High Rates Impacting Market, but Population Growth Will Soon Spur Demand
While high interest rates are affecting the market, the upcoming population growth is expected to stimulate demand for housing. Explore TRREB’s most recent Market Watch Report for the latest market statistics and more! https://www.trrebwire.ca/index.php/2023/10/04/high-rates-impacting-market-but-population-growth-will-soon-spur-demand/ …
70% chance of a soft landing, former Bank of Canada governor says
A former deputy governor of the Bank of Canada says the central bank’s aggressive rate hikes have effectively slowed the economy, making a soft landing likely, though he cautions that outcome is not guaranteed. Canadian inflation accelerated to four per cent in August year-over-year primarily due to higher oil prices. Should the trend of sticky inflation continue, the chance for a soft economic landing will become less probable, Paul Beaudry, former deputy governor of the Bank of Canada, told BNN Bloomberg in a television interview on Monday. “I would only say there’s a 60 to 70 per cent chance of a soft …
Canada housing market slowdown likely to last for a prolonged period – analyst
The Bank of Canada’s rate hikes played a major role in the market’s significant deceleration Taking the Canadian economy’s likely trajectory into account, the housing market’s sluggishness will almost certainly persist for the foreseeable future, according to Dawn Desjardins, chief economist at Deloitte Canada. “I think we’re seeing the impact of higher interest rates on the economy, especially during the second quarter,” Desjardins said in an interview with the Financial Post. “We did see a decline in GDP output – a very small decline, but nonetheless, much leaner than what we saw in the first quarter of the year.” Desjardins …
Canadian economy remains largely flat in August
Marginal growth reduces prospect of further rate hikes The national economy posted growth of just 0.1% in August despite rebounding slightly, a sluggish performance that strengthens the case for the Bank of Canada to maintain its pause on interest rate hikes. The latest gross domestic product (GDP) figures, released by Statistics Canada on Friday, showed little change from a flat reading the previous month in a sign that the economy continues to soften largely in line with central bank expectations. The wholesale and finance sectors registered stronger performances on a monthly basis in August, although that was offset in …
Will the Bank of Canada continue to hike rates after 2023?
The Bank of Canada’s rate hikes have likely reached their stopping point this year, according to Earl Davis, head of fixed income and money markets at BMO Global Asset Management. This is mainly because the hikes over the past year and a half have yet to take full root in the Canadian economy. “We don’t foresee any hikes in 2024,” Davis said in an interview with BNN Bloomberg. “That speaks to the lag – give it a little bit of time to see the lag.” At the same time, while Davis maintained that “2023 is the end of hikes,” …
The bad economic times have only just started
A strike by port workers in British Columbia slowed economic activity in July. PHOTO: (DARRYL DYCK/THE CANADIAN PRESS) Is Canada already in a recession? We should get a good indication this week. The Canadian economy is headed for a rough patch. Growth has already slowed considerably. Job growth has moderated. Inflation remains stubbornly high. But the pain households are feeling today is only going to get worse. The path forward looks bleak, Tiago Figueiredo, a macro strategy associate with Desjardins, said in a note. For a while there, the economy proved more resilient than expected. The Bank of Canada’s …
Rental market becoming competitive amid rising interest rates
Economist notes population growth plays key role in housing market The Canadian rental market is becoming increasingly competitive with high interest rates and rising inflation continuing to deter buyers, it has been revealed by Rentals.ca. Increasing demand in the rental market and population growth has fuelled the undersupply of purpose-built rental units, it was suggested in a Canadian Press report. As a result of this mix of factors, renters are growing more frustrated than usual. “It’s definitely been stressful,” said Marissa Giesinger, a 23-year-old Mount Royal University student who, alongside her boyfriend, is looking for an affordable place to …
Which borrowers are hit hardest by the Bank of Canada’s rate hikes?
Amid elevated interest rates, variable-rate mortgage holders are paying thousands of dollars in extra interest compared to those with fixed rates, according to a new analysis by RATESDOTCA. The Bank of Canada’s interest rate hikes over the past year and a half have pushed a significant share of mortgage holders to their limit, the analysis noted. In particular, “more and more variable-rate mortgage holders with fixed monthly payments have reached their trigger rate, the point at which their payments can’t even cover their interest,” RATESDOTCA said. “To accommodate the spike in interest, many lenders are even extending amortization periods …
Analysts: July BoC hike will severely weigh on over-leveraged borrowers
Markets are expecting a 50/50 chance of another increase this month An expected Bank of Canada rate hike this month would add a significant burden on over-leveraged borrowers, according to Kambiz Kazemi, chief investment officer at Validus Risk Management. “The risk we have highlighted a number of times is regarding the leverage of the households,” Kazemi said in an interview with BNN Bloomberg. “If we raise another, in our view, 50 basis points, we’ll be at 80% of triggers on the variable mortgages — so that’s a very high number.” Kazemi said that the current unemployment rate of 5.2%, which …
Another week, another rise in fixed mortgage rates. How high could they go?
The Canadian mortgage market has been completely overtaken by fixed rate hikes for yet another week. Following the recent spike in Government of Canada bond yields, which are used to determine the price of fixed-rate mortgages, mortgage lenders, including the majority of the main banks, proceeded to raise their fixed mortgage rates. Over the past week, a number of major banks, including BMO, CIBC, and RBC, increased their advertised rates by 15 to 40 basis points. One basis point is equal to 1/100th of a percentage point, or 0.01%. Data from MortgageLogic.news shows that shorter 1- and 2-year periods saw …
