Despite predictions of more rate cuts, the Bank of Canada decided to keep its policy rate at 2.75%, with the Prime Lending Rate steady at 4.95%, marking its third consecutive hold.
Wondering why? Here’s a closer look at what factored into their decision.
While some progress has been made in U.S. trade discussions, the policy environment remains unstable, with potential sectoral tariffs still looming. In light of this, the central bank didn’t publish a traditional forecast for GDP and inflation, instead unveiling three scenarios:
Although global trade-war risks have moderated, uncertainties remain. The bank signalled that if weakening economic conditions curb inflation and trade-related price pressures ease, a rate cut remains possible.
Alberta’s housing market shows mixed signs:
- Population Growth: Alberta is set to welcome approximately 122,400 new residents over the next two years, a 2.5% increase, pushing its total population close to 5.1 million by 2027.
- Home Prices: The average house price in 2025 is projected at $509,000, marking a 2.3% rise from 2024 levels.
- Housing Starts: Despite population growth, the expected housing starts in 2025 are forecast at 45,400, which is 5% lower than in 2024.
For Alberta, this stability comes amid housing dynamics that are both optimistic and fragile: rising demand and prices, but a slowdown in supply. If you own a home, you’re in a strong position and could have home equity to refinance. If you’re buying, it’s a high-pressure environment. It pays to be prepared by getting pre-approved, setting a clear budget, and moving quickly on homes that fit.
If you’re wondering what this means for your mortgage strategy—whether you’re renewing, buying, or just keeping an eye on the market—feel free to reach out. I’m happy to walk through your options.
The next rate announcement is scheduled for September 17, 2025.