One of the most important numbers for real estate business is interest rate. As a Toronto real estate agent I am keeping my eye on steps of Bank of Canada. Everybody at least a bit educated on the field of economy knows, how this tool (should) work. Higher interest rates keep mortgages more expensive, thus cooling the economic life and real estate business as well. On the other hand, higher rate works as a protection against inflation.

Key interest rate is now set to 3.0%. Generally, we can see correlation between FED interest rates (now at 2.0%) and BoC rates. After some period oh rates over 4.0% both banks started to lower them, threatened by the economic slowdown. CoB's last step was from 3.5% to 3.0% on April 22. Next cut was expected in June, but for suprise, Bank announced interest rate unchanged.

Why? Despite slowdown of economy (there was real GDP growth below zero during 1Q!!, the threat of world spreading inflation (you know - oil, food, commodities...) forces everybody to pay attention. So next move of Canadian interest rate is questionous ans keeps Toronto real estate in doubts...