Once again, the Bank of Canada announced it would keep the key interest rate at a record-low 0.25 per cent to achieve its inflation target of two per cent.
While the Bank said economic growth in Canada resumed in the third quarter of 2009 and there has been a slightly higher than expected rate of inflation in recent months, it reiterated that the economy is still lagging, particularly due to factors like a strong Canadian dollar and low levels of U.S. demand.
Repeating many of the same projections as its October monetary policy report, the Bank predicted the economy to return to full capacity and reach a two per cent inflation rate in the third quarter of 2011. It forecast the economy to grow by 2.9 per cent in 2010 and 3.5 per cent in 2011.
The next Monetary Policy Report will be released Friday and the next rate announcement will be made March 2.
AS OF TODAY: VARIABLE RATE @ 1.95% (Prime -.30%)
Call John @ (604) 710-1500!
SMART PLANNING NOW WILL SAVE YOU $$$
If you’re currently in a Variable Rate mortgage and are considering converting to a Fixed product… STOP! I may be able to:
- Pay out your penalty.
- Get you a brand new 5 yr+ Product. (If you have 2-3 years left on your mortgage, do you really want to renew your mortgage when rates could potentially be a lot higher in a few years?)
- Get an interest rate that is much lower than the conversion rate within your current mortgage; saving you thousands.
The time to ask these pertinent questions is right now. We are seeing some of the lowest rates in Canadian mortgage history. Why not take advantage of what many are calling the “bottom” of interest rates? I can help you plan your long-term goals while taking advantage of these savings. It’s smart-planning and free to boot! Call now!
Today we saw a rise in the bond market. Some lenders have reacted by raising their Fixed rates, although it seems some are holding off for the time being. What does this mean to you? Enjoy the holiday season, but stay tuned for more information. Anyone on the fence should be contacting me immediately to hold these historically low rates for 120 days. Happy Holidays!
With the Canadian Real Estate Association’s release of November housing numbers Tuesday, talk of a 
bubble is heating up among economists and industry professionals.
The CREA report said existing homes sales in November increased by a whooping 73 per cent compared to a year ago and prices rose almost 20 per cent.
“We’re on the bubble of a bubble,” Bank of Montreal economist Doug Porter told The National Post, sharing his worry about a potential surge of home sales before the central bank raises rates and the new harmonized sales tax is introduced in B.C. and Ontario. “We could see a bit of a buying frenzy coming this spring…followed by a “pop” in 2011?”
But despite continued fears that skyrocketing numbers signal the formation of an asset bubble, some insiders said the dramatic rise is due to how low the market was at this time last year. The number of listings also went up by five per cent from October to November, which is expected to help ease price increases.
“The numbers look huge, but you are coming off such a bad year,” TD Securities economics strategist Millan Mulraine told The Globe and Mail. “You’re seeing big numbers in the recovery, but the pace and momentum has eased. You could definitely say it’s not driving as fast as it was a few months ago.”
Another argument against a bubble came from Genworth Financial Canada president Peter Vukanovich, who told The National Post that because more consumers have been switching into fixed rate mortgage products, they will be less exposed to expected interest rate hikes.
