As expected, the Bank of Canada announced yesterday that it is not changing the benchmark rate. The announcement noted that with “inflation expected to be well below target for some time, the downside risks to inflation remain important.”
This is great news if you’ve got a variable-rate mortgage; the prime rate stays at 3% and it’s unlikely we’ll see any increases in the near future.
The next rate-setting day is April 16. Eight times a year, the Bank of Canada sets the rate that governs each lender’s prime rate. Variable-rate mortgages and lines of credit move in conjunction with the prime lending rate. Fixed rates on the other hand are based on the bond market.
Statistics wise, the Canadian real estate resale market remains stable in February.
Ontario - Resale market remains stable in February
Toronto, March 5, 2014 -- Toronto Real Estate Board (TREB) President Dianne Usher announced that February 2014 home sales reported by Greater Toronto Area REALTORS® were up by 2.1% compared to the same period last year. Total February sales amounted to 5,731 compared to 5,613 last year.
“Despite the continuation of inclement weather in February, we did see a moderate uptick in sales activity last month. The sales increase was largely driven by resale condominium apartments. New listings of resale condominium apartments were up on a year-over-year basis, giving buyers ample choice. This is in contrast to the listings situation for singles, semis and townhomes, where supply continued to be constrained. Some would-be buyers had difficulty finding a home that met their needs,” said Ms. Usher.
“If we see renewed growth in listings for low-rise home types, the pace of sales growth will accelerate as we move through the year,” Ms. Usher continued.
The average selling price for February 2014 sales was up by 8.6% to $553,193, compared to the average of $509,396 reported for February 2013. The Multiple Listing Service® (MLS®) Home Price Index (HPI) Composite Benchmark was up by 7.3% year-over-year.
“While the strong price growth experienced over the last year should prompt an improvement in the supply of listings, sellers’ market conditions will continue to prevail this year. Home prices, on average, will trend upwards at a pace well-above the rate of inflation. The impact of strong price growth on affordability will be mitigated by low borrowing costs,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.