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Bank of Canada raises overnight rate target to 1.5 percent

by Manoj Kumar Arora

Bank of Canada raises overnight rate target to 1.5 percent

The Bank of Canada today increased its target for the overnight rate to 1 ½ per cent. The Bank Rate is correspondingly 1 ¾ per cent and the deposit rate is 1 ¼ per cent.

The Bank expects the global economy to grow by about 3 ¾ per cent in 2018 and 3 ½ per cent in 2019, in line with the April Monetary Policy Report (MPR). The US economy is proving stronger than expected, reinforcing market expectations of higher policy rates and pushing up the US dollar. This is contributing to financial stresses in some emerging market economies. Meanwhile, oil prices have risen. Yet, the Canadian dollar is lower, reflecting broad-based US dollar strength and concerns about trade actions. The possibility of more trade protectionism is the most important threat to global prospects.

Canada’s economy continues to operate close to its capacity and the composition of growth is shifting. Temporary factors are causing volatility in quarterly growth rates: the Bank projects a pick-up to 2.8 per cent in the second quarter and a moderation to 1.5 per cent in the third. Household spending is being dampened by higher Interest rates and tighter Mortgage lending guidelines. Recent data suggest housing markets are beginning to stabilize following a weak start to 2018. Meanwhile, exports are being buoyed by strong global demand and higher commodity prices. Business investment is growing in response to solid demand growth and capacity pressures, although trade tensions are weighing on investment in some sectors. Overall, the Bank still expects average growth of close to 2 per cent over 2018-2020.

READ THE COMPLETE BANK OF CANADA REPORT HERE

The Bank of Canada maintained its target for the overnight rate at 1 per cent.

by Manoj Kumar Arora

The Bank of Canada maintained its target for the overnight rate at 1 %

The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economy is evolving largely as expected in the Bank’s October Monetary Policy Report (MPR). In the United States, growth in the third quarter was stronger than forecast but is still expected to moderate in the months ahead. Growth has firmed in other advanced economies. Meanwhile, oil prices have moved higher and financial conditions have eased. The global outlook remains subject to considerable uncertainty, notably about geopolitical developments and trade policies.

Recent Canadian data are in line with October’s outlook, which was for growth to moderate while remaining above potential in the second half of 2017. Employment growth has been very strong and wages have shown some improvement, supporting robust consumer spending in the third quarter. Business investment continued to contribute to growth after a strong first half, and public infrastructure spending is becoming more evident in the data. Following exceptionally strong growth earlier in 2017, exports declined by more than was expected in the third quarter. However,  the latest trade data support the MPR projection that export growth will resume as foreign demand strengthens. Housing has continued to moderate, as expected.

Read the complete press release at Bank of Canada's Website

37% increase in new MLS Homes Listings in November 2017 resulted in 2% year over year drop in Real Estate Prices in Greater Toronto Area (GTA) 

TORONTO, ONTARIO, December 5, 2017 – Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 7,374 transactions through TREB’s MLS® System in November 2017. This result was up compared to October 2017, bucking the regular seasonal trend. On a year-over-year basis, sales were down by 13.3 per cent compared to November 2016.

New listings entered into TREB’s MLS® System in November 2017 amounted to 14,349 – up by 37.2 per cent compared to November 2016, when the supply of listings was very low from a historic perspective.

“We have seen an uptick in demand for ownership housing in the GTA this fall, over and above the regular seasonal trend. Similar to the Greater Vancouver experience, the impact of the Ontario Fair Housing Plan and particularly the foreign buyer tax may be starting to wane. On top of this, it is also possible that the upcoming changes to Mortgage lending guidelines, which come into effect in January, have prompted some households to speed up their home buying decision,” said Mr. Syrianos.

The MLS® Home Price Index (HPI) composite benchmark price was up by 8.4 per cent on a yearover-year basis in November 2017. The average Selling price for all home types combined was down by two per cent compared to November 2016, due in large part to a smaller share of detached home sales versus last year. On a year-to-date basis, the average selling price was up by 13.4 per cent compared to the same period last year. High density home types continued to lead the way in terms of price growth, with the average condominium apartment price up by doubledigits compared to November 2016.

“Changes in market conditions have not been uniform across market segments. In line with insights from consumer polling undertaken by Ipsos in the spring, we are still seeing seller’s market conditions for townhouses and condominium apartments in many neighbourhoods versus more balanced market conditions for detached and semi-detached houses. We will have more insights to share about consumer intentions for 2018 at the end of January when TREB releases its third annual Market Year in Review and Outlook report,” said Jason Mercer, TREB’s Director of Market Analysis.

Read the Complete Market Watch Report Here

  

 

 

The New Mortgage Rules can reduce your borrowing power by 20 - 25%. Act Now before it is too late!!

If you are looking to refinance or buy a home with 20% down, WATCH this video! Chris Turcotte, President & COO dives into the regulation change that happened yesterday and the impact it will have on you!

This regulation change can REDUCE your buying power but any contracts that are done before January 1, 2018, will be grandfathered in! Reach out to your CENTUM Mortgage Professional today if you have any questions or want to get a mortgage or refinance before the changes come into effect.

Visit www.centum.ca/Manoj_arora or call me now at 416.618.9753.

Bank of Canada increases overnight rate target to 1 per cent

by Manoj Kumar Arora

Bank of Canada increases overnight rate target to 1 per cent

The Bank of Canada is raising its target for the overnight rate to 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

Recent economic data have been stronger than expected, supporting the Bank’s view that growth in Canada is becoming more broadly-based and self-sustaining. Consumer spending remains robust, underpinned by continued solid employment and income growth.  There has also been more widespread strength in business investment and in exports. Meanwhile, the housing sector appears to be cooling in some markets in response to recent changes in tax and housing finance policies. The Bank continues to expect a moderation in the pace of economic growth in the second half of 2017, for the reasons described in the July Monetary Policy Report (MPR), but the level of GDP is now higher than the Bank had expected.

Read the complete report at Bank of Canada's Website

 

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Photo of Manoj Kumar Arora, Broker of Record Real Estate
Manoj Kumar Arora, Broker of Record
Ace Team Realty Inc., Brokerage
77 City Centre Drive, East Tower, Suite 501
Mississauga ON L5B 1M5
905-488-3101
1-888-355-3155
Fax: 1-888-443-3155

Contact Information

Photo of Manoj Kumar Arora, Broker of Record Real Estate
Manoj Kumar Arora, Broker of Record
Ace Team Realty Inc., Brokerage
77 City Centre Drive, East Tower, Suite 501
Mississauga ON L5B 1M5
905-488-3101
1-888-355-3155
Fax: 1-888-443-3155