Canadian Real Estate Association (CREA): Interest rates to remain on hold for longer

The Canadian Real Estate Association (CREA) released an article this week stating that interest rates are to remain steady for the next while. The Bank of Canada has kept its Bank Rate at 1.25% on October 25, 2011, making it the ninth consecutive announcement which the rate has been held steady.

The Bank has said that it expects a ‘brief recession’ in the Eurozone but remains of the opinion that the euro-area crisis will be contained. In turn, the Bank has changed its forecast for Canadian Economic growth for this year from 2.8% to 2.1%. For 2012, the Bank has changed its forecast to 1.9% growth instead of the previously reported 2.6% from the July MPR.

However, the outlook for 2013 was increased to 2.9% from 2.1% suggesting that the Bank believes that economic growth will be achieved in 2013.

CREA explains in their article that “What it all means is that interest rates will likely be on hold even longer. Expectations as to how long it would be before the Bank hikes rates had previously centered around the fall  of 2012, although it will now more likely be into 2013 before the Bank begins to tighten monetary policy from current levels.”

At this point, it is expected that interest rates will remain steady.

SOURCE: Canadian Real Estate Association:

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Mary O'Brien

Mary O'Brien

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CENTURY 21 Miller Real Estate Ltd., Brokerage*
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