The Bank of Canada again reduced its influential policy rate in its latest announcement on Jan. 29, this time by 25 basis points, for the sixth consecutive reduction. The rate now sits at 3.00 per cent, down from 5.00 per cent in April 2024.

This move sets the stage – or at least the hope – for possible further reductions in the coming months to spur the market.

“A rate cut is always welcome news, while a greater reduction would have been even better,” says Debbie Cosic, founder and CEO of In2ition Realty. “The Bank of Canada’s decision is a move that sets a positive tone for the year ahead and signals a potential shift in market conditions.”

“The Bank of Canada (decision) will further increase borrowing capacity for homebuyers and benefit mortgage holders whose loans are coming up for renewal,” adds Phil Soper, president and CEO of Royal LePage. “This latest decrease arrives just before the spring housing market – when demand typically picks up – which should spur buying and selling activity in the weeks ahead.”

“Over the past year, declining interest rates have given Canadians a renewed confidence to enter the housing market,” says Samantha Villiard, vice-president, ReMax Canada. “Despite the ongoing affordability crisis rooted in a lack of housing supply – many Canadians still see the long-term value in homeownership, and so the anticipated decline could prompt greater market activity for the remainder of Q1 and heading into Q2.”

At press time, potential U.S. tariffs were put on hold, leaving Canadians a little weary about the upcoming months.

“The looming promise of hefty tariffs by the United States government is a source of uncertainty for the central bank and consumers alike,” says Soper.

“We believe the Bank of Canada’s focus will be a decided shift from an inflation battle to avoiding an economic downturn. A recession resulting from a tariff tit-for-tat could prompt additional cuts in the short-term to stimulate the economy. Though Canada’s housing market would be insulated for the most part from trade turmoil, economic challenges could eventually cause activity to slow.”

“Of course, we’ll be keeping an eye on economic factors like the potential tariff situation and how it unfolds,” adds Cosic. “But regardless of what’s to come, let’s take this momentum and run with it. Rates are lower, incentives are still strong, and there are some incredible deals to be had.

“If you’ve been waiting for the right time to get into the market – whether you’re a first-time buyer, a move-up buyer or an investor – this is the moment to act. The landscape is shifting, and those who take advantage early will be in the best position moving forward.”

2025 RATE ANNOUNCEMENTS

March 12
April 16
June 4
July 30
Sept. 17
Oct. 29
Dec. 10