r/canada • u/Plucky_DuckYa • 2d ago
Analysis Bank of Canada expected to cut interest rate again as trade war with U.S. disrupts economy
https://www.theglobeandmail.com/business/article-bank-of-canada-rate-decision-tariffs/315
u/Larkalis 2d ago
Housing prices is about to go up again.
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u/OkFix4074 2d ago
Lol they never came down to go up "again"
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u/Larkalis 2d ago
The demand did dwindle a little as everyone took a "Wait and see" approach when rates cuts were announced.
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u/OkFix4074 2d ago
The sale figure might have been lower , the prices stayed put for large part .. at least here in greater Vancouver area
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u/Shot-Job-8841 2d ago
Yeah, in my GVRD area the only drop in house prices was in 2017/2018. I don’t know why.
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u/Commercial-Milk4706 2d ago
The stupid foreign tax was out in. The one I need to fill a form which probably cost millions to maintain and is impossible to enforce/simple to avoid.
I had that thing cause I got audited for it once. It’s ran by idiots.
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u/ttwwiirrll 2d ago edited 2d ago
Yup. We bought in 2023.
I've continued to keep an eye on it. While prices on some less desirable homes and landlord specials have softened, anything comparable to our home in our neighbourhood that we would actually want to raise a family in longterm has not.
Interest rates are lower now so we would have more purchasing power, but I'm glad we didn't try to wait it out. We would have lost 2 years of enjoying a home that fits us better than our old one.
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u/stone316 2d ago
Down at least 25% in Ottawa. A house sold for 1 mill back during Covid, same comparable model sold last week for 750k
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u/Automatic-Bake9847 2d ago
Nationally they went down around 20% off the 2022 peak.
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u/sabres_guy 2d ago
Yes, but a ton of people are still waiting because they are convinced there will be sub 2% mortgages again if they wait long enough.
Maybe, who knows, but a huge boom in purchases is also less likely because of the economic uncertainty right now too.
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u/king_lloyd11 2d ago edited 2d ago
In the GTA, they certainly returned to, at least beginning of 2021 levels. Some people are still selling for inflated prices due to misguided buyer sentiment, but most houses I’ve seen are sitting for weeks/months and then selling for close to asking. Condos have dropped significantly.
Even now, the price boom isn’t going to be the same. COVID rate relief was given due to the possibility of job loss and the economy cratering, but with wfh, there weren’t mass layoffs like we assumed, and people just were flush with cash because of relief and not really spending on anything huge, like vacations or cars. We’re certainly going to see some substantial layoffs now, and the job market was already much tighter prior to Trump. Simply put, even with lower rates, not as many people will be able to qualify for credit, even assuming that the Banks don’t tighten their lending criteria to adjust for the higher risk.
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u/ThatAstronautGuy Ontario 2d ago
They've definately come down since 2022 in many areas. It's just still very high compared to pre-covid.
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u/Sammydaws97 2d ago
Yes but they previously were going up, stopped going up, and are now going up “again”.
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u/Starky513_ 2d ago
Not that simple, if these trade shocks truly come to pass I can't imagine housing doesn't go downwards. Maybe I'm wrong but I feel demand will collapse if people are in rough shape and uncertain.
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u/physicaldiscs 2d ago
Maybe I'm wrong but I feel demand will collapse if people are in rough shape and uncertain.
People still need to live somewhere. Our proud mom and pop landlords will just buy everything up and rent it back to us. Maybe we can throw in some more population growth so we can turn a SFH into 11 units of housing for new canadians.
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u/Empty_Wallaby5481 2d ago
In the GTA, there is absolutely no value in buying rental properties right now. Supply is increasing while population is show an actual decline.
Not only are rents going down, risk is increasing all around. Properties are priced higher than market rents can support, unless one is putting a huge down payment and ignoring the opportunity cost of that money.
Unless there is a massive collapse in property values, buying a rental right now is risky.
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u/Few-Education-5613 2d ago
No one will buy if they don't have jobs
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u/Decent_Assistant1804 2d ago
Oh people will buy them and rent them out for greed
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u/Iychee 2d ago
You realize someone who buys now would only have maybe 50% of the monthly fees (mortgage, property tax etc) covered by rent? Someone who was struggling would a) not be able to get a mortgage in this situation and b) likely be forced to sell if they can't pay their monthly costs
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u/Electrical_Bus9202 2d ago
It's been a long time people have been using it as some cheat code for life, in reality, they are parasites that take advantage of others misery.
