BoC hikes rates for the first time in over three years
What’s next for the BoC?
For now, it looks unlikely that the central bank will embark on a series of steep hikes similar to the last time it started raising rates.
In March 2022, the BoC bumped rates 25 basis points higher after nearly two years at rock-bottom lows of 0.25% – and that was a sign of things to come, with its policy rate spiking by a further 450 basis points in the 16 months following that move.
This time around, the weakness of the Canadian economy and the continuing negative impact of trade tensions with the US mean lenders and financial markets are pricing in only mild further increases by the Bank.
What the decision means for the housing market
For the housing market, it remains to be seen whether today’s decision will push potential homebuyers onto the sidelines.
Housing and mortgage market watchers had been increasingly anticipating some rate increase by the BoC in recent weeks – but even the expectation of hikes hadn’t compelled many would-be buyers to rush into the market to secure mortgage rates at their current level.
