TD: How likely is another Bank of Canada rate cut in March?
With the second Bank of Canada (BoC) rate announcement this year around the corner on March 12, many Canadians are eager to see if the central bank will cut its lending rate again.
In January, the BoC cut its lending rate by 25 basis points, bringing it down from 3.25% to 3%.
So, is more rate relief on the way? According to TD Economist Derek Burleton, the BoC is likely to cut its lending rate at the upcoming announcement by 25 basis points.
We are anticipating a follow-up cut in March, and TD Economics predicts the central bank will bring its lending rate down to 2.75%, Burleton said.
Since the inflation data came out a few weeks ago, market odds of a cut fell as low as 30%, but have since jumped to 90% following the imposition of U.S. tariffs on Canadian exports. So, while theres still a chance that the central bank will announce a rate hold, there is a growing consensus that a cut is in store.
Burleton explained that the Bank of Canada needs to help prepare for the economic risks on the horizon especially around tariffs.
Even with recent reports showing a resilient job market and robust GDP growth in Canada, the central bank needs to ensure the economy is prepared for U.S. tariffs to hit Canadian exports, he said.
https://stories.td.com/ca/en/article/will-bank-of-canada-cut-interest-rates-march-2025
Statistic Canada: Investment in building construction, December 2024
Overall, investment in building construction rose 1.9% (+$408.1 million) to $21.8 billion in December, with gains recorded across all components. The residential sector grew 2.2% to $15.1 billion while the non-residential sector was up 1.3% to $6.7 billion. Year over year, investment in building construction grew 4.7% in December.
On a constant dollar basis (2017=100), investment in building construction increased 1.5% from the previous month to $13.0 billion in December and was up 1.6% year over year.
Multi-unit component drives residential sector gains in December
Investment in residential building construction was up 2.2% (+$323.9 million) to $15.1 billion in December.
Single family home investment edged up 0.8% (+$60.7 million) to $7.3 billion in December, marking its fifth consecutive monthly increase.
Investment in multi-unit construction rose 3.5% (+$263.2 million) to $7.7 billion in December, rebounding from two significant and consecutive monthly declines.
https://www150.statcan.gc.ca/n1/daily-quotidien/250213/dq250213a-eng.htm
CREA: New Listings Jump to Start 2025 as Tariff Uncertainty Weighs on Sales
Canadian MLS Systems posted a double-digit jump in new supply in January 2025 when compared to December 2024. At the same time, sales activity fell off at the end of the month, likely reflecting uncertainty over the potential for a trade war with the United States.
Although sales were down 3.3% on a month-over-month basis in January, this was mostly the result of sales trailing off in the last week of the month.
Meanwhile, the number of newly listed homes increased with an 11% jump compared to the final month of 2024. Aside from some of the wild swings seen during the pandemic, this was the largest seasonally adjusted monthly increase in new supply on record going back to the late 1980s.
The standout trends to begin the year were a big jump in new supply at an uncommon time of year, as well as a weakening in sales which only showed up around the last week of January, said Shaun Cathcart, CREAs Senior Economist. The timing of that change in demand leaves little doubt as to the cause uncertainty around tariffs. Together with higher supply, this means markets that had been steadily tightening up since last fall are now suddenly in a softer pricing situation again, particularly in British Columbia and Ontario.
https://www.crea.ca/media-hub/news/fourth-quarter-housing-data-hints-at-home-sales-rebound-for-2025-2/