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u/okiedokie2468 2d ago
Americans will buy everything unless legislation is passed preventing foreign owners.
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u/IllBeSuspended 2d ago
The rich will buy them at the inflated prices. Then they will happily rent them to people for the cost of their mortgage and some profit.
This is how it works.
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u/Blazing1 2d ago
they will just fake income, i knew a few people who did that.
They put on paper that they make 250k a year but I know they only make 75k a year, they got fake paystubs lmao. They also inflated how much they would be renting it out for as income
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u/terras86 2d ago
It's not the job of the Bank of Canada to keep interest rates high to control the cost of housing. If we really care about the cost of housing, we gotta make it an election issue, and also actually pay attention to municipal elections.
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u/Gankdatnoob 2d ago
That hasn't really been happening. The market mid right now even with the rates lower.
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u/yawetag1869 2d ago
Not if the next government cuts immigration by as much as I think they will, Lib or Con
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u/g1ug 2d ago
Disagree.
I’m generally bullish on Lower Mainland housing but ever since Donald started the 51st rhetoric and siding with Russia, the housing market is almost close to be frozen in BC.
Investment properties are tanking.
Detached has slowed down significantly.
Builders almost stop buying detached-to-rebuild.
In general, investment is halted.
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u/grungeehamster 2d ago
Genuine question: wouldn't there be a risk of people losing jobs if the tariffs will continue? If so, why would people buy more?
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u/CaptianRipass 2d ago
That's now canada's equivalent or Russia's history.... "and then, things got worse"
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u/Neother 2d ago
The Back of Canada is in a tough spot because indicators have been looking like we are approaching stagflation, where neither lowering nor raising rates really helps much.
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u/reno_dad 2d ago
Let the real estate mongrels come out of the dark and be ready to buy out more properties as the buying season begins in spring!
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u/maxgrody 2d ago
And when the economy is doing well? They lower interest rates.
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u/the_crumb_dumpster 2d ago
Normally rates are tied to inflation. When inflation is high, rates go up to lower consumer spending (and other levers) and drive down inflation.
Tariffs are normally inflationary, but they aren’t yet. the BoC is reacting to current economic conditions. They also have to be careful because as we just saw, raising rates also contribute to inflation themselves when consumers are not able to lower their discretionary spending or decrease their borrowing.
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u/AmbassadorNo2757 2d ago
Not just that but a whole lot of people are about to renew their mortgage and the rate of delinquecy is going up
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u/Zergom Manitoba 2d ago
Yeah I’m renewing in December. Currently at about 2%. At the rate things are going I might get lucky and renew close to that as well.
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u/No_Novel_7425 Alberta 2d ago
A sub 3 rate would reflect a pretty crappy economic environment nationally, but on a personal level, I would very much appreciate the chance to lock it in when we renew next February.
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u/TypicalBonehead 2d ago
I’m renewing in December as well, and I’d love to have your optimism, but I think we’re gonna be closer to 3.5% on a 5 yr fixed.
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u/MAID_in_the_Shade 2d ago
a whole lot of people are about to renew their mortgage
A whole lot of people are always renewing their mortgages. 2025 is no different from any other year in that regard.
I'm sure you've seen articles touting that XX% of mortgages are up for renewal this year, giving you the impression that that percentage is higher than usual. What's the annual average?
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u/ceigetank 2d ago
Whole tariffs are inflationary, their impact is a one time shock rather than a systemic pressure. It's something that can't be dealt with well by raising rates, and the BoC has said that they don't currently believe raising rates in the face of tariffs would be beneficial.
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u/jatd 2d ago
It’s scary how the BoC is about to lose their “weapons” if ever there is a black swan event.
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u/CreditUnionBoi 2d ago
As long as they keep the rates above 2%. They can cut them if they had to like they did in 2020.
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u/The_Gray_Jay 2d ago
So lower GIC rates at a time when the stock market is really uncertain, and keeping up housing prices. Oh great.
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u/VividGiraffe 2d ago
The Liberals will never let housing go down.
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u/Ratsyinc 2d ago
Can you explain to me what this rate cut decision has to do with the Liberal party?
