Inflation Decreases Again, On Target for EOY
Canadian inflation again eased in December 2022 to 6.3%, down from the high in June of 8.1%. If the current trend continues, then inflation will be back within range of the Bank of Canada’s target by the end of the year.
I believe that inflation will run hotter than historic levels but individuals and the economy are JUST starting to feel the effects of the historic increases in interest rates and I expect inflation and economic growth to be tame by the end of the year. This would give the Bank of Canada the ability to reduce interest rates and once that starts, the real estate flood gates are going to blow open because there is so much pent-up demand. I speak to a few people every single day delaying a real estate purchase or investment because they want to “wait and see” what happens – there is fear in the market.
And it’s no wonder! Every day the media is in your face with headlines like “crash”, “plummet”, “historic” but the reality is that in markets like Toronto, you are just back to 2020 price levels … Mark my words, prices will start going back up at some point and it is impossible to time the time the market. Buy and hold – that’s how you build wealth in real estate.