Bank of Canada Raises Rates: Confidence, Not Rates, Moves the Market

The Bank of Canada rate increase does it come as a surprise? No. Is it good for the real estate market? No. Is it the biggest problem for the real estate market? Also, no.

The truth is, in the current environment, even if the Bank of Canada had cut rates unexpectedly, it would not shift the market all that much in my opinion. And the reason is, what is keeping people from transacting is confidence. If you don't feel confident about your job, you do not go into major debt to purchase real estate. It's as simple as that.

And when you look at the state of the Canadian economy, which has been losing tens of thousands of jobs per month in recent months, well, that is the elephant in the room. So the rates, you know, are they important? Sure, they're important. Should they be lower? I think so. But the elephant in the room is confidence. There is very little confidence.

So if you want to know what's going to happen with real estate market, watch for people becoming confident, and then the real estate market will follow that. But the real estate market will not move before people's confidence goes up. Just my opinion, that's my take. I'd love to hear yours. Leave me a note below.