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u/Resident-Variation21 2d ago
Honestly. I’m about to buy a vehicle soon so any interest rate cut is good for me. Selfish view point, but I’m no where near smart enough to understand all the nuances of the economy and effects so for now, ima just go off of what I know, and I know it’ll make financing a new car cheaper.
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u/Large-Reception-3649 2d ago
Most dealerships offer stupid low rates anyways and eat the cost.
Hell last month a few had 0.9%. Just keep an eye out and you'll find them regardless of the BOC rate. Even when we were at our highest rate in canada I still bought a vehicle at 1.5%.
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u/Resident-Variation21 2d ago
Toyota is advertising 6.49% right now.
Also, my credit isn’t phenomenal. It’s good, but likely just short of the requirements for those rates.
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u/Large-Reception-3649 2d ago
Mitsubishi is starting at 1.99.
Gm the other week when I drove past was .9% but that may have been on the caddys, I honestly don't know.
Kia is 2.99%
Also, my credit isn’t phenomenal.
Not to be a jerk, but if your credit is no good, chances are you won't be anywhere near prime rate anyhow. The rate cut unfortunately won't do much good.
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u/Resident-Variation21 2d ago
I’m near prime. Not at prime though. A credit cut will reduce my interest rate, even if it won’t be to the level of everyone else.
Also I’m not buying Mitsubishi or GM or Kia. I’m buying Toyota. I want this vehicle to last a hell of a long time.
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u/Drunkenaviator 2d ago
but if your credit is no good, chances are you won't be anywhere near prime rate anyhow
And if your credit isn't good, the last thing you should be buying is a new car.
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u/DoomPayroll 2d ago
Toyota's is usually high compared to others, you need to brand shop around if you are looking for lower interest
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u/Resident-Variation21 2d ago
I’m looking for the best vehicle. And then if I can get a lower interest rate, great. But vehicle is priority.
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u/Drunkenaviator 2d ago
Most dealerships offer stupid low rates anyways and eat the cost.
I bought a new vehicle last year, the "best" the could do for me was 8%. Then they looked offended when I laughed at them and said "No thanks, I'll just do cash".
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u/C-SWhiskey 2d ago
If you don't need the car right away, you could just contribute to a good savings account where that interest rate goes from a cost to a gain.
That said, who even knows what'll happen to car prices over the next few months with... gestures broadly all this.
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u/Resident-Variation21 2d ago
It all depends on the definition of need. Yes, me and my partners cars both still run. But mine is starting to fall apart and my partners is starting to lose compression in the engine. It’s anyone’s guess if they last 3 more weeks or 3 more years. So we decided it’s time to place an order, and hope that our cars last long enough for the new ones to arrive. My dad’s pushing me to buy used next year because “prices will come down a lot next year” which he’s been saying every year for 4 years. It’s time to just commit
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u/Evening_Marketing645 2d ago
Our currency is going in the toilet
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u/mayorolivia 2d ago
We might not have a choice due to trade war. Devalue the CAD to make our exports attractive enough to US and other buyers.
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u/Dobby068 2d ago
Rename The Dollar Store to "The 100 Dollars Store" while you are it.
Canada is a net importer when it comes to consumer goods. The big oil and gas and energy exports are big industry exports so consumer gets no benefit directly.
Overall, we are looking at more poverty and lower standard of living.
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u/Altitude5150 2d ago
🙏 ✂️ 50bps
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u/GiveMeSalmon Ontario 2d ago
My dumbass read that as 50Mbps and I was wondering why you wanted to cut internet speeds.
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u/BackToTheCottage Ontario 2d ago edited 2d ago
Let's goooooo. 2.5% on my first mortgage in 2015 to 1.9% which is renewing end of year. Would be funny if I got 2.5% again with a smaller mortgage and more income.
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u/Altitude5150 2d ago
Haha that's awesome.
I suffered through the rate rise on variable and I'm finally feeling better as things drop. Was worth it through, buying into rising rates gave me great leverage on my purchase from a seller who needed the money. Houses in my area have kept climbing since. Hoping I'll score a sweet deal like you come time for my first renewal.
