Bank of Canada announced yesterday that it has decided to maintain the target for the overnight rate at 1 per cent. The target interest rate was last changed over one year ago on September 8, 2010. read more
Changes in the target overnight rate influence other interest rates, such as prime lending rates and those for consumer loans and mortgages.
The Bank stated that the global economy has slowed markedly and the outlook for the Canadian economy has weakened since July. It now expects that growth in Canada will be slow through mid-2012 before picking up as the global economic environment improves, uncertainty dissipates and confidence increases. The Bank projects that the economy will expand by 2.1 per cent in 2011, 1.9 per cent in 2012, and 2.9 per cent in 2013.
The next Bank of Canada decision on the overnight rate is January 17th, 2012.
How Does This Affect Toronto Real Estate Market?
With the target interest rate near historic lows, mortgage rates are expected to remain low and affordable for some time to come. As a result, it is likely that home buyers will continue to be attracted to the market, creating demand and maintaining market momentum in Toronto’s home market.