Bank of Canada Update – December 10th

The Bank of Canada decided to hold interest rates, with predictions suggesting they may drop further in 2026.

Dan Ahlstrand
The Bank of Canada needs to make up its mind on interest rate decisions. And folks, this is the last one of 2025, the Bank of Canada is announcing today that it’s gonna leave things alone.

Clinton Wilkins
It’s a hold. We are not surprised, though.

Dan Ahlstrand
You know, I were kind of talking about this when you were doing in your doing the live show, and that the the prediction is that that interest rates are probably going to continue to drop in 26 but because of the situation, the economy, some of the issues, bilateral issues, I will say, the Bank of Canada choosing to just not touch things right now.

Clinton Wilkins
Yeah, exactly. And I mean, I think we’re in one of these situations where this has happened before, in a rate reduction environment, that we’ve come to December and, okay, we’ve gone into a hold. It doesn’t mean in January, they won’t continue cutting, but there are a couple of things that are going to impact it, and we’re watching these things carefully. One is GDP. The other one is inflation. But just even the relationship and what’s going on with the US, there’s going to be some changes. Obviously, there’s some contracts being renegotiated, which is huge, which is going to be huge, and all these things do take, you know, in the bank account does take into account. The thing is, we are in a recession, but it’s a weird kind of situation where no one’s talking about it, and the job numbers are up, and inflation is up. It’s not acting like what we would normally see as a recession. But the one thing that they were putting in the writing today was around the GDP. It’s kind of like snapping back like every quarter. And some of this may not be like the real numbers, because obviously, there’s some delay in getting that information. There are some things that we’re still seeing a hangover from which like the carbon tax and stuff like that. So going into next year, I’m cautiously optimistic. I think the rates are going to continue to go down. But obviously, there are a lot of pros with being in a variable product that’s attached to the Bank of Canada because if the rates continue to go down, people can take advantage of that type of rate product. Plus, typically, right now, a variable rate mortgage is less expensive from a rate perspective than fixed, you know, there and there’s going to be some additional changes. Like, I’ve been really watching the bond market this week. And let me tell you, we may be in a situation that we even see the fixed rates increase, because the bond market was that’s what’s really kind of dictating so we’re watching that and and don’t be surprised if you see fixed rates kind of edging up a little bit, like it might, we might even see like, 25 basis point type increase in fixed rates across the board. So I think we’re going to see more of a separation between the cost of borrowing a variable and a fixed, and historically, variable has been less. One thing that I was, I was reading today, which I thought was very, very interesting, was at the top of the kind of rate environment, or I guess, at the pricing environment in terms of homes, was 2023, and the bank Canada basically took the rates from point two, five to 5% and kind of across the board in Canada, the house prices have decreased 25% we’ve not seen any decrease here in Halifax. So I think that that’s very interesting, but now it’s been kind of the other situation. We’ve gone from this kind of peak of the environment, and the bank account has gone from, you know, a 5% key overnight rate down to 2.25 and house prices still dropped. They’re still down across the country about 1.4% so you know, as much as we think house prices are tied to what’s going on with the interest rates, it’s not necessarily the case. Rates really have come down a lot over the last, you know, 12 plus months, and it’s not really spurred on the housing market as much as people, I think, were, you know, fearing that it would happen.

Dan Ahlstrand
Stats Canada reported, I think it was last, late last week, that the national housing price numbers were dropping across the country, but Halifax is essentially Canada’s hottest housing market at this point.

Clinton Wilkins
A 3- 5% increase in real estate prices in Halifax will certainly a lot more listings. So I think that’s an interesting story. And people think more listings means it’s going to become a buyer’s market, and the sellers are going to start getting desperate in terms of selling. That hasn’t happened here. It’s really a story of demand. The one thing I’m going to be watching going into 2026 is that we have a lot of rental units coming online here, even all around the studio. There are towers everywhere and cranes in the sky.

Dan Ahlstrand
13,000 units in HRM are being built as we speak.

Clinton Wilkins
We have one of the most unaffordable cities from a rental perspective, because the average rent is just under $2500, which may not seem crazy. You know, maybe in Toronto, the average rent is $5,000, but the rent compared to income, we are the most squeezed here in Halifax, so I hope it’ll bring. Those rent costs go down. But, you know, consequently, renting is very unaffordable, but home ownership is a lot more affordable here than it is in a lot other a lot of other places across the country.

Dan Ahlstrand
Couple together the down payment, as long as you gain $2,500 a month for rent.

