Canadian Inflation Cools to 4.3% in March 2023
Canada's inflation rate came crashing down to 4.3% in March 2023, 17% below February's reading of 5.2% and nearly half the peak inflation experienced in June 2022.
Food prices had spiked at their fastest pace in decades but are now showing signs of decelerating but are still increasing more than twice as fast as the overall inflation rate.
The cost of carrying a mortgage was another major factor pushing up the cost of living, having increased by 26.4% in the year up to March. As interest rates are held flat, this will no longer contribute to rising inflation.
The Bank of Canada is forecasting rate to hit 3 per cent in a few months.
Put this all together, and I think the worst is now behind us. I expect inflation to be more stubborn between 3-4%, but the need to continue to increase interest rates is gone since the effects of the historic increases are still working their ways through the economy.
This stability and realizing that the "sky is not falling" and the bottom is likely in has many people returning to the market. We are seeing prices starting to rise again in major markets across Canada, and with over 1,000,000 new people in the country and more on the way, I think you will see strong price growth return.
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