Bank of Canada Holds Rates at 2.75%: What It Means for Real Estate in 2025
Bank of Canada Governor Tiff Macklem speaks following the April 2025 interest rate announcement, where the policy rate was held at 2.75%.
On April 16, the Bank of Canada decided to hold the policy interest rate steady at 2.75%. This marks the first pause after seven straight rate cuts since last year. But while the decision itself was expected, the details in the Bank’s latest Monetary Policy Report offer some important insight into where we might be headed next — especially for real estate.
I read through the full report and here’s a breakdown of what stood out, what I expect to happen next, and how it’s already showing up in today’s housing market.
Quick Summary of the Rate Decision
Rate held at 2.75%
Inflation in March landed at 2.3%, a drop from 2.6% in February
Core inflation remains sticky around 2.9%
The Bank is taking a wait-and-see approach, looking for more consistent data before cutting again
Next rate announcement: June 4
In my view, this isn’t the end of the rate cut cycle. It’s a temporary pause — not a change in direction.
Two Economic Scenarios the Bank Is Watching
Instead of giving one forecast, the Bank laid out two potential paths:
Scenario One: Trade tensions ease over time. Growth remains soft but steady. Inflation returns to target and rate cuts continue.
Scenario Two: A global trade war unfolds. Inflation rises temporarily, Canada enters a recession, and the recovery is slower.
Here’s my personal take:
This too shall pass. A lot of the tariffs that triggered concern have already been suspended or rolled back. I don’t expect them to last long term, and I doubt we’ll be in full trade-war mode by this time next year.
Watch the Full Video Breakdown
If you want more context and commentary, I filmed a short video walking through all of this — including how I think it impacts real estate in the short and long term.
What I’m Seeing in the Real Estate Market
Here’s how all of this is showing up on the ground:
Sales remain slow across most of the GTA
Buyers and sellers are hesitating due to economic uncertainty and the upcoming federal election
Reminder: vote on or before April 28 if you haven’t already
I believe once the election is behind us and if we see another rate cut or two, buyer demand will likely pick back up, potentially in time for the fall market.
Long-Term Impact: Construction and Supply
One of the most important trends right now is the slowdown in new construction. Builders are pulling back across all property types, and this will create a supply crunch in the years ahead.
At the same time, Canada’s projected population growth is slowing due to reduced immigration targets. This will impact future demand — especially in the rental and pre-construction segments.
Not All Properties Are Performing the Same
Small condos, especially those with tenants, continue to face sluggish demand
Low-rise freehold homes are faring better — well-priced, well-marketed listings are seeing strong activity, multiple offers, and even sales over asking
The market isn’t moving evenly. Some segments are soft, while others are competitive and active.
Final Thought
This rate pause is a signal that the Bank of Canada is being cautious, not that the economy is stalling. I still believe we’re headed toward lower rates as the year progresses.
If you’re thinking about buying or selling and want to understand how this affects your plans, feel free to reach out. I’m always happy to talk it through.