Clinton Wilkins
Correct, as long as you can get into the housing market, it is more affordable overall compared to other areas of the country.

Dan Ahlstrand
Clinton, people are asking, now that the bank has spoken and we’re we’re still thinking that there’s going to be at least a couple of rate reductions in 2026 those that are looking maybe to get into the market, maybe they’ve got that, that down payment ready to go, and those that are maybe looking to upgrade or looking to downsize their homes. What advice are you giving them? Is December the time to go? Is January the time to go? Or should we wait till the spring to see what the next, next change is with the Bank of Canada, right?

Clinton Wilkins
Love the first quarter of the year. Dan, let me tell you that’s typically, I think, where consumers get the best deal from a purchase perspective. Typically, anybody who’s selling a home and they’re going into this winter season, they don’t want to carry this home through the winter, they don’t want to shovel, they don’t want to insure it, they don’t want to heat it. So if you’re looking at listings that you know started in 2025, going into 2026, I think it becomes a little bit more of a buyer’s market. And typically, those sellers that have been holding on for more than that, 30, 60, 90 days, they’re going to become more negotiable in that January, February and March season. I can tell you, by the time March hits, we’re usually gangbusters on all types of transactions. So I think the best kind of deals, and I think the most negotiating power, is usually like January, February, to be honest.

Dan Ahlstrand
What are you expecting for the average house price? I know that we’re, we’re sitting somewhere around 540, I think was the last number I saw, with you saying on the live show last week, or when we did it, that the $600,000 price tag is the kind of sweet spot, where those aren’t staying on the markets. What are you expecting for the home value when we move forward?

Clinton Wilkins
I think 600,000 in Halifax is close to the average when we’re looking at that 540. If we’re looking at a bigger, kind of expanded footprint, you know, I think that’s still going to be a very hot price point. And I think the ones that we’re seeing sit on the market longer are the, you know, 770-plus price point. I think those are sitting, and fewer buyers can qualify for, or are willing to sell, maybe their starter home to buy up. And I think there’s this whole slowdown in the market from people entering the market. Obviously, that’s challenging for a first-time homebuyer, but I think the clients that we saw five and 10, 15 years ago, they might not be buying bigger homes just due to the cost of borrowing. I think as we continue to see the rates off, and I think that’s going to re-normalize a little bit, and I think there’s going to be more, you know, more transactions happening in all these different price points. But I would continue to say always, the median is going to be the hottest, and anything that’s really below that average, I think the demand is just going to be, continue to be very high.

Dan Ahlstrand
Property taxes. Clinton, we’ve had a big discussion on property taxes here on the program as of late. The city council is looking for some more information on the cap, the assessment cap. Your thoughts on property tax, the cap and the fairness in taxation in a neighbourhood,

Clinton Wilkins
I understand everything is more expensive. We’ve been squeezed at the grocery store. HRM needs to bring in more revenue from a tax base to be able to continue to operate and provide us with services. And we always want more, but we don’t want to pay more. You know, for me, what I really would love HRM to focus on is increasing the tax base more so than increasing the tax rate. And you know, if we can get some of these shovels in the ground, I think we can get more homes to be able to increase the amount that’s going to go to the coffers, to be able to support the social services and all the services that HRM offers us every day. We are very service-rich here in Halifax, and I think we don’t want to give up this lifestyle that we’ve built. I think Halifax is one of the best places to live across the country, and it’s certainly been a very good place for me to do business as well. I want to see that continue to be maintained. I think we’re going to continue to see increases from HRM. I think a 10% or 10 and a half percent increase is a lot. The one thing that we also need to think about, as you know, residents here in a municipality, the municipality is benefiting from these assessments continuing to go up. So I think it’s going to be a balance between what’s going on with the cap, what’s going on with the assessment, what’s going on with the tax rate, but I think all those things being said, let’s just get some shovels in the ground.

Dan Ahlstrand
If somebody wants to get in touch with you or with your crew and is looking at January and February, what’s the best way to do that?

Clinton Wilkins
The best way is to visit us online at TeamClinton.ca/radio. We have hundreds and hundreds of blog posts. You can see what Dan and I look like, and there are links on all our social posts. And you can flow through and get on our Spotify and our Apple Music, and listen to all our shows. And you can also hear us on the 95.7 website as well. And Mortgage 101, back in January. We are back in January, and January is Merry Debtmas.

Dan Ahlstrand
That is Clinton Wilkins and Mortgage 101. You can pick up those episodes on our website, in our podcast section, and look for a new episode in January.