Canada’s Cooling Inflation Rate Bodes Well For Economy

According to Statistics Canada’s Consumer Price Index for July, our inflation rate reached a 40-month low of 2.5 per cent (https://www150.statcan.gc.ca/n1/daily-quotidien/240820/dq240820a-eng.htm)! This rate was down from 2.7 per cent in June. This is great news for our industry and for potential homebuyers who have been sitting on the fence, waiting for things to settle down. Among the areas where prices have decreased are travel-related services, passenger vehicles and electricity. The All-Items Consumer Price Index for shelter was down to 5.7 per cent from 6.2 in June.

Core inflation measures also eased, which makes a Bank of Canada rate cut likely in September, when the next announcement will be made. In fact, some experts are predicting up to three rate cuts before the end of this year. Interestingly, waiting for more rate cuts may be counterproductive for potential purchasers. Once rates come down, new homes and condos will be in more demand than ever before, and prices are sure to rise. As I always say, my advice is to buy new and buy now!