Market Update

The Bank of Canada recently announced it is holding interest rates at 2.35%, which is positive for buyers. Montreal remains one of the most resilient real estate markets among Canadian cities, with rising prices and increasing demand. The Canadian Real Estate Association (CREA) recently projected an increase in home sales across Quebec, especially in Montreal, driven by pent-up demand and low interest rates. The forecast is for continued growth through 2027 due to limited supply, increased first-time homebuyers, investors from outside Quebec seeking greater value in Quebec than in the rest of Canada, and relative economic stability.

However, global circumstances are fluid and ever-changing, with direct effects on the Canadian economy and real estate market. Last week, the U.S. threatened Canada with a 100% tariff on all goods and services if Canada made a deal with China. The U.S. threatened Iran with war if they do not concede to U.S. demands to limit its nuclear program, and is still trying to expropriate Greenland. Some of these goals are not terrible in themselves; however, how they are approached is the issue. Using threats and the carrot-and-stick approach rather than professional diplomacy may create larger problems for the U.S. and the world than using actual professional diplomacy.

‘Tiff Macklem, governor of the Bank of Canada, announced a possible shock to the Canadian economy due to U.S. trade policy, the president’s threats to the U.S. Federal Reserve and its chairman, Jerome Powell, for not reducing interest rates, and increased global conflicts.’

In an article published in today’s Reuters news agency, the Canadian government is aware of all these issues and how they can effect the market, which is why today, January 29, Tiff Macklem, governor of the Bank of Canada, announced a possible shock to the Canadian economy due to U.S. trade policy, the president’s threats to the U.S. Federal Reserve and its chairman Jerome Powell for not reducing interest rates, and increased global conflicts. Additionally, he revised the Canadian economic forecast downward. As such, investment firms are forecasting interest rate hikes in 2026 and 2027.

The future, however uncertain, always presents opportunities for buyers, sellers and investors. If the current U.S. government remains in power, turmoil persists, and all these issues come to pass, property values may decrease, allowing investors and buyers to purchase property at discounted prices. This scenario also means buyers and potential sellers will have to hold on to their properties till events calm down.

If all this drama and turmoil cease, prices and inventory will rise, hesitant buyers will enter the real estate market, and both global and Canadian real estate markets may normalize, balance, and move in a positive direction. Chances are increasing that these issues may soon cease and repair themselves, in this writer’s opinion, based on current events.

Have a great week.

Joseph Marovitch has been a weekly columnist for Westmount Magazine since 2016

Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children ages 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep-away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible for, Joseph applies this to his present real estate broker career.