Interest Rates to Be Held at Their Current Level
November 18, 2009
At the end of October the Bank of Canada announced it was to protect interest rates at the current rate of 0.25%. Many professionals approve of the Bank of Canada’s judgment.
The figure has been maintained at record lows for half a year now and the Bank wants to keep it fixed at least till June 2010. As any real estate agent would tell you, low interest rates are the key instrument for the real estate market rebound and still fuel the solid number of sales realtors are encountering all around Canada.
Interest rate rises are being called for by certain bodies. While we are seeing a huge bubble forming around the world this is making individuals decidedly nervous. Many feel the best way to stop the bubble before it blows is to raise interest rates. Regardless of rising prices and a more rapid pace in the real estate business, most of the experts say it is not the time to raise rates.
Canada’s overall economic performance did not follow the BoC’s predictions of a 2% rise for the third quarter of 2009 and this is why most professionals do not believe an interest rise should occur. Moreover, the trade deficit is at a record high, what shows a more difficult recovery for domestic industry.
The use of leverage, which is a means of using debt to increase investment, is still low and there are no signs of it rising. There is more confidence around due to inflation running at approximately -1%. Lastly the housing market has stayed fairly steady without the massive fall that has been expected by all. Housing passing through realtors office’s remain regular and prices are rising. A backlog of properties that are now selling are causing an increase in prices as properties are more and more in demand.
It is very doubtful that the BoC will backtrack on its commitment to keep interest rates low till at least June 2010. This means good news to any probable condo buyer.
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
Comments
Got something to say?