By Rick Machado | June 2025
Over the past year, we’ve seen the Bank of Canada (BoC) pause its aggressive rate hikes and maintain a relatively steady policy interest rate — a move many economists are calling a rate plateau. But what does this mean for homebuyers, sellers, and the broader housing market? And what can we expect heading into the BoC’s July 2025 rate announcement?
Let’s break it down.
🔍 What Is a Rate Plateau?
When central banks like the BoC stop raising or lowering interest rates and instead hold them steady, it’s referred to as a plateau. The Bank has kept its policy rate at 4.25% for the past several months, signaling a wait-and-see approach while monitoring inflation, economic growth, and employment numbers.
🏘️ How the Plateau Is Affecting the Real Estate Market
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Stabilized Buyer Confidence
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After months of rate volatility, buyers are starting to feel more comfortable re-entering the market. The predictability gives room for clearer budgeting and mortgage planning, especially for first-time buyers who were previously sidelined.
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Pent-Up Demand Is Stirring
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Many would-be buyers and sellers delayed decisions during the rate hike period. Now, with borrowing costs appearing more stable, we’re seeing signs of renewed interest, particularly in family homes and entry-level properties.
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Condo and Luxury Segments Still Sluggish
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Despite some uptick in activity, condominiums and luxury properties continue to face challenges. Investor confidence is still recovering, and higher monthly carrying costs are keeping some buyers on the sidelines.
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More Realistic Pricing
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Sellers are gradually adjusting to the new normal. In areas like Sheridan, Erindale, Glen Abbey, and West Oak Trails, we’re seeing a better alignment between asking prices and market value, which has helped improve negotiation dynamics.
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📉 Will Rates Drop in July?
As of now, markets are split. The BoC has hinted at possible rate cuts if inflation continues to trend toward its 2% target. However, it’s also keeping a close eye on wage growth and global economic uncertainty.
What would a cut mean?
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Lower mortgage rates — a welcome relief for variable rate holders and new buyers.
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Increased buyer activity — particularly in the sub-$1M category.
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More competition — expect tighter offer scenarios in desirable areas.
What if the Bank holds again?
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Continued stability can still be positive. It allows the market to breathe, normalize, and absorb recent price shifts without the panic that comes from surprise hikes.
🧭 What Should Buyers and Sellers Do Now?
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Buyers: Lock in pre-approvals now. If rates drop in July, you’ll be in a stronger position to act quickly.
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Sellers: Don’t wait for dramatic price jumps. A well-priced, well-presented home is still selling — sometimes in multiple-offer situations.
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Investors: Look to value-rich areas like Erindale and River Oaks, where long-term potential still outpaces short-term volatility.
Final Thoughts
The interest rate plateau has brought a much-needed breather to the real estate market. Whether the BoC chooses to cut or hold in July, it’s clear the days of rapid rate hikes are behind us — for now. The focus is shifting to balanced growth, and that can mean real opportunity for well-prepared buyers and strategic sellers.
If you’re looking to navigate this shifting market, I’m here to help you make the smartest move — whether you’re buying your first home, upgrading, or investing for the long run.
📞 Reach out today for a customized market update or property consultation.