The Bank of Canada announced today that it would increase its policy rate by 0.25%. This decision had been telegraphed in the weeks prior and was made due to the fact that the economy is still overheated and in a state of excess demand.

Rising interest rates have had a tangible impact on the real estate market, leading to fewer home sales and generally lower prices. The value of residential real estate owned by households fell by 3.4% in the third quarter. However, despite this decrease, the total value of residential real estate is still 35% higher than it was at the end of 2019.