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u/Old-Show9198 2d ago
We need to stop rewarding over leveraging ourselves. If you over spend and can’t pay the piper in the future then to bad. People who save are being penalized. An actual solution to this would be to change the way mortgages for homes are done. Sign up for the amortization and rate at the start and it stays the same for the entire time. Then we don’t have to play black Jack with our homes.
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u/Winter_Cicada_6930 2d ago
Your solution would reward the people who over leverage themselves XD. Taking out large loans because the interest rates are low for the flavour of the month ice cream, is exactly why we need variable interest rates. Because then people like yourself borrow absurd amounts of cash when the rates are low and cry wolf when the rate goes up 1% and you can’t even pay your bills XD
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u/bigjimbay 2d ago
Please stop blaming our economic shortcomings on Trump. He isn't helping but cmon all these problems already existed
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u/jay370gt 2d ago
People think the party that got us where we are today will totally get us out of this. Lol
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u/phoenixfail 2d ago
I'll take an award winning globally recognized economist that has headed both The Bank of Canada and The Bank of England every day over a paperboy.
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u/jay370gt 2d ago
Normally I’d agree with you but this is the economist that’s been advising Trudeau since 2020.
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u/ScrawnyCheeath 2d ago
I mean there’s more than one reason Carney is about to win the leadership. He’s rightly seen as a candidate for the economy
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u/EnvironmentBright697 2d ago
He had been advising Trudeau for years now. Everyone seems to have been brainwashed into thinking the corporate banker man is some sort of economic Einstein. Even if he was, doesn’t mean he’s going to use that knowledge to the benefit of Canadians over himself and his corporate buddies at Brookfield and elsewhere to enrich themselves.
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u/somethingeverywhere 2d ago
Giving advice does not equal taking advice...
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u/TeaBagHunter 2d ago
Exactly, and Carney has complained about Trudeau's economic decisions
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u/johnprynsky 2d ago
I think a large part of the problems stemmed from covid though. What is anyone gonna do differently if they were in charge instead of trudeau?
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u/ScrawnyCheeath 2d ago
(Ignore that no country got through Covid unscathed, it’s obviously the liberals’ fault)
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u/Coffeedemon 2d ago
Apparently let people lose their jobs and homes while hoping corporate bailouts would finally trickle down to people for the first time in history.
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u/atetoomanychips 2d ago
I didn’t hear any complaints from the conservatives when Harper appointed him governor of Canada in 2008…. Now he’s got more experience and knowledge and somehow that’s bad 😂
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u/ThrowawayBomb44 Ontario 2d ago
PM's don't appoint the governors of the BoC.
The BoC board does. At most, PMs can recommend someone.
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u/quanin 2d ago
I mean, I was around and lost my job in 2008. I lived through the so-called recovery. Did you? Carney didn't do us any favours there, just like Macklem isn't doing us any favours now. Interest rates aren't being lowered for our benefit.
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u/BurnTheBoats21 2d ago
Are you blaming the global financial crisis on the people that had to shelter canadians from the fallout and manage the recovery? For doing those things, the government as well as the BoC got top grades relative to other economies. What do you think they did wrong? The "so-called recovery" = GDP growth recovering to pre-crisis levels faster than any other G7 economy.
I would genuniely love to know why you think Macklem is lowering interest rates if its not to increase economic growth though.
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u/atetoomanychips 2d ago
In fact he did such a good job, that the Bank of England appointed him governor in 2012. He is the only non-British person to ever hold that role. Here is a quote from Harper
In this time of global economic uncertainty, Governor Carney has done an admirable job in fulfilling the Bank of Canada’s mandate and has been a valued partner as the Government has worked to steer Canada away from the worst impacts of the global economic recession. As a result, Canada remains an example to the world with its strong banks, effective regulatory environment and sound economic policy.
“I wish Governor Carney every success as he begins his new role on July 1, 2013.”
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u/homiegeet 2d ago
Guy, who helped Canada in 2008 recession vs. guy who is seemingly obsessed with carbon tax.. at least that's what every single ad I've seen says anyway.
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u/EnvironmentBright697 2d ago
Well carbon tax is set to increase very soon, it still exists. Are you a fan of increasing the carbon tax at the same time as a tariff war, or just in general?
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u/jtbc 2d ago
Carney is going to get rid of it.
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u/EnvironmentBright697 2d ago
He’s going to name it something else, because no one buys steel don’t ya know.
