April 12, 2023 - The Bank of Canada announced today that it will continue to hold its key interest rate at 4.5%.

2021 and the early months of 2022 saw low inventory, record-high housing prices and low interest rates. It was a combination that resulted in further reducing inventory and escalating real estate prices. In efforts to take inflation and ease the real estate market, the Central Bank raised its key interest rates eight consecutive times since March 2022, bringing it from 0.25% to 4.5%. This is the highest this rate has been since January 2008. In February 2023, and now April 2023, the BoC announced an interest rate hold.

Inflation in Canada

Inflation in Canada peaked at 8.1% in June 2022, but has been declining since. November's inflation rate was 6.8%. February's inflation rate fell to 5.2%. The Bank of Canada expects inflation to continue to fall, and reach about 3% by mid year, and back down to its target of 2% by the end of 2024.

Interest Rates, Inflation & Real Estate

As interest rates and inflation rose, consumer confidence in the real estate market wavered. Was there going to buy a housing crash? Many would-be buyers sat on the sidelines. February's rate-hold announcement, along with the start of the spring market, seemed to renew buyer confidence. With the second rate-hold this year, buyers will continue to understand that we're in the new normal.

For all the factors that can affect a real estate market, in fact, there's never a bad time to buy - it's your strategy that counts. As long as you can wait out any market dips, then buying now (regardless of the rate) ensures you're building your equity. And, as history has shown, the sooner you can start the better.

If you've been thinking about making a move, give us a call at 250-258-9888. We'd love to strategize with you.

In the meantime, check out the latest Kelowna Real Estate Market Stats.