this post was submitted on 29 Oct 2026
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Bank of Canada raises interest rate as inflation projected to worsen (www.ctvnews.ca)
submitted 6 days ago by quanin@lemmy.ca to c/canada@lemmy.ca
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OTTAWA — OTTAWA - The Bank of Canada raised its policy interest rate by 25 basis points to 2.5 per cent. It’s the first hike since July 2023. The central bank wants to control inflation by reducing the risk that high fuel prices could spill over and seep into the overall economy.

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[–] definitemaybe@lemmy.ca 1 points 5 days ago (1 children)

I didn't address your point about housing. You're right that low interest rates have exacerbated the problem, but the bigger upstream causes are more that:

  1. It's political suicide to run on a platform of reducing housing prices. People who vote are, disproportionately, homeowners who don't want numbers to go down.
  2. The missing middle. We're building the wrong kind of housing, and zoning bylaws are preventing unit densification where people want to live.
  3. The lack of non-market-rate housing options. Affordable housing options have a disproportionate effect on housing costs. Canada hasn't invested in, basically, any affordable housing since the 70s, and we have some of the lowest non-market-housing rates in the developed world.
  4. Housing being held as investments first, and housing second.

To be affordable, housing needs to drop 50%. Interest rates being low contribute, on the margin, but don't account for that big of a difference. You'll notice that housing prices barely dropped at all, and even continued to rise in some areas, when rates skyrocketed 4 years ago.

[–] quanin@lemmy.ca 1 points 5 days ago

It’s political suicide to run on a platform of reducing housing prices. People who vote are, disproportionately, homeowners who don’t want numbers to go down.

It's never actually been done, so we don't know that. Even Singh didn't run on reducing housing prices last year.

The missing middle. We’re building the wrong kind of housing, and zoning bylaws are preventing unit densification where people want to live.

Speaking as someone who currently rents an apartment, if I can ever get to a point where I can own something, I sure as hell don't want to own one. The only thing worse than renting your individual unit is owning your individual unit and fighting with the other individual owners about maintaining the common areas.

The lack of non-market-rate housing options. Affordable housing options have a disproportionate effect on housing costs. Canada hasn’t invested in, basically, any affordable housing since the 70s, and we have some of the lowest non-market-housing rates in the developed world.

And the non-market housing that does exist is in such disrepair that you couldn't pay me to live in it. Because in this country, non-market housing means controlled by the government, and that's a political football.

Housing being held as investments first, and housing second.

Which is why I said it's a growth industry. They bought low. They're not about to sell lower.

To be affordable, housing needs to drop 50%. Interest rates being low contribute, on the margin, but don’t account for that big of a difference. You’ll notice that housing prices barely dropped at all, and even continued to rise in some areas, when rates skyrocketed 4 years ago.

Canada's population also skyrocketed 4 years ago, and only stopped skyrocketting (at least, as much) in the last year or so. There were two different demand levers being pulled. BoC pulled theirs to reduce, GoC pulled theirs to increase.