BoC interest rate revealed!
The Central Bank raised its new target for the overnight rate to % Wednesday, citing a confident financial outlook and above-potential growth.
This despite softened inflation, which thebankCanadas economy has been robust, fuelled by household spending. As a result, a significant amount of economic slack has been absorbed. The very
The BoC estimates real GDP growth to moderate from 2.8% in 2017 to 2% in 2018 and 1.6% in 2019.
Governing Council judges that the current outlook warrants todays withdrawal of some of the monetary policy stimulus in the economy, the Bank said. Future adjustments to the target for the overnight rate will be guided by incoming data as they inform the Banks inflation outlook, keeping in mind continued uncertainty and financial system vulnerabilities.
judges to be temporary.strong
of the first quarter is expected to moderate over the balance of the year, but remain above potential, it said. Growth is broadening across industries and regions and therefore becoming more sustainable. As the adjustment to lower oil prices is largely complete, both the goods and services sectors are expanding.
Household spending will likely remain solid in the months ahead, supported by rising employment and wages, but its pace is expected to slow over the projection horizon, the Bank continued. At the same time, exports should make an increasing contribution to GDP growth. Business investment should also add to growth, a view supported by the most recent Business Outlook Survey.
The Bank also cited strengthening global economy and a US economy that is solidly growing as factors for raising its rate.
Europe is also experiencing above-potential growth.
However, geopolitical uncertainty and softened world oil prices remain concerns.
If you have any questions about how this can impact your variable rate mortgage or line of credit, contact me!
Building permits up in Western Canada, down east of Manitoba
Four provinces reported increases in March, led by British Columbia with an increase of 12.8% (+$180 million). Meanwhile, all provinces east of Manitoba reported declines. The largest decrease was in Ontario, down 1.4% (-$43 million) due to lower construction intentions in the residential sector.
Quebec drives movement in non-residential permits. The national value of permits for non-residential buildings rose 7.9% in March, due to higher construction intentions for both institutional (+$175 million) and commercial (+$166 million) buildings. Gains in both of these components stemmed from Quebec. A high value permit for an addition to the Centre hospitalier de lUniversit de Montral drove the increase in the institutional component.
In the industrial component, the value of permits declined 15.6% in March (-$102 million). The decrease was largely the result of lower construction intentions in Quebec, where multiple high-value permits were issued in February.
Canadian home sales edge higher in March 2019
Home sales via Canadian MLS Systems edged up 0.9% in March 2019 following a sharp drop in February, leaving activity near some of the lowest levels recorded in the last six years.
There was an even split between the number of markets where sales rose from the previous month and those where they waned. Among Canadas larger cities, activity improved in Victoria, the Greater Toronto Area (GTA), Oakville-Milton and Ottawa, whereas it declined in Greater Vancouver, Edmonton, Regina, Saskatoon, London and St. Thomas, Sudbury and Quebec City.
Actual (not seasonally adjusted) sales activity fell 4.6% y-o-y to the weakest level for the month since 2013. It was also almost 12% below the 10-year average for March. That said, in British Columbia, Alberta and Saskatchewan, sales were more than 20% below their 10-year average for the month. By contrast, activity is running well above-average in Quebec and New Brunswick.
It will be some time before policy measures announced in the recent Federal Budget designed to help first-time homebuyers take effect, said Jason Stephen, CREAs President. In the meantime, many prospective homebuyers remain sidelined by the mortgage stress-test to varying degrees depending on where they are looking to buy. All real estate is local, and REALTORS remain your best source for information about sales and listings where you live or might like to in the future, added Stephen.