Found 29 blog entries tagged as interest rates.

Toronto Canadian housing market

Has the pendulum in the Canadian housing market tilted toward homebuyers? This is the current debate unfolding among market analysts, real estate agents, homebuyers and sellers.

The research arm of Goldman Sachs recently dropped a bombshell of a forecast: Canadian real estate will witness the sharpest drop in the global economic downturn.

“The pandemic-induced housing boom appears to be cooling off,” the Wall Street titan wrote. “From Toronto to Auckland, a slowdown in the housing market is underway as interest rates in developed economies are set to climb rapidly.”

Indeed, it is a reasonable conversation to have after seeing some of the latest numbers being reported in the Canadian housing market, as the central…

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Most affordable Canadian real estate markets_Saskatoon

Despite recent cooling in Canadian real estate markets due to rising interest rates, the fact remains that housing prices are still hovering at a high, relatively speaking. Add to this the record-high inflation rate, which reached 8.1 per cent in June, up from 7.7 per cent in May, and there’s no arguing that housing affordability in Canada has taken a big hit. While this is particularly true in major markets such as Toronto and Vancouver, as well as their suburbs, there’s still affordable housing to be found in Canada – and Canadians are willing to relocate to find it.

RE/MAX Canada’s 2022 Housing Affordability Report analyzed 24 major housing markets across the country (for Quebec market insights, please visit RE/MAX…

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Bank of Canada Interest Rate Announcement: Supersized Rate Hike of 100 Basis Points on July 13

The Bank of Canada was widely expected to make an increase in this morning’s interest rate announcement, but the central bank surprised everyone with a supersized hike of 100 basis points, bringing its target for the overnight rate up to 2.5 per cent. This is the Bank’s biggest move since 1998, and the fourth in a series of increases expected for 2022 as the Bank tries to tamp down the soaring inflation rate. Inflation is expected to hover around eight per cent for the next few months – well above the Bank’s two-per-cent target.

  1. What is the Bank of Canada’s current policy interest rate?
  2. When does the Bank of Canada announce its overnight rate?

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Canadians have enjoyed low interest rates for the last decade, but even more so since the onset of the global pandemic, when the Bank of Canada responded with a trio of rate cuts, bringing us to 0.25%. But 2022 has already seen three interest rate hikes in response to soaring inflation rates, which reached a 39-year high in May, at 7.7 per cent. With a fourth increase in the Bank’s interest rate, you may be wondering: How will higher interest rates affect me?

What does an interest rate hike mean if you’re planning to buy a home, if you already have a mortgage, or are carrying any other debt? Let’s take a step back to better understand what causes movement in interest rates and how a higher rate might impact you.

What Causes Interest Rates to…

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what is a housing bubble

What is a housing bubble? You’ve undoubtedly heard the term, but what does it actually mean, and is Canada experiencing one? Whether you already own a home, are considering buying one in the near future, or you’re waiting for the right time to sell, here we answer what is a housing bubble, what causes it, and how it may affect you.

What is a Housing Bubble?

A housing bubble happens when the price of homes rises quickly, at an unsustainable rate. Typically, a price-growth rate that’s in the high single-digits is considered to be healthy and sustainable. Under healthy conditions, homeowners continue to earn equity over time, sellers can make a profit on resale, and buyers can still afford to get into the market. This type…

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In recent months, officials at all three levels of government have been scrambling to increase affordability in the Canadian real estate market, with municipal, provincial and federal housing proposals ranging from new or higher tax rates to more tax credits.

During the last general election, all of the federal party leaders put forward their ideas to improve the housing sector and ensure more Canadians can purchase a home, be it a single-family home, townhouse or condominium unit, without breaking their budgets to do so. But now that it appears Prime Minister Justin Trudeau and his Liberal government will remain in power for another three years, the Grits are beginning to tackle this national issue. What federal housing proposals will actually…

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Rising interest rates and housing market

The Bank of Canada (BoC) has said it will be use its monetary policy to tamp down inflation, which currently sits at a 30-year high, joining the chorus of central banks worldwide trying to grapple with the rapidly escalating cost of living. So far this year, the BoC has already moved forward with rising interest rates three times, and Governor Tiff Macklem is preparing the financial market for more quantitative tightening in upcoming policy meetings.

But while the objective is to garner a stranglehold on a surging consumer price index (CPI) and producer price index (PPI), rate hikes will lead to financial pain for borrowers, investors and homebuyers.

Indeed, the Canadian real estate market is seeing the effects of a…

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The Canadian housing market hasn’t seen a home sales situation like this since the summer of 2020.

National home sales dropped by 12.6% between March and April and actual (not seasonally adjusted) sales activity was down 25.7% from the record highs we saw in April 2021, according to the Canadian Real Estate Association (CREA).

Sales were down in 80% of Canadian markets in April 2022, save for Montreal, Halifax-Dartmouth and Victoria, B.C.

Why are home sales down?

“Housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” said Jill Oudil, Chair of CREA. “For buyers, this slowdown could mean more time to consider options in the market. For…

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Bank of Canada Interest Rate Announcement Raises It Another 0.5% on June 1

This morning’s interest rate announcement by the Bank of Canada reveals another 50-basis-point hike to the key rate, bringing it up to 1.5 per cent. This is the third in a series of increases expected in 2022, with the year kicking off at a low of 0.25 per cent, followed by a 0.25-per-cent bump in March and another 0.5-per-cent increase in April. Today’s increase makes the second time in the last 25 years that the Bank has implemented back-to-back increases of 50 basis points. The move appears to be having a cooling effect on hot Canadian housing markets, with Toronto and Vancouver sowing some signs of cooling. The Bank said it will use its monetary policy tools to ease…

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private lenders

Some prospective homebuyers are turning to private mortgages in this red-hot Canadian real estate market. A private mortgage is a home mortgage from a private individual or company that is not a federally regulated financial institution. In an environment of historically low-interest rates and strengthening demand for limited residential properties, Canada’s private mortgage lending market is thriving amid tighter federal rules and regulations. Private lenders will argue that the current rules are too conservative and could leave too many people on the sidelines, especially when prices are growing at exponential levels.

Statistics Canada data show that non-bank residential mortgages rose to approximately $339 billion as of…

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