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Bank of Canada maintains overnight rate target at 1 ¾ percent

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Published: 24 January 2020

keep pricesThe Bank of Canada today maintained its target for the overnight rate at 1 ¾ percent. The Bank Rate is correspondingly 2 percent and the deposit rate is 1 ½ percent.

The global economy is showing signs of stabilization, and some recent trade developments have been positive. However, there remains a high degree of uncertainty and geopolitical tensions have re-emerged, with tragic consequences. The Canadian economy has been resilient but indicators since the October Monetary Policy Report(MPR) have been mixed.

Read more: Bank of Canada maintains overnight rate target at 1 ¾ percent

Listings Fall Again to End 2019, Pushing Prices Higher

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Published: 15 January 2020

for saleCanadian Real Estate Association data show that national-level home sales fell 0.9% (sa m/m) in December 2019 after rising in the previous nine months. Limited availability looks to be increasingly weighing on sales activity. The month saw another broad-based decline in new listings—18 of the 31 centres for which we have data witnessed falls—that lifted the national sales-to-new listings ratio to 66.9%. It was the highest ratio since 2004 and a third straight month of supply- demand conditions tilted in favour of sellers (after data revisions). Fourteen cities reported sellers’ market conditions; the rest were balanced. The aggregate MLS Home Price Index (HPI) rose 3.4% (nsa y/y), its best gain since March 2018.

Read more: Listings Fall Again to End 2019, Pushing Prices Higher

Story in 2018 and early 2019 was weak sales; story in 2020 will be lack of supply

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Published: 08 January 2020

short supplyThe Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations this year and for 2020.

Evidence suggests housing activity will continue to improve into 2020, with prices either continuing to rise or accelerating in many parts of Canada. Indeed, many housing market indicators continue to support this outlook.

Read more: Story in 2018 and early 2019 was weak sales; story in 2020 will be lack of supply

Housing market has momentum heading into 2020

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Published: 23 December 2019

momentumThe national HPI increase in November is atypical at this time of the year, as it dropped seven times in that month over the last ten years. Furthermore, the two index monthly drops among the 11 metropolitan areas comprised in the national HPI constitute the lowest diffusion of declines in November over the last decade. If we add 14 other metropolitan areas not comprised in the national index, we have seven index drops last month, which is also the lowest diffusion of declines for a month of November over the decade.

Read more: Housing market has momentum heading into 2020

Bank of Canada maintains overnight rate target at 1 ¾ percent

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Published: 04 December 2019

maintainThe Bank of Canada today maintained its target for the overnight rate at 1 ¾ percent. The Bank Rate is correspondingly 2 percent and the deposit rate is 1 ½ percent.

The Bank’s October projection for global economic growth appears to be intact. There is nascent evidence that the global economy is stabilizing, with growth still expected to edge higher over the next couple of years. Financial markets have been supported by central bank actions and waning recession concerns, while being buffeted by news on the trade front. Indeed, ongoing trade conflicts and related uncertainty are still weighing on global economic activity, and remain the biggest source of risk to the outlook. In this context, commodity prices and the Canadian dollar have remained relatively stable.

Read more: Bank of Canada maintains overnight rate target at 1 ¾ percent

Gross domestic product, income and expenditure, third quarter 2019

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Published: 29 November 2019

income and expenseReal gross domestic product (GDP) grew 0.3%, following a 0.9% increase in the second quarter. Third quarter growth was led by higher business investment and increased household spending, boosting final domestic demand by 0.8%.

Expressed at an annualized rate, real GDP advanced 1.3% in the third quarter. In comparison, real GDP in the United States grew 1.9%.

Business investment rose 2.6% in the third quarter, the fastest pace since the fourth quarter of 2017. Growth in household spending accelerated to 0.4%, after rising 0.1% in the second quarter. These increases were moderated by a 0.4% decline in exports, while imports were flat.

Read more: Gross domestic product, income and expenditure, third quarter 2019

Unemployment rate unchanged in October

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Published: 12 November 2019

unemploymentFollowing two consecutive months of growth, employment held steady in October. The unemployment rate was unchanged at 5.5%.

On a year-over-year basis, employment grew by 443,000 or 2.4%, driven by gains in full-time work. Over the same period, total hours worked were up 1.3%.

In October, employment increased in British Columbia and Newfoundland and Labrador, and was little changed in the other provinces.

Employment was down for men in the core working ages of 25 to 54, and grew for the population aged 55 and over.

Read more: Unemployment rate unchanged in October

Canada: Household Credit Growth Continues To Climb in September

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Published: 29 October 2019

mortgageCANADIANS BORROWING HAND OVER FIST

Total Canadian household credit growth continued to accelerate in September, reaching a pace last seen in mid-2018. Despite a slight deceleration from the previous month to 4.3% at a seasonally adjusted annualized rate (m/m saar), trend growth remains at elevated levels. Both mortgage and consumer credit growth contributed to the 68 bps slowdown from the prior month (46 bps and 22 bps, respectively), but borrowing conditions remain favourable overall with trend growth still in strongly positive territory.

Read more: Canada: Household Credit Growth Continues To Climb in September

National house price index rises again in August

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Published: 02 October 2019

price indexThe national HPI has grown at a below-inflation rate of 0.6% over the last 12 months. However, the weakness is not regionally broad-based. The national HPI has been depressed by 12 consecutive months without a rise in Vancouver’s index, which dropped a cumulative 6.6%. Other Western metropolitan areas (Victoria, Calgary, Edmonton, and Winnipeg) also contributed to slow the national HPI. At the opposite, annual growth has been decent in most of the regions located in the central and eastern part of the country. That being said, home sales in August were up 55% from March in Vancouver, where market conditions went from “favorable to buyers” to “balanced”. Over that period, home sales rose 19% in Calgary and 12% in Edmonton. These improvements, if sustained, will sooner or later help limit home-price deflation in this region.

Read more: National house price index rises again in August

CREA Updates Resale Housing Market Forecast

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Published: 18 September 2019

ewale houseThe Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations – for the rest of 2019 and looking ahead to 2020.

Economic fundamentals underpinning housing activity remain strong outside of the Prairies and Newfoundland and Labrador. Population and employment growth have both remained supportive and the unemployment rate remains low. At the same time, expectations have become widespread that the Bank of Canada is unlikely to raise interest rates over the rest of the year and into next.

Read more: CREA Updates Resale Housing Market Forecast

  1. First-Time Home Buyer Incentive now available
  2. Consumer Price Index climbs in July
  3. Home price deflation about to ebb in Western Canada?
  4. Almost no annual growth for national HPI

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