The Bank of Canada overnight rate will continue to remain at the effective lower bound of 0.25%.
The Bank expects to hold the policy interest rate at this level until economic slack is reduced and the 2% inflation target is sustainably achieved.
When it comes to the housing market in Canada, by looking at the data from July 2020, we can see that the impact of the COVID-19 pandemic is becoming more and more visible as time goes by.
For instance, even though the Teranet–National Bank National Composite House Price Index™ rose in July, the 0.3% increase from June was the smallest July rise in 15 years.
However, activity seems to have picked up in the late summer months. As the restrictions continue to ease, mortgage rates remain at all-time lows, and employment increases, it will be interesting to see if this positive upward trend continues into fall.
For a more in-depth analysis of sales registrations and changing buying patterns of Canadian homebuyers, visit our GeoWarehouse blog: https://www2.geowarehouse.ca/bank-of-canada-interest-rate-september-2020/
Find the full Bank of Canada announcement here: https://www.bankofcanada.ca/2020/09/fad-press-release-2020-09-09/