BANK OF CANADA HOLDS INTEREST RATE STEADY
Wednesday Jan 26th, 2022
BOC HOLDS INTEREST RATE STEADY, DESPITE SOARING INFLATION
January 26th, 2022
Canadian Real Estate Prices Expected To Continue Rising
Rumours of an imminent interest rate hike did not materialize, as the Bank of Canada opted to maintain its benchmark rate at a record-low 0.25% in its scheduled interest rate announcement today. The move (or lack thereof) comes despite soaring inflation and a stronger-than-expected economic recovery. The Bank noted that economic slack has been absorbed but said the Omicron variant of COVID-19 continues to weigh on growth.
Globally, good are in high demand, with supply-chain disruptions impeding production and transportation pushing inflation upward. The Bank projected global GDP growth to ease from 6¾% in last year, to 3½% in 2022 and 2023.
Meanwhile, Canada’s economy proved stronger than expected in the third and fourth quarters, rounding out 2021 at +4½%. Entering 2022, the Bank highlighted economic momentum, pointing to employment growth, a tighter labour market, job vacancies, strong hiring intentions and rising wages as positive factors. The Bank forecasts Canada’s economy to grow by four per cent this year and another 3½% in 2023.
On a final note, the Bank also expects elevated housing market activity to continue putting upward pressure on prices, which aligns with the 2022 Housing Market Outlook, where RE/MAX Canada anticipated average residential prices in the Canadian real estate market to increase 9.2% this year, amidst high demand and a severe housing supply shortage.
The next Bank of Canada interest rate announcement is scheduled for March 2, 2022.
Lydia McNutt, Public Relations & Content Manager, RE/MAX Canada
Lydia McNutt is an award-winning writer, editor, and public relations professional, with a focus on all thing’s real estate. At RE/MAX Canada, Lydia translates market data and trends into educational and entertaining content for homebuyers and sellers, while furthering the RE/MAX brand reach, nationally and globally.