Toronto, Canada, May 12, 2015 – Canadalend.com , the leading low-cost, private mortgage solution provider in the country, is weighing in on the state of the Canadian real estate market and the Bank of Canada’s decision to keep its key lending rate at 0.75%.
With the spring home-buying season in full swing, the Canadian real estate market is expected to remain hot. According to the most recent data, the national average price for homes sold in Canada reached a record high of $439,114 in March. That represents a year-over-year increase of 9.4%. (Source: “Canadian Home Sales Climb in March,” The Canadian Real Estate Association web site, April 15, 2015; http://creastats.crea.ca/natl/index.htm.)
“While certainly robust, the Canadian housing market data continues to be skewed by activity in Greater Toronto and Greater Vancouver. Excluding these two areas, the average price gain falls to just 2.4% or $332,711,” says Bob Aggarwal, president of Canadalend.com. “In fact, housing prices dipped in six provinces. On top of that, supply and demand remain well balanced across the majority of Canada’s housing market.”
Aggarwal explains that the Bank of Canada has kept its overnight lending rate, which impacts short-term borrowing costs, at 1.0% since 2010; but rates have been near historical lows since early 2008. Stephen Poloz, chairman of the central bank, surprised the markets in January when he lowered the rate to 0.75% to combat the negative effects of falling oil prices. Depending on how the Canadian economy performs, the Bank of Canada could lower its overnight lending rate even further.
The Bank of Canada’s decision to keep its key lending rate at 0.75% will have the desired effect of keeping mortgage rates low and housing more affordable. While many have been trying to speculate when interest rates will begin to climb, Poloz says Canadians can expect borrowing costs to remain low for some time. (Source: “Stephen Poloz says low interest rates may be here to stay,” CBCNews web site, April 25, 2015; www.cbc.ca/news/business/stephen-poloz-says-low-interest-rates-may-be-here-to-stay-1.2621662.)
“What this means is mortgage rates could remain below pre-recession levels even after the Canadian economy returns to full capacity,” Aggarwal concludes.
Canadalend.com is one of the largest, most trusted private mortgage brokers in Canada, with skilled independent, licensed professionals helping Canadians coast-to-coast. Canadalend.com provides its clients with residential and commercial mortgages , home equity credit, debt consolidation, and addressing financing concerns. To learn more about Canadalend.com, visit the web site atwww.Canadalend.com .