Interest Rates

Still no change, the Bank of Canada once again held their key lending rate at 1%. Banks therefore are expected to keep their prime rates at 3%.  
 
Global economic growth has evolved broadly as anticipated (i.e. very slowly).  China and India are moving forward but Europe is still mired in recession. This is expected to continue for another two years.
 
Canada is still experiencing economic growth but this expansion is expected to slow down a little more than previously thought.  We are now not expected to fully recover until mid 2015.  This usually means that rates will remain low until then if I'm picking up what the Bank of Canada is laying down.
 
The Bank of Canada announcement ran on for a few pages but the gist of it all was that Canada is moving forward…

Bank of Canada Governor Mark Carney held the key overnight interest rate steady at 1 per cent on Wednesday, and lowered growth expectations for 2013 citing global and domestic economic challenges.

Carney said Canada's economy experienced more of a slowdown than expected in the second half of 2012, and going forward "economic activity is expected to be more restrained."

 "The Bank now expects the economy to reach full capacity in the second half of 2014, later than anticipated in October," Carney said, reading from the bank's quarterly Monetary Policy Report.

The bank also revised its 2.3 per cent growth estimate for 2013 down to 2 per cent, followed by 2.7 per cent in 2014.

Carney didn't say when the bank expects to raise its

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by Kelsey Hipkin

With strong economic growth expected to continue into 2013, some say Alberta’s recent real estate market “renaissance” is just getting started.

“The Alberta housing market enjoyed an unusual mix of factors in the third quarter: firm and steady resale activity, balanced demand-supply conditions (if marginally tight), moderate home price increases, and attractive and improving affordability,” said an RBC Housing Trends and Affordability report.

When compared to the rest of the country, Alberta is an attractive place to call home as far as affordability is concerned. In Calgary, residents who purchased a standard two-storey home in the third quarter of this year spent 39.3 per cent of their median pre-tax income compared to 61 per cent in

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The Bank of Canada once again held their key lending rate at 1%. Banks therefore are expected to keep their prime rates at 3%. 
 
    •     "Global financial conditions have improved, supported by aggressive policy actions of major central banks, but sentiment remains fragile."
    •    "Total CPI inflation has fallen noticeably below the 2 per cent target...and is projected to return to target by the end of 2013, somewhat later than previously anticipated."
    •    "Housing activity is expected to decline from historically high levels, while the household debt burden is expected to rise further before stabilizing by the end of the projection horizon."
    •    "The timing and degree of any such withdrawal (in rate stimulus) will be weighed carefully against…

Yesterday morning the finance minister had announced that mortgage rules are getting tighter for the 4th time since 2008.

• As of July 9, 2012 no more 30 year amortized mortgages are available for purchasers who are looking at putting down less than 20% of the asking price as a downpayment. In summary, it means that after July 9th, your buying power will be reduced by 11%.
• For those who like to go shopping “on the house” or refinance their existing homes, now they can only take out equity of their home for up to 80% of its market value where before it used to be 85%.
• The maximum debt that anyone can carry during the time when a mortgage gets approved had also been reduced from 45% of their gross income to 44%. This is still 4% higher than what it used to

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The Bank of Canada holds their key lending rate at 1% for the twelfth consecutive meeting. Banks therefore are expected to keep their prime rates at 3%. This was no surprise but there was some indications that future increases will happen sooner than later if things continue to improve in the economy.
 
Here is the rational, Global economic growth has improved since the bank's last monetary report and Europe is expected to emerge slowly from recession in the second half of 2012. Although there are still some significant risks in Europe (ie Spain) the overall outlook remains high.
 
The US is showing some signs of life again based on somewhat improved labour markets and increased consumer confidence. Emerging markets like India and China are still robust but…

The Bank of Canada holds their key lending rate at 1% for the eleventh consecutive meeting. Banks therefore are expected to keep their prime rates at 3%.

The Bank of Canada announced:

    •    The global economy has deteriorated and uncertainty has increased. The recession in Europe is now expected to be deeper and longer than expected.
    •    Very favourable financing conditions are expected to buttress consumer spending and housing activities.
    •    The economy is expected to return to full capacity by the third quarter of 2013.

They are not expecting to increase their prime lending rate at this time.

The Bank of Canada holds their key lending rate at 1% for the tenth consecutive meeting. Banks therefore are expected to keep their prime rates at 3%.
Uncertainty around the global economic outlook has increased. The recession in Europe is worse than they anticipated.
 
US growth was slightly more robust than anticipated however the European crisis is expected to weigh on US growth.
 
Canadian dollar is still strong and the weaker external outlook is expected to dampen GDP growth in Canada.

The Bank of Canada holds their key lending rate at 1% for the eighth consecutive meeting. Banks therefore are expected to keep their prime rates at 3%.
 
The global economic outlook has deteriorated in recent weeks as several downside risks to the projection in the Banks July Monetary Policy Report (MPR) have been realized. The European sovereign debt crisis has intensified, a broad range of data has signalled slower global growth, and financial market volatility has increased sharply. Recent benchmark revisions show that the U.S. recession was deeper and its recovery has been shallower than previously reported. In combination with recent economic data, this implies that U.S. growth will be weaker than previously anticipated. The Bank expects that American…

The Bank of Canada holds their key lending rate at 1%. Banks therefore are expected to keep their prime rates at 3%.
The Bank of Canada's key points:
 
"Global economic recovery is proceesing at a somewhat faster pace than anticipated".
"Stretched household balance sheets are expected to restrain the pace of consumption growth and residential investment."
"With a little more excesss supply in the near term, that Bank continues to expect that the economy will return to full capacity by the end of 2012."