The Bank of Canada has once again held its key interest rate steady at 2.75%, signalling cautious optimism about the country’s economic recovery. After seven rate cuts in a row, many expected another interest rate cut, but a surprisingly strong GDP report changed the tone.

So, what does this mean for the real estate market in the Greater Toronto Area (GTA)? Let’s break it down.

A Stronger Economy, A Stable Rate

Last Friday, Canada’s GDP for the first quarter of 2025 came in stronger than expected. That was enough to give the central bank confidence to stay the course for now.

According to BMO economist Priscilla Thiagamoorthy, “Although the job market is stressed, the biggest goal for the central bank is to ensure price stability.” With inflation now down to 1.7%, helped by the removal of the consumer carbon tax, there’s still room for cautious optimism.

What Experts Are Saying

Before the announcement, markets had priced in a 73% chance of a pause and a 27% chance of an interest rate cut. While some economists believe more monetary support is needed, especially amid trade uncertainty, the Bank of Canada has chosen to wait and watch.

One major concern? President Trump’s plan to hike steel and aluminum tariffs from 25% to 50%. As Desjardins economists warned, “This could hurt Canada more than any country other than maybe Mexico.”

Still, the decision to hold rates steady suggests the Bank believes Canada is weathering global volatility better than expected.

What This Means for GTA Real Estate

Here in the GTA, homebuyers, sellers, and investors are watching interest rate cut speculation closely. A stable rate can offer more predictability, especially for buyers using fixed-rate mortgages or those waiting for signs of a market rebound.

• For buyers: You may still benefit from historically low rates without rushing against a sudden increase.
• For sellers: Stability often brings more confidence to the market, increasing buyer activity.
• For investors: A pause may offer time to reassess your portfolio, especially if another interest rate cut is delayed.

Don’t Sit on the Sidelines

Whether you’re planning to buy your first home, sell your current one, or invest strategically in the GTA market, now’s the time to stay informed. Interest rate cut decisions directly affect affordability and long-term value and this pause could be your window of opportunity.

📞 Contact us today to discuss your options or get matched with a local expert.

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