BoC Pause: Muted Housing Rebound

Home price growth in Canada is expected to slow to around 1%, lower than earlier expectations of about 4%, mainly due to declining condo prices in British Columbia and Ontario.

Housing demand remains weak, with high inventory levels and slower population growth limiting a strong market recovery.

The policy rate is expected to stay at 2.25%, unless unemployment rises significantly above about 7–7.5%.

Mortgage renewal pressure is easing slightly, as stronger income growth and longer amortization periods have helped soften the expected payment shock.