RE:RE:RE:RE:RE:RE:REITs smell BoC Rate Hike Where I live in Toronto home prices are up close to 10% since January of this year. Now mind you, real estate prices tend to move higher in the spring but nevertheless I find the increase to be worrisome. Canada's weakening Canadian $ drives import prices higher which fuels inflation. Canada's fiscal deficit drives inflation higher too. Adding 1-1.5 million foreigners to Canada in 2023 is highly inflationary as rents and home prices move higher which pushes wages/salaries higher. All this to say, I think Canada is in a real bind here and I wouldn't want to be in Tiff Macklem's shoes.
Is the current policy rate sufficient to handle further prices increases? Possibly, but if he acts too late inflation could easily spike higher and a 1981 hiking cycle begins to unfold all over again. With all the points I mentioned above regarding immigration, weak $CAD and a large fiscal deficits, Canada is still running too hot and the current Policy rate may not be enough. It certainly doesn't appear that way in the housing market in Toronto as multiple bid offers on homes are back in style.