Archive for the ‘Mortgages’ Category

Liberal Government – How will their policies affect interest rates?

October 21st, 2015 No comments

LiberalGood evening,

Charmaine’s comment:   The prediction is that if there is going to be growth in the economy due to the Liberal Infrastructure program, this could lead to an increase in mortgage interest rates sooner than previously expected.



  • The federal Liberal Party, led by Justin Trudeau, appears likely to have taken 184 seats (54% of the newly expanded house) in last night’s election, a strong gain from the 36 seats (12%) held pre-election; handily passing the 170 seat threshold required for a majority government.
  • In their election platform, the Liberal party promised a revamping of the tax system and increased infrastructure spending, supported by deficits. Highlights include a new Canada Child Benefit, tax reductions targeted at middle income earners, and the creation of a new tax bracket for those earning more than $200K per year.
  • While it is difficult to assess potential impacts with any certainty at this early stage, the Liberal infrastructure program could boost annual growth in 2016 and 2017 by up to 0.1 and 0.3 percentage points, respectively.
  • Markets were noisy overnight, but the Canadian dollar has since recovered relative to yesterday’s close. Over the longer term, there is the potential for upward pressure on longer term yields resulting from increased deficit borrowing, but any impact is likely to be quite small given Canada’s favourable debt position relative to other countries, and the relatively small size of the additional borrowing.

From: Observation – TD Economics Oct 20th, 2015

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October 20th, 2015 Comments off

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Market Commentary

October 20th, 2015 No comments

Markets Up DownThe latest monthly stats on Canadian real estate are out and many market watchers were surprised to see sales dip in September.

Nationally, home sales slipped 2.1% last month compared to August. Year over year though sales continued to increase, edging up 0.7%. Prices also continued their upward march posting a 6.9% increase from September 2014.

The numbers, though, remain a tale of two cities. With Toronto and Vancouver taken out of the calculations prices rose 2.9%. Alberta and Saskatchewan continue to feel the pressure of falling oil prices. While prices were largely flat across the region, Calgary sales plunged 34%.

Overall, the Canadian Real Estate Association is calling the market balanced as reflected by Montreal, for example, where overall sales rose 5% and prices increased 6%.

The expectation is for more of the same in the coming months. The Bank of Canada is not expected to make any changes in its policy announcement this week. Affordability will continue to push buyers into less expensive areas outside Vancouver and Toronto. And uncertainty in the energy sector will start to weight on consumer confidence.

Compliments of First National


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Economic Update from Michael Campbell

October 15th, 2015 No comments

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Bank of Canada maintains overnight rate target at 1/2 per cent

September 23rd, 2015 No comments

calculatorThe Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.

Inflation has evolved in line with the outlook in the Bank’s July Monetary Policy Report (MPR). Total CPI inflation remains near the bottom of the target range, reflecting year-over-year price declines for consumer energy products. Core inflation has been close to 2 per cent, with disinflationary pressures from economic slack being offset by transitory effects of the past depreciation of the Canadian dollar and some sector-specific factors. The dynamics of GDP growth in Canada outlined in July’s MPR also remain intact. The stimulative effects of previous monetary policy actions are working their way through the Canadian economy.

Canada’s resource sector continues to adjust to lower prices for oil and other commodities, with some spillover to the rest of the economy. These adjustments are complex and are expected to take considerable time. Economic activity continues to be underpinned by solid household spending and a firm recovery in the United States, with particular strength in the sectors of the U.S. economy that are important for Canadian exports.

Increasing uncertainty about growth prospects for China and other emerging-market economies, in contrast, is raising questions about the pace of the global recovery. This has contributed to heightened financial market volatility and lower commodity prices. Movements in the Canadian dollar are helping to absorb some of the impact of lower commodity prices and are facilitating the adjustments taking place in Canada’s economy. While the overall export picture is still uncertain, the latest data confirm that exchange rate-sensitive exports are regaining momentum.

Meanwhile, risks to financial stability are evolving as expected. Taking all of these developments into consideration, the Bank judges that the risks to the outlook for inflation remain within the zone for which the current stance of monetary policy is appropriate. Therefore, the target for the overnight rate remains at 1/2 per cent.

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