Fantastic news! The annual inflation rate for October dropped to 3.1%, a significant decrease from September’s 3.8%. The Royal Bank’s projection hit the mark, while the Bank of Montreal had forecasted a slightly higher rate of 3.2%. This positive development is attributed to a decline in gas prices and a moderation in grocery prices.
Excluding food and energy, inflation fell to 2.7%. Two other inflation measures, trim and median core rates, were also lower. These are closely tracked by the Bank of Canada so it was important they also headed down.
Ultimately, the obstacle to reaching the 2% target lies in high shelter costs, encompassing rent and mortgage interest payments, which are a direct result of the Bank’s rate increases.
This is very favourable news for the Bank of Canada as it prepares for its next interest rate decision on December 6th, when we anticipate another rate hold. Some economists predict the first rate cut as early as April 2024, with additional cuts throughout the year due to slower economic growth and a softer labour market. While a return to the extremely low rates seen during the pandemic may not be likely, lower rates are certainly on the horizon.
Here in the GTA, we are in a buyer’s market. Now is a great time to look around for that perfect deal. If you aren’t yet financially ready but recognize the financial benefit of buying before prices rise, consider strategies like:
- a gifted downpayment
- securing one or more co-signers to strengthen your mortgage application
- renting out part of the home
- selling assets
- getting an early inheritance, or
- using an alternative lender with more flexible qualifying criteria.
We’re here to assist, so let’s talk!