The housing market is expected to experience a soft landing, as opposed to a hard correction, the Bank of Canada announced in its monthly overnight rate announcement this week.
“The housing sector has been stronger than expected but is consistent with updated demographic data and a pulling forward of home purchases in light of favourable financing conditions,” the report stated. “The Bank continues to expect a soft landing in the housing market.”
The Bank of Canada also announced its newest overnight rate Wednesday and… surprise… they have chosen to hold it steady at one per cent, once again.
“Overall, the balance of risks remains within the zone articulated in October,” the report stated. “Weighing these considerations, the Bank judges that the substantial monetary policy stimulus currently in place remains appropriate and therefore has decided to maintain the target for the overnight rate at 1 per cent.”
The overnight rate has, of course, remained at one per cent for over three years with the Bank of Canada choosing to refrain from interfering. The announced rate bodes well for those homebuyers currently holding a variable-rate mortgage.
GDP growth, meanwhile, was stronger than initial projections.
“In Canada, underlying growth is broadly in line with the Bank’s projections in its October and July Monetary Policy Reports,” the report stated. “Real GDP growth in the third quarter, at 2.7 per cent, was stronger than the Bank was projecting, but its composition does not yet indicate a rebalancing towards exports and investment.”