Canada Inflation Falls Again to 5.9%
Inflation in January 2023 was 5.9% - this is the seventh straight decrease from the high of 8.1% in June 2022. Everyone is expecting the Bank of Canada (BoC) to now hold rates steady, but the jobs market has continued to run hot.
Right now, we are realizing that “soft landing” everyone was hoping for. Just because the economy is strong does not immediately mean interest rates need to rise – especially in an environment today where external factors (i.e. the war in Ukraine) has caused oil prices to spike, causing the majority of inflationary pressures. As the world continues to adapt, these pressures will decrease and so will the need for higher interest rates.
If you are a real estate investor, now is the time to be adding to your portfolio because when interest rates start going back down (and they will), expect a return to bidding wars, properties selling in days, and constantly increasing prices. It is in the Canadian national psyche to want to buy real estate and nothing you or I can do will change that.
Pre-construction properties are the ideal way to take advantage of this because you don’t have to worry about getting a mortgage (or interest rates) for several years while getting appreciation on the full purchase price even though you have only put down a small deposit (typically 10-15%).