BOC raised the overnight rate to 1% and essentially announced that it’s unlikely to raise again soon. The housing market is stalling despite ongoing ‘exceptional stimulus’. There is a greatly depleted pool of qualified buyers, a decreased appetite for taking on more debt, and, quiet possibly, a suddenly satiated lust for RE. In the sterile and barren Olympic village, buyers are completely absent, and some owners are trying to back out of contracts. The Vancouver market does not need a raising of rates to tank, but if the long-end does rise, it’ll speed the decline. -vreaa
Bank of Canada increases overnight rate target to 1 per cent [bankofcanada.ca 8 Sep 2010] – Excerpts: “Economic activity in Canada was slightly softer in the second quarter than the Bank had expected. … The Bank now expects the economic recovery in Canada to be slightly more gradual than it had projected in July. … Financial conditions in Canada have tightened modestly but remain exceptionally stimulative. … Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.” [In other words, they're not foreseeing any more increases at this point. -ed.]
Save? We’re barely off all-time highs
…as in “save the housing market from coming descent.”
It’s a prediction, not a commentary.
Their comments are similar to the last time they hiked rates. I don’t know much about it but it almost looks like they want a crash.
Carney is on crack. This needs to be the last rate hike for sometime.
This had better be just the beginning for rate hikes…RE needs to come back down to earth in order for the rest of the economy to work…you can’t have the entire population investing their life earnings in their home and still expect enough money to be left for business to flourish as well.
Besides…if interest rates don’t go up, then the interst paid on savings won’t go up either…if saving money isn’t earning you anything then you will be less likely to save…I think the gov wants Canadians to start saving, don’t they?