Today, January 28, 2026, the Bank of Canada has announced that it is holding rates at 2.25%.
The Bank of Canada continues to worry about tariff uncertainty and trade relations with the United States. In its January 2026 Monetary Policy Report, the Bank emphasizes that US tariffs remain elevated and the unpredictability of future trade arrangements, particularly with the ongoing review of the Canada-United States-Mexico Agreement (USMCA), is disrupting the Canadian economy, weighing on growth, holding back business investment, and prompting structural adjustments as businesses diversify away from US reliance. This contributes to modest projected GDP growth (around 1.1% in 2026 and 1.5% in 2027), heightened risks to the outlook, and unusually high uncertainty, though inflation is expected to stay near the 2% target as tariff-related cost pressures are offset by excess supply. The Bank is closely monitoring these developments while maintaining its policy rate at 2.25%.
The Canadian economy would gain significant stability from a robust trade agreement with the United States, provided the government can overcome its ineffective negotiation efforts.
While such a critical deal remains in limbo and uncertainty in the economy persists, the decision to hold rates signals that now is the time to buy. This news should bode well for market activity over the coming months if buyers recognize the opportunity rather than continuing to sit on the sidelines, as the next announcement could be an increase.
In Humber Bay Shores, active inventory has fallen from over 300 active listings this summer to just 189 now, signalling renewed buyer confidence.
Benjamin Tal, the managing director and deputy chief economist for CIBC Capital Markets, says, “I think that the Bank of Canada made it very clear that they’re not going to cut any more. Something really bad will have to happen for them to cut. So, I think that you will see more people entering the market, realizing that that’s the bottom as far as the Bank of Canada is concerned. That will add a little bit to the spring market.”
Kevin O’Leary
Kevin O’Leary has announced that he believes that the end is in sight for these trade problems because for President Trump to proceed with his vision for the Golden Dome missile defence system he will need Canada’s support, which O’Leary believes can be used as leverage to make a meaningful deal between Canada and the USA. In addition, the need for power for Ai centres will also create a need that Canada can deliver upon. As a result, O’Leary says, “I’m going long on Canadian dollars and power sources. I think Canada is going to be part of this.”
Widely regarded senior economist for BMO, Robert Kavcic, has stated, “Buyers are watching the market and seeing prices come down. They must weigh whether they risk buying too late and see prices take off – or too soon and see prices slip farther. The spread between the amount sellers are asking for and what buyers are willing to pay is wide. The more time that goes on, the more sellers will relent. It’s more likely that the ask will come down than the bid will go up.”
Kavcic has said for sellers, “You can only wait so long. There’s a cost to waiting, too.”
What might a condo market recovery look like?
In discussing new condo construction, our own Dalinda Team client and developer, Julie Di Lorenzo of Mirabella Development Corporation, has stated, “You’ll notice there’s a proliferation of luxury products aimed at affluent, downsizing baby boomers. All of a sudden, there are lots of over $2,000-a-square-foot projects.”
Shaun Hildebrand, President of Urbanation, has said, “Larger non-luxury units – those in the 900-sq.-ft-plus range – have retained most of their value as the market has tanked, whereas prices for those units in the under 600-sq.-ft segment are now off by 20 per cent. The undersupply [of larger apartments] will drive product design in the next cycle, with much more emphasis on the end-user experience.”
This news bodes well for established condominium buildings that offer larger spaces, like Palace Place. While deals are sought after, savvy buyers are quick to seize high-value opportunities offering expansive layouts and stunning views.
The best rates that we have seen so far:
3 year fixed at 4.04% (increased from 3.89% in December 2025)
5 year variable at 3.70%
The next scheduled date for announcing the overnight rate target is March 18, 2026.
E: LDALINDA@DALINDA.NET • TEL: 416-725-7170
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Palace Place, 1 Palace Pier Court, and Palace Pier, 2045 Lake Shore Boulevard West, in Humber Bay Shores.
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View all current and past Palace Place listings for sale here.
Luke Dalinda, Realtor. Royal LePage Real Estate Services Ltd., Brokerage.
View all current and past Palace Place listings for sale here.