The Bank of Canada announced today that it is holding its target overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. In plain English: no rate cut, no hike — just a pause and a whole lot of caution.
For Halifax buyers and sellers, this decision reinforces what we’re already seeing on the ground: a market that’s functioning, but with measured confidence and zero appetite for overpaying.
Why the Bank Is Standing Still
The Bank’s outlook hasn’t shifted much since its October Monetary Policy Report, but the risks around it absolutely have. Ongoing uncertainty around U.S. trade policy, tariffs, and geopolitical tension continues to cloud the economic forecast — especially for Canada.
South of the border, the U.S. economy is still outperforming expectations thanks to consumer spending and AI-driven investment. Meanwhile, Europe is being supported by service-sector growth and fiscal stimulus, while China’s growth is gradually slowing as domestic demand softens.
Globally, the Bank expects economic growth to average around 3%, which sounds fine — until you remember Canada isn’t sharing equally in that momentum.
What’s Happening in Canada Right Now
After a strong third quarter, Canada’s economic growth likely stalled in Q4. Exports are still getting knocked around by U.S. tariffs, but domestic demand is starting to pick up.
Employment has improved slightly, but let’s be honest: an unemployment rate of 6.8% isn’t exactly lighting a fire under buyer confidence. Businesses are still hesitant to hire, and population growth is slowing — both of which matter a lot for housing demand.
The Bank is now projecting:
- 1.1% growth in 2026
- 1.5% growth in 2027
That’s modest growth, not a boom — and that’s important context for anyone pricing a home in Halifax.
Inflation: Cooling, But Not Gone
Inflation rose to 2.4% in December, largely due to temporary base effects from last winter’s GST/HST holiday. Strip taxes out of the equation, and inflation has actually been slowing since September.
Core inflation is now hovering around 2.5%, down from 3% in October, and the Bank expects inflation to stay close to its 2% target through the projection period.
Translation: inflation isn’t the emergency it was — but it’s not low enough yet for the Bank to confidently start cutting rates.
What This Means for Halifax Real Estate
This rate hold confirms what I’ve been telling Halifax sellers for months:
- Buyers are price-sensitive
- They are patient
- And they are absolutely not stretching just because a home is listed
For buyers, borrowing costs remain stable, which is good news — but affordability is still a real constraint, especially with job uncertainty lingering.
For sellers, the takeaway is blunt but necessary:
pricing based on yesterday’s peak conditions will get you ignored today.
Homes that are priced correctly are still selling. Homes that aren’t? They sit — regardless of interest rates.
The Bigger Risk Ahead
One major wildcard remains the upcoming review of the Canada–U.S.–Mexico Agreement (CUSMA). Any changes there could ripple through trade, employment, and ultimately housing demand — particularly in export-sensitive regions.
That uncertainty is exactly why the Bank is keeping its foot hovering over the brake.
If you’re thinking about buying or selling in Halifax in 2026, this is not the market for guesswork. Pricing, timing, and strategy matter more than ever.
Written by Sandra Pike
Halifax Real Estate Agent | Data-Driven Market Specialist | Serving Halifax & Nova Scotia
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