The latest announcement from the Bank of Canada (BoC) on June 7 may have come as a bit of a surprise to some Canadian homeowners, buyers and sellers. The BoC announced a rate hike of 25 basis points, raising the Bank’s trend-setting interest rate in Canada from 4.5% to 4.75%.

So what does this mean for Canadians, specifically those looking to buy or sell in the near future?

The rate increase will further impact spending habits among Canadians and those looking to purchase a home during the remainder of 2023, according to Chris Jokel, Senior Data Engineer with the Canadian Real Estate Association (CREA).

“Financial conditions have tightened, and general price growth has slowed in response to interest rate increases that the Bank of Canada had previously carried out eight times in pretty quick succession to combat higher inflation,” he explains.

“The BoC looks at many factors in our economy, but one of their primary roles is ensuring consumer price inflation remains centred on their 2% target. With inflation now potentially remaining stubbornly above the Bank’s target range, the Bank decided to add another rate hike and have made it clear they’ll raise rates again in the future if needed.”