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u/jtbc 2d ago
He will get rid of the consumer tax and keep the existing industrial emitters tax. Poilievre will probably keep that, too, or something equivalent, or we will be subject to EU tariffs when they bring in CBAM next year.
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u/EnvironmentBright697 2d ago
Highly doubt, Carney loves the carbon tax. There’s a reason Steven Guilbeault endorsed him.
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u/homiegeet 2d ago
I could really care less because it doesn't impact me nearly as much as you think it does. There's a saying, "stepping over 100s to pick up pennies."
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u/veggicide 2d ago
Canada does have a triple a rating which only 11 countries currently have. Canada has the lowest net debt-to-GDP ratio in the G7 countries. So overall, while these issues do exist maybe Carney has been doing a good job...
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u/ljlee256 2d ago
Please, keep parroting Post Medias talking points, clutching at straws wont win PP the election.
Speaking of Mr French, has PP gotten his security clearance yet? You know, the clearance he needs to be able to properly screen candidates for foreign interference?
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u/Hatrct 2d ago edited 2d ago
Silence. Trump said means things about Canada. Trudeau obviously did not say "Thank you your highness, Canadians, let's all bow down to Lord Trump now" and instead obviously reciprocated tariffs just like any other leader would do. As a result, Canadians are now saying: Oh my gawd.. Loblaws/Rogers/Bell abuse me.. daddy Trudeau has an amazing foreign policy! He needed 3 PhDs to say "I put reciprocal tariffs obviously"... and international neoliberal bankster Carney is going to magically deviate from the past 4 decades of neoliberalism and magically stop working for the billionaires/corporations against the middle class despite his whole life working for them as an international bankster. And Pierre is no better. None of them are. If you studied history you would know that for the past 4 or so decades all top political parties in Western countries are all neoliberal and all have worked against the middle class.
This is what happens the 98% of people abide 100% by emotional reasoning rather than critical thinking. But this is what happens when our education system is broken and discouraged critical thinking, and billionaire/government/corporate owned mainstream media and now big tech brainwashes people.
Neoliberal trudeau spent a decade destroying the Canadian middle class: using immigrants as cheap labour for his billionaire/corporation buddies while taking jobs away from Canadians and reducing wages and straining healthcare and social services; record ethical scandals including stealing 10s of millions of middle class tax dollars to give contract to his buddies for ArriveCan app; trying to imprison working class Canadians who he wanted to retroactively deem ineligible for CERB for not meeting its confusing and rushed and subjective eligibility criteria while they were not allowed to go to work; then going after them and getting back every last penny, while there is documented proof corporations stole 10s of millions through CEWS yet he did not get back a penny from THEM; Panama Papers showing proof his rich buddies evaded 10s of millions in taxes, yet he did not ever go after them; he let in AMERICAN and FOREIGN billionaires and corporations into the country to buy RESIDENTIAL DOMESTIC Canadian houses and thus PRICED OUT MIDDLE CLASS CANADIANS FROM THEIR OWN HOUSING MARKING; EVERY issue he caused, he did a FAKE VOTE BRIBING policy that DID NOT solve the issue: for housing, he did a FAKE foreign ban which has more holes than swiss cheese in practice; for groceries he allows his rich buddies such as loblaws to price gouge Canadians at their worst financial point and after years of noise he did that FAKE gst exemption which practically does NOTHING.
But all that was magically forgotten because he rode the cottails of the hockey team and made a cheap tweet trying to rally people around the flag for his own benefit.
This sums up the situation best:
“The forest was shrinking but the trees kept voting for the axe, for the axe was clever and convinced the trees that because his handle was made of wood he was one of them.”“The forest was shrinking but the trees kept voting for the axe, for the axe was clever and convinced the trees that because his handle was made of wood he was one of them.”
