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Mortgage Broker News | 23 Jan 2013, 12:00 AM Agree 0
In a move anticipated by most analysts, The Bank of Canada announced today that the overnight rate will remain at 1 per cent, suggesting it – along with variable rates -- won’t rise anytime soon.
  • John | 24 Jan 2013, 04:45 AM Agree 0
    Slowing economy, eh? I wonder if the slowdown has anything to do with the mortgage rule changes. It might just be a psychological thing but if Canadians see the value of their house weakened, they curtail their spending. And if they curtail their spending enough, a recession is possible; business isn't likely to invest if the economy is showing signs of slowing down. Job well done, Mr. Flaherty!
  • Paolo Di Petta | | 24 Jan 2013, 05:47 AM Agree 0
    What's ironic is lower rates will only continue exacerbate the problem. Low rates are one of the big reasons why we're here in the first place.

    Low rates -> artificial affordability -> high competition from marginal buyers -> inflated market that will collapse if rates increase.
  • Greg Williamson | 24 Jan 2013, 01:22 PM Agree 0
    Insightful comment Paulo. I think what is also important is that people in the real estate industry are in an odd paradox. If rates stay low, then the problem you said is real as well as the fact that means the economy is not strong which his demand.

    If rates rise then the economy is improving except the market affordability at current prices will be extremely bad. This of course leads to an acceleration of the hosting decline.
  • Paolo Di Petta | | 25 Jan 2013, 06:22 AM Agree 0
    @Greg - Personally, I see a drop in home prices as a good thing. The big picture here is that housing will be more affordable long term. We can't sit idly by and let the problem get worse, it's only going to mean that the problem is going to be much worse later.
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