Canadian Real Estate Market ‘Stabilizing’ at National Level: July 2019 Bank of Canada Interest Rate Announcement
The July 2019 Bank of Canada interest rate announcement included a positive mention of the Canadian real estate market:
The Bank of Canada (BOC) sees the Canadian real estate market stabilizing at a national level.
On July 10, 2019, the Bank of Canada announced it is holding the overnight interest rate at 1.75% for another month. The last time the interest rate increased was October of 2018.
The Canadian real estate market has been a factor in the hold decisions between October and now. In May, and now in July, the BOC pointed to signs that the housing market is stabilizing.
However, the BOC was quick to acknowledge in the July 10 announcement that there are still “significant adjustments underway in some regions.”
The BOC went on to state that “A material decline in longer-term mortgage rates is supporting housing activity.”
Consumer spending was also brought up in the BOC’s announcement:
“Following temporary weakness in late 2018 and early 2019, Canada’s economy is returning to growth around potential, as expected,” the BOC stated.
“Growth in the second quarter appears to be stronger than predicted due to some temporary factors, including the reversal of weather-related slowdowns in the first quarter and a surge in oil production. Consumption is being supported by a healthy labour market.”
While the outlook was more positive for the Canadian real estate market and consumer spending, other areas of the July 10, 2019 interest rate announcement were not as optimistic. In particular, trade tension uncertainty factored into the BOC’s decision to hold interest rates again.
The next BOC interest rate announcement is scheduled for September 4, 2019. Whether interest rates increase, decrease, or remain the same again will depend on several factors, including the trade conflicts between the United States and China.
“Recent data show the Canadian economy is returning to potential growth,” the BOC said.
“However, the outlook is clouded by persistent trade tensions. Taken together, the degree of accommodation being provided by the current policy interest rate remains appropriate.”
Read the full July 10, 2019 release here: https://www.bankofcanada.ca/2019/07/fad-press-release-2019-07-10/
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