At the end of October the Bank of Canada reported it was to maintain interest rates at the current amount of 0.25%. Experts acknowledge it is not the time to alter it.
The low figures have already been in operation 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 instrument for the housing market rebound and still fuel the solid number of sales realtors are finding all around Canada.
Interest rate hikes are being demanded by certain individuals. Huge bubbles around the world made bodies cautious. Many feel the best way to stop the bubble before it bursts is to hike interest rates. Many professionals still believe that regardless of higher prices and these bubbles forming it would be a mistake to increase interest rates at this moment in time.
Canada’s overall economic performance did not follow the BoC’s indications of a 2% jump for the third quarter of 2009 and this is why most experts 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.
At this time there is also no signs that leveraging is on the rise, whilst this has its risks, it’s also a sign that the market is more sturdy. There is more optimism around due to inflation running at approximately -1%. The other ingredient, is all this is the property market, which doesn’t seemed to have crashed as anticipated. Properties passing through realtors office’s remain steady and prices are increasing. The prices are following a sharp rise in real demand, which was boxed up during last winter’s slowdown.
It is very doubtful that the BoC will retreat on its promise to keep interest rates low till at least June 2010. Reassuring news for condo purchaser!
