The Bank of Canada announced on June 4 that it is holding its key interest rate steady at 2.75%, marking the second consecutive policy meeting with no change to the rate. The decision reflects a cautious stance amid ongoing economic uncertainty, with the central bank choosing to adopt a “wait-and-see” approach. The next scheduled interest rate announcement is set for July 30, 2025.
Factors Behind the Decision
The Bank of Canada highlighted several factors influencing its decision to hold rates steady. Chief among them are ongoing trade tensions with the United States, which have created an atmosphere of uncertainty for Canadian businesses and exporters.
Additionally, while the Canadian economy has shown signs of softness, the downturn has not been severe enough to prompt immediate monetary easing. Inflation, meanwhile, remains somewhat firm — enough to prevent the bank from moving too aggressively toward rate cuts.
Market Outlook
Investors and analysts will be watching the Bank’s next move closely on July 30 for any shifts in tone or policy direction. Until then, the Bank of Canada appears committed to a cautious path, trying to navigate an uncertain global and domestic landscape without fueling inflationary pressures.
Guelph Market Update
Sales volume for June (181) increased 23% from May but was down 38 % year over year. The average sale price $825.681 was about the same as the previous month and the average time on market also remained unchanged at 27 days. Buyers paid 98.6% of asking price on average and 18% of homes actually sold over asking price. However, this number was down 30% from a year ago.
The number of listings that were terminated without selling (176) increased 30% from May and 76% from a year ago. Going into July, there are 626 active MLS listings which is a slight 3% decrease from May but still represents 3.5 months-worth of inventory at the current rate of sales.
While the market hasn’t shown much improvement since last month, it hasn’t gotten worse and I suppose that’s the good news. It looks like any significant rebound will be long and gradual although I’m not convinced that is ready to happen. Lower home prices and interest rates may be what’s needed to really ignite the market.
