Canadian Real Estate Market Update – Q3 2021

The Bank of Canada signaled on October 27 that it could hike interest rates as soon as April 2022 and said inflation would stay above target through much of next year, due to higher energy prices and supply bottlenecks. Stronger and more persistent inflationary pressures drove this hawkish policy adjustment.

The central bank did hold the key overnight interest rate at 0.25%, as expected, and said it was ending quantitative easing (QE) and moving into the reinvestment phase, during which it will purchase Government of Canada bonds solely to replace maturing bonds. The hawkishleaning response comes even amidst a less rosy outlook for the Canadian economy, which makes it difficult to reconcile these aggressive rate expectations with downward adjustments to the Bank of Canada’s GDP forecasts through 2023. Indeed, the Bank of Canada acknowledged that considerable uncertainty in its forecasts exist. The Manager will continue to monitor inflation metrics that can have major positive implications for future real estate rents and values.

Read our quarterly Canadian Real Estate Market Update, produced by our Strategy, Planning and Analytics team, to learn more on the current state of each asset class and on what is to expect for the remainder of 2021.