Back in January of this year, the Bank of Canada announced that it would be keeping its key policy interest rate where it's been for more than two years – at one percent. This is positive news for would-be buyers in today's real estate market, especially in the midst of our active real estate season.
While the continued low interest rates may partially reflect a not-so-positive recognition that Canadian economic growth slowed more abruptly in the second half of 2012 than was previously anticipated, it is a silver lining for both first-time buyers contemplating buying real estate and current homeowners thinking about moving up in the market. What it is not, encouragingly, is a signal that the housing market is in trouble. In fact, Gregory Klump, Chief Economist with CREA, says history supports the notion that some sort of major event is needed to create a housing market collapse.
"In the late 1980s, it was a case of a spike in interest rates, in late 2008 and early 2009 it was a massive layoff," said Mr. Klump. "You need a massive and extended economic shock and none of that is in the forecast."
Of course, nobody definitively knows which direction our real estate market is heading towards, but these things are certain: there will always be movement in the real estate market, and real estate conditions can vary substantially from area to area.
Please call today for a personal, no-obligation review of your own housing plans!