How the Bank of Canada rate hold 2025 affects Edmonton home buyers and sellers

The Bank of Canada rate hold 2025 announcement kept the policy rate at 2.25%, exactly as experts expected. But what does this rate hold really mean for buyers, sellers, and anyone navigating the Edmonton real estate market heading into 2026?

Back in October, the Bank said 2.25% was “about the right level” unless something big changed in the economy. Nothing big did. In fact, some numbers came in stronger than expected.

Let’s walk through it together in plain language.

Canada’s Economy Looks “OK” on Paper … But It Doesn’t Always Feel That Way

We’ve had a lot of dramatic headlines over the last few years, but overall, the economy has held up better than many expected. Jobs have been decent. GDP bounced back after a soft second quarter. And Q3 GDP came in at 2.6%, which was far above the Bank’s earlier forecast.

But here’s the important part – and something most Canadians don’t realize:

That GDP “growth” isn’t really a sign of a booming economy.

A few things are happening behind the scenes:

1. Population growth is inflating the numbers

Canada’s population has surged, and when you add more people, total GDP naturally rises.
But when you divide GDP by the number of people?

GDP per person is actually falling, which is why Canadians don’t feel richer.

2. Q3 growth came from a drop in imports

When imports fall, GDP automatically rises – even if households aren’t spending more.
This creates a headline number that looks strong, even though the underlying demand isn’t.

3. Productivity is struggling

Canadians aren’t producing more per hour, which limits wage growth, innovation and long-term economic health.

This is why the economy can look like it’s “growing,” but still feel tight for everyday Canadians.

Inflation: Not High, Not Low — Just a Little Stubborn

Inflation has eased significantly from the highs of the last few years, but core inflation (the trend measure the Bank cares most about) is still sitting around 2.5%.

This is inside the Bank’s target range of 1-3%, but still slightly above the ideal 2%.

For the Bank, this means:
hold steady, stay patient, and avoid making any sudden moves.

Why the Bank Is Keeping Rates Right Where They Are

The Bank of Canada’s message was simple:

“If everything continues on this path, 2.25% is the right rate.”

The economy isn’t booming, but it’s not cracking either. Inflation is easing but not fully anchored. So this is the moment where the Bank steps back and lets the dust settle.

Bond markets reacted instantly – 5-year yields jumped after the latest job numbers – and this could influence fixed mortgage rates in the near term.

Monetary Policy Has Hit Its Limits

A big theme in the announcement was the Bank acknowledging that interest rates can’t fix everything.

Trade disruptions and supply challenges can’t be solved with monetary policy. Interest rates influence demand, not supply.

In other words:

They can cool the economy, but they can’t rebuild supply chains, restore lost capacity, or raise productivity.

This is where other policy tools – government investment, infrastructure, and competitiveness measures need to take over.

How We Got Here: A Quick Recap

2022 – 2024: The Bank raised rates from 0.25% to 5% to fight inflation.
As inflation cooled, they gradually began cutting.
Late 2025: The rate landed at 2.25%, which the Bank now considers “about right” for current economic conditions.

After years of dramatic rate swings, we’ve finally landed in a place of relative calm.

What the Bank of Canada Rate Hold 2025 Means for Edmonton Buyers & Sellers

Buyers

A holding pattern is good news.

Stability means:

more predictable mortgage rates
more confidence when planning a purchase
fewer surprises during pre-approval
a smoother overall buying experience

Many buyers who were in “wait-and-see” mode often re-enter the market when things stop shifting dramatically. Expect to see that early in 2026.

Sellers

Whenever the rate environment calms, buyers start to feel safer, and that directly benefits sellers.

You’ll typically see:

more showings
stronger offers
fewer conditions
less hesitation from buyers

Predictability is one of the best ingredients for a healthy real estate market. This Bank of Canada rate hold 2025 environment gives both buyers and sellers a clearer path forward as we move into the new year.

Investors

A “steady but not falling” rate environment is ideal for investors.
Rents remain strong, cash flow remains predictable, and Edmonton stays one of the most stable and affordable markets in the country.

Where We Go From Here

With the Bank of Canada rate hold 2025, we’re entering a much more stable and predictable environment after several years of volatility. That stability is exactly what our real estate market needs heading into 2026.

If you’re thinking about buying, selling, or investing in Edmonton in the year ahead, now is the time to start planning. The wild rate swings of the past few years are behind us, and we’re finally entering a more balanced, predictable environment.