Wednesday, June 04, 2014

Bank of Canada announced today that they are leaving the key bank prime overnight interest rate at 1%

The Bank of Canada announced today that they are leaving the key bank prime overnight interest rate at 1%

This rate has remained fixed at this 1% since 2010 and there are no signs of increasing the rate in the future.

The major banks will most likely continue to keep their bank prime rate at 3% and this will be the key amount that all other mortgage rates, loan and deposit rates will remain relative to.

Banks can offer lower or higher rates to customers regardless of the Bank of Canada rate, but they often will move in concert with the Bank Rate.

See the entire press release below.

All the best!

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
Total CPI inflation has moved up to around the 2 per cent target, sooner than anticipated in the Bank’s April Monetary Policy Report (MPR), largely due to the temporary effects of higher energy prices and exchange rate pass-through. Core inflation remains significantly below 2 per cent although it has drifted up slightly, partly owing to past exchange rate movements.
Global economic growth in the first quarter of 2014 was weaker than anticipated in the MPR and recent developments give slightly greater weight to downside risks. The U.S. economy is rebounding after a pause in the first quarter, but there could be slightly less underlying momentum than previously expected. Globally, long-term bond yields have continued their decline, reflecting in part growing market anticipation that interest rates will remain low over the long term. This, along with buoyant stock markets and tight credit spreads, indicates that financial conditions remain very stimulative.
The Canadian economy grew at a modest rate in the first quarter, held back by severe weather and supply constraints. The ingredients for a pickup in exports remain in place, including the lower Canadian dollar and an anticipated strengthening of foreign demand. Improved corporate profits, especially in exchange rate-sensitive sectors, should also support higher business investment in the coming quarters. There are continued signs of a soft landing in the housing market and a constructive evolution of household imbalances. We still expect excess supply to be absorbed gradually as the fundamental drivers of growth and inflation in Canada strengthen.
Weighing recent higher inflation readings against slightly increased risks to economic growth leaves the downside risks to the inflation outlook as important as before. At the same time, the risks associated with household imbalances remain elevated. The Bank judges that the balance of risks remains within the zone for which the current stance of monetary policy is appropriate and therefore has decided to maintain the target for the overnight rate at 1 per cent. The timing and direction of the next change to the policy rate will depend on how new information influences the balance of risks.

Toronto Real Estate Board (TREB) Average Prices and Graph

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1
BUS. 905-828-3434
FAX. 905-828-2829

Toronto Real Estate Board Report for June 2014 Sale Price UP and sales volumes up!

The latest report from the Toronto Real Estate Board for June 2014 is out, Sales price up and sales volumes up!

Average price of $540,544 - up 8.3% compared to May of last year

Sales Volume of 11,079 - up 11.4% compared to May of last year

See the full report below,

Tight Market Conditions Prompt Strong Price Growth

Sales and Average Price Up last month

TORONTO, June 4, 2014 – Toronto Real Estate Board President Dianne Usher announced that both the number of home sales through the TorontoMLS system and the average selling price were up strongly in May compared to a year ago.

Total TorontoMLS sales for May 2014 amounted to 11,079 – a new high for the month of May. This result was up by 11.4 per cent compared to 9,946 sales reported in May 2013.

The average selling price for these sales was $585,204, representing an 8.3 per cent year-over-year increase compared to the average price of $540,544 in May 2013.

“We are now at the peak of the spring market when we generally see the greatest number of sales and the highest average selling prices. Based on the May statistics, buyers have been more active this spring compared to last year.

Despite strong price growth so far in 2014, many households remain comfortable with the monthly mortgage payments associated with the purchase of a home, as borrowing costs have remained at or near record lows over the past few months,” said Ms. Usher.

Average selling prices varied across the Greater Toronto Area, depending on geography and home type. A detached home in the City of Toronto sold, on average, for $943,055. In the surrounding GTA regions, the average detached price was $648,439. The average price for condominium apartments was $401,809 in the City of Toronto and $307,307 in the surrounding regions.

“The listings situation in the GTA did not improve this past May. With listings down and sales up compared to last year, competition between buyers increased. The result was price growth well above the rate of inflation, especially for singles, semis and townhomes,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“It is also important to point out that even though the condo apartment market segment remains comparatively well-supplied, as new project completions have generally led to an uptick in listings, we have seen enough buyer interest to prompt strong condo price growth as well,”