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Bank of Canada Holds Interest Rate at 2.75%: What This Means for the Future of Real Estate in 2025
The Bank of Canada has officially held its benchmark interest rate at 2.75%, marking a strategic pause after a series of rate cuts. For buyers, sellers, and investors alike, this decision sends a strong signal: the Canadian real estate market is entering a new phase of opportunity and cautious optimism.
Why Did the Bank Hold the Rate?
After seven rate cuts since mid-2024, the BoC is taking a "wait and see" approach, citing global uncertainty, especially around U.S. trade policy. Inflation has eased to 2.3% in March—down from 2.6%—but the central bank wants more clarity before making its next move.
Real Estate Market Outlook: 4 Key Takeaways
1. Mortgage Rates Stay Competitive
Even with the rate hold, mortgage options remain attractive:
3-year fixed rates: ~3.69%
5-year fixed rates: ~3.74%
Variable rates: ~4%
This means homeownership is still within reach for many Canadians, and refinancing may still be worthwhile for current homeowners.
2. Home Sales Are Expected to Rebound
According to the Canadian Real Estate Association (CREA):
Home sales projected to rise 8.6% in 2025
Average home price expected to increase 4.7%, reaching $722,221
If you’re on the fence about buying or selling, these numbers suggest now may be the sweet spot before prices rise further.
3. Ontario Is a Buyer’s Market
Ontario currently has a sales-to-new-listings ratio of just 34%, putting power into the hands of buyers. This gives you more room to negotiate, explore options, and make decisions without the intense pressure of past seller-driven markets.
4. Economic Uncertainty Still Looms
The BoC’s hesitation is partly due to global tensions and trade issues. That means further rate cuts could still be on the horizon—making this moment especially critical for those looking to lock in favorable mortgage terms or make strategic real estate moves.
What Should Buyers & Sellers Do Now?
Whether you're considering buying your first home, investing in a rental property, or selling your current residence, the next few months could present a unique opportunity.
As a buyer:
Take advantage of stable mortgage rates before any potential increase. Use the buyer’s market to negotiate strong deals
If you’re a seller:
Now is the perfect time to list. Serious buyers are actively searching, and fewer listings mean your home will stand out. Act early to attract strong offers before more sellers enter the market.
Final Thoughts from Tony & Ledi
At Tony & Ledi Real Estate, we’re here to guide you through every twist and turn of the market. We don’t just sell homes—we help you build futures.
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