HOME LIFE
RATE CUT ONTHE HORIZON?
hen the Bank of Canada held its influential o, ernigh1 lending rate at 1.75 per cent on July 10 - where it has been since October 2018 - few economists were surprised. After all, the Bank cites, Canada is still dealing with economic weakness from late 2018 and early 2019. Hardly time for a rate hike. "The Bank continues to monitor the Canadian energy sector, as well as the impact of international trade t-onfficts on the global economic outlook," says James Laird, co-founder of Ratehub Inc. and president of Can'Wise Financial mortgage brokerage. ''On a positive note, the Bank is pleased by indications of strong economic growth including a healthy labour market and stabilizing housing market. The Bank recognizes the positive impact that low long�term mortgage rates have had on housing activity." There a1·e other factors besides BoC's overnig:ht e\ebrat; ,, rate that inAuence mortgage rates, but generally Years speaking, Canada's major lenders typically follow ' Rank's lead in raising or lowering rates. 6' theThe announcement was welcome news for Canadians considering a variable rate mortgage, as 1>uo11s1◄1Nc c�ouP BoC has signaled the current interest rate remains appropriate. In the absence of major economic changes, the Bank seems intent to maintain thjs policy in the near future. But should there ha,·e been a decre(l.se on Jul y 10·? And since there wasn't, is one on the horizon for the next rate announcement on Sept. 4? According 10 a report from financial advice organization tinder, assessing BoC's July 10 decision, some Canadian economists thought there should have been a rate cut. The majority (62 per cent) of panelists predict the next. rate change will be a decrease. Stephen Brown, senior economist at Capital Economics, who is among those who says the Bank should have cul the rate in July, foresees a decrease as early as OcL 30 - and possibly a second reduction on Dec. 4. For those looking to secure or renew a mortgag� this is all good news. You now have the peace of mjnd that rates likely won't rise umil nex1 year, and might even decline in 1he next few months. 1
.;'HOMES 34
HOMES Celebrating Our 34th Year - Estab1isbed 19-85 PUBLJSHf:R Miehacl ROS&et. EDITORIAL
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12 mybomepage.ca I HOMES MAGAZINE AUGUST 2019
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!.!U!P!.Sof M<B! ■IUJI;;;;;:::Wayne Karl wayne.karl@homesmag.com Twitter @WayneKarl
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