices
Rental prices across Canada are also on the rise, with September marking a 11% increase compared to last year. Rents jumped by 1.5% from August to September, reaching new highs in several major cities. Vancouver remains one of the most expensive cities for renters, with average rent prices rising notably.
Possible Rate Hikes
The Bank of Canada will soon release its business outlook survey and consumer expectations report. These reports will likely influence the central bank’s decision on whether to adjust interest rates ahead of its October 25 meeting to steer monetary policy. Experts predict that higher bond yields could impact this decision, but there is no clear indication yet whether such measures will lead to rate hikes or dovetail with efforts to control wage growth.
Other Economic Highlights
Meanwhile, Canada’s manufacturing sector and U.S. oil prices are among the key indicators to watch. The Canadian Real Estate Association (CREA) has forecasted a 10% drop in home price predictions for the year, reflecting ongoing cooling trends across the market.
