Interest Rates to Be Held at Their Current Level
The current level of interest rates is to remain at 0.25% after the last rate disclosure in October by the Bank of Canada. This verdict was exactly what experts conclude to be the way forward for Canada.
The low rates have already been in force for 6 months and the bank want to keep it for another 8 months at least. As any real estate agent would tell you, low interest rates are the key element for the real estate market rebound and still fuel the solid number of sales realtors are finding all around Canada.
Unluckily there is always a few that call for interest rate raises. While we are seeing a huge bubble forming around the world this is making some people decidedly edgy. Many feel the best way to stop the bubble before it explodes is to increase interest rates. Taking this into account, even with increasing prices in the housing market and faster turnover, the experts still agree that the Bank of Canada has made the correct decision.
The most decisive reason is the tangible growth of the GDP, which doesn’t seem to be following the BoC forecast of a 2% rise in the third quarter of 2009 (August growth was -0.1%). Moreover, the trade deficit is at a record high, what shows a more arduous recovery for domestic industry.
At this time there is also no indicators that leveraging is on the up, whilst this has its risks, it’s also a sign that the market is more sturdy. There is more calmness around due to inflation running at roughly -1%. Finally, the anticipated housing market crash doesn’t seem to be in evidence. Properties passing through realtors office’s remain regular and prices are growing. The prices are following a sharp growth in real demand, which was boxed up during last winter’s slowdown.
Whilst there are never any guarantees it is fairly positive that the BoC will fulfil its promise to keep the interest rates low for a good few months yet. At least now the home buyer can feel positive in purchasing their new property.