Interest Rates to Be Held at Their Current Level
The present level of interest rates is to remain at 0.25% after the last rate publication in October by the Bank of Canada. This decision was exactly what professionals conclude to be the way forward for Canada.
The level has been held 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, one of the major ingredients as to why the Canadian property market has seen a good rebound from the recession, is the attractiveness of these low interest rates, which is allowing buyers to buy properties.
Unluckily there is always a few that demand interest rate increases. While we are seeing a huge bubble forming around the world this is making individuals decidedly uncomfortable. By increasing the rates of interest, many think this will stop the bubble from erupting. Although there are rising prices and a quicker pace in the real estate market, most of the experts say it is not the time to raise rates.
Canada’s overall economic performance did not follow the BoC’s indications of a 2% increase for the third quarter of 2009 and this is why most professionals do not believe an interest rise should occur. Furthermore, the trade deficit is at a record high, what shows a more laborious recovery for domestic industry.
At this time there is also no signs that leveraging is on the up, whilst this has its risks, it’s also a sign that the market is more secure. Inflation is close to -1%, leaving all worries behind for the present. Lastly, the expected real estate market crash doesn’t seem to be in evidence. Properties passing through realtors office’s remain regular and prices are increasing. With the real estate downturn last winter there was a hoard of properties which are now selling, as the demand is larger so the prices rise.
It is very doubtful that the BoC will go back on on its promise to keep interest rates low till at least June 2010. At least now the home buyer can feel assured in purchasing their new property.
Filed under: Real Estate News