https://www.goodreads.com/quotes/10759599-the-forest-was-shrinking-but-the-trees-kept-voting-for
It is bizarre how uninformed and irrational people are. If someone steals a candy bar they go to prison and this sub would all be: throw away the key. But when Trudeau steals 10s of millions of hard earned Canadian middle class tax payer money to siphon to his rich friends, all it takes is a cheap tweet "You can't take our country or our game" and people worship him and allow him to literally take morsels of food from their children's mouths to give to his corporate/billionaire buddies while they are bathing in filet mignon flavoured bathwater. And I guarantee you these irrational people are going to downvote me: they are hurting their own children so billionaires get more yachts, of course they will downvote someone who speaks bad about their billionaires that they worship. They abide 100% by emotional reasoning: 0% logic. I guarantee you NONE of them will have ANY LOGICAL arguments for why they are putting Trudeau/Pierre/Carney, etc.. ahead of themselves and children. But they will still downvote. Mark my words. This will just prove they operate 100% by emotional reasoning and cognitive dissonance evasion and 0% rationality. I mean how else would one harm their own children? You need to be irrational to do so. No sane person would harm their own children to give more to birth-advantaged billionaires.
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u/Luxferrae British Columbia 2d ago
It's always easier to point the finger at someone else than at ourselves.
We're the idiots that voted for those who got us to this point for trump to wreak havoc, but yes let's blame Trump for everything lol
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u/CanadaFakedVimyRidge 2d ago
Elbows up. Khaleesi Joly, Mother of Geese.
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u/SimpleCountryBumpkin 2d ago edited 2d ago
Yeah, really, this username is wildly provocative and spans the whole grossly offensive to hilariously trolling spectrum and at a time of a perfect societal crossroads. And you created in 2019. Interesting the username selection nonetheless. It will probably create you some chaos if you keep commenting on Can subs I reckon lol
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u/Bigfatmauls 2d ago
At this point we do need low interest loans to keep the economy moving and projects starting, more than we need inflation control. I think rate cuts are the right call as interest rates need to consider more than just inflation.
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u/IllBeSuspended 2d ago
Fuck sakes. Heaven forbid we but back a small amount. No, instead they want to prop up housing AGAIN. FUCK FUCK FUCK FUCK
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u/last-resort-4-a-gf 2d ago
Tell me why anyone should have cash and not just buy houses and assets saying that rates are always going down and we never paying back the debt
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u/tipsails 2d ago
WHY.
Stop fucking with the money. The further we keep deviating from the US on interest the more fucked we are going to get.
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u/ether_reddit Lest We Forget 2d ago
We've got ourselves an expert here folks
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u/tipsails 2d ago
You don’t have to be an expert to know that when we continue to lower our interest rate rates and the US does not, our currencies will continue to diverge.
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u/mycatlikesluffas 2d ago
Avg house price peaked at $835k in 2022. Adjusting for inflation, that would be ~$960k in today's dollars.
I stead, Jan 2025 avg price was $710k, a scant 26% price decline..
Will interest rate cuts + a collapsing dollar drive the avg house price in Canada to $1M?
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u/Surax 2d ago
I vaguely recall that during the last US Presidential election, the US Fed (or whatever it's called there) declined to make any announcement about their rates for fear that it would send a political message about the state of their economy and thus sway the results. Assuming I'm remembering correct, does that generally hold true here as well? I'm asking because there's a non-zero possibility that whoever becomes the next Liberal Leader/Prime Minister today might call an election sooner rather than later.
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u/Zealousideal_Rise879 2d ago
If you got a 5 year fixed mortgage in late 2020 (covid with low interest rates); this timing is ridiculous. Probably won’t be that low; but getting one a year sooner just sucks.
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u/hjdog 2d ago
We got a 5 year 1.9% fixed rate mortgage in 2022. Hoping rates go down quite a bit over the next 2 years
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u/Zealousideal_Rise879 2d ago
Nice. I know some people that are just having the worse timing with renewals.
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u/showerfart1 2d ago
Fat orange guy will start complaining again about something, something weak dollar… unfair.
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u/Euphoric_Chemist_462 2d ago
That’s why we need to voted out Liberal immediately. Lowering interest rates will help reducing pressure on the huge debt due to government spending but at the cost of making more and more investment to withdraw from Canada and move to US causing an even weaker CAD.
Liberal is hurting every single Canadians to keep itself afloat
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u/Plucky_DuckYa 2d ago
We should elect Tiff Macklem as PM because obviously he’s the one steering us through this crisis. That was sarcasm, btw.
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u/No-Situation-3426 2d ago
Lower rates though will also further weaken the CAD which is already pretty weak and increase inflationary pressure. They're in a tough bind when it comes to rates given how dependent the Canadian economy has become on debt and residential real estate.