Mark Carney to raise the Bank of Canada interest rate?
Not anytime soon thinks Francis Fong of TD Bank. The economist then referenced a stat by CAAMP, who estimated one in five mortgage holders would be in serious trouble with a key interest rate of 3.00% (the current rate is 1.00%). The key interest rate drives the prime rate which is important to variable rate mortgage holders (the current prime rate is 3.00%). Mr. Fong believes Mark Carney has no intention of raising rates to that level anytime soon. However, TD does anticipate a small Bank of Canada interest rate hike, likely 25 to 50 basis points before the end of the year. Though the central bank will likely tread softly until the Eurozone and US economies regain their momentum. It’s not until the end of 2013 that TD forecasts the Bank of Canada moving the key interest rate to 2.0%.
Toronto Housing Market
According to an article by Troymedia, the measures of supply and demand do not indicate over-supply in the Toronto market. The ratio of completed and unoccupied homes to constructions starts actually suggest the inventory of new unsold condo housing in Toronto is normal and declining relative to the level of construction. The article then goes on to state two factors which suggest condo construction in Toronto will remain high: rental vacancy, which is just over 1 per cent, is trending downwards and Toronto mortgage rates which are widely expected to remain low for at least another year.
Where are Canada Mortgage Rates this week?
A 5-year history of weekly 5-year fixed mortgage rates and 5-year variable mortgage rates
Canadian Mortgage Rates 2012
Note: This is simply a small sample size and does not represent the entire market. It does, however, offer some useful insight.
——————————————————————————————————————- The Globe and Mail