This morning, the Bank of Canada trimmed interest rates for a fifth consecutive time as the country's economy grows at a slower pace than expected.
The 50bps cut (or 0.50%) was largely expected by analysts and economist, as Canada's GDP grew by only 1% in Q3 2024, and Q4 2024 is looking much weaker than projected.
Not only that, but Canada's unemployment rate also rose to 6.8% in November, making it tough for those who are looking for work, especially those younger and newcomers.
BMO chief economist expects that to increase further, averaging 7.0% in Q1 2025, before receding slightly. Further complications to the Canadian economy are clouded by uncertain US tariffs that were threatened, which would also further weaken the Canadian dollar (currently 0.71 CADUSD at time of writing). Further Details.
The silver-lining in this is that cost for housing as improved, as well as the larger inflation picture for goods and services across the country... What this could do for Alberta, and Calgary could potentially mean a more balanced market into the new year (i.e., further demand for housing driven by lowered interest rates but offset by the impact of unemployment, and lower population growth). That said, there still remains consistent demand in Calgary for homes priced under $600K, and more a buyers' market for anything above $700K, for now.
The next BoC rate announcement will be on January 29, 2025.
Additional inflation data will be released over the next few weeks for an update on November figures.
