The Bank of Canada left its main interest rate untouched at 1% Tuesday, while painting a brighter economic outlook and hinting for the first time since last summer that it’s beginning to look for an opportunity to raise borrowing costs.
The decision to stand pat for a 13th consecutive meeting was expected. But after weeks of sunnier rhetoric from Governor Mark Carney amid a strengthening domestic recovery, Bay Street analysts had been debating how far he would go in trying to reshape expectations that he may be on hold until late next year.
The statement on Tuesday’s decision was vague about timing, saying only that it may become necessary to increase rates, but that this would depend on “domestic and global economic developments.” But, just by saying so, Carney is clearly starting to lay the groundwork for rate hikes if the Canadian economy and the global backdrop continue to improve. Significantly, he boosted his 2012 growth forecast for Canada by four tenths of a percentage point, to 2.4%. And though he cut his 2013 forecast by the same amount, to 2.4%, the slack in the economy is now projected to be chewed up in the first half of 2013 instead of in the third quarter of next year, so possibly six months earlier.
“The external headwinds facing Canada have abated somewhat, with the US recovery more resilient and financial conditions more supportive than previously anticipated,” Carney and his rate-setting panel said, adding that the confidence of households and businesses is improving more quickly as a result, and both are driving the recovery. “In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate.”
Never ask anyone who lends money if you can afford a house.
Lenders care about their own money. Not yours. So while you’re thinking about how you’ll manage the cost of a mortgage and all your other living expenses, lenders seek the answer to one single question: How much risk is there that this person will not repay our money on time?
Not that lenders are oppressively picky. The more they lend, the more they make in interest. So there are no high hurdles in deciding who gets a mortgage. Partly, that’s because lenders know they have human nature working for them. If a family is having trouble paying its bills, you can be sure the mortgage will come first.
There are plenty of mortgage affordability calculators online, but they use the lender’s criteria for the most part. So let’s see what we can do to develop some simple rules that will help you understand how well you can manage the cost of owning a home.
Click here for more details from the Globe and Mail.
It’s a title Vancouver is more than happy to relinquish.
Canada’s hottest real estate market is finally cooling off, new sales figures show, much to the relief of those who have grown weary of talk of a West Coast property bubble.
At more than $761,000, the average cost of a Vancouver home is still higher than anywhere, but was 3.1% lower in March than in the same month last year. Sales activity is slower, too, down 22.3% through the first three months of 2012.
But the data from the Canadian Real Estate Association indicates that Toronto’s sizzling market is still gaining momentum, with average prices in the country’s largest city soaring more than 10% last month, to about $504,000.