Bank Of Canada Rates Maintained!

The Bank of Canada announced Wednesday morning it will maintain its target for the overnight rate at 0.5%. “The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent,” the bank writes in a release. “The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.” According to the Bank of Canada, its economic stimulation efforts are “working their way through the Canadian economy.” - Source I had just been speaking with my husband the other day about how I feel strongly that the BoC (Bank of Canada) wouldn't allow for the rates to sink lower. I felt personally that that would put the housing market too much at risk in high population areas where the majority of the public's assets are locked into real estate. Further reducing the rate may further increase the risk of a heavy correction, which would greatly impact the housing market, and those who have bought in the times of greatest inflation and appreciation. With so many people having invested the majority of their money into real estate, it doesn't seem at all fiscally responsible for our government or for the BoC to allow for further risk. At this point, my guess would be that the government will work with BoC to encourage a gentle plateau, allowing for inflation of wages and etc to catch up with the inflation of real estate in the GTA. Raising the interest rate would prevent many from purchasing, also harming the market for those needing to sell, or hoping to sell. If one day Mr. Joe Smith wakes up and finds out that the interest rates have gone up, he may begin to fear for his other investments, the worth of his current home, and plan to save and reduce spending until things are more certain. If even 20% of the populate in the GTA had similar thinking, our economy would surely begin to show signs of tanking. As a result, it only makes sense to me... as a realtor and not as an economist... that the BoC would keep current interest rates where they are; if only to maintain current economic status and encourage slower inflation. Just an opinion... by no means am I an economist!

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