The Bank of Canada left the overnight rate unchanged at 1 per cent Tuesday, in the process suggesting a hike may not come anytime soon.
http://www.canadianrealestatemagazine.ca/index.php/news/item/1214-boc-rate-decision-holds-potential-downside
Jonathan's Opinion
I'm sure many people thught that interest rates would undoubtedly increase this year. I'm sure many thought they'd increase last year, or the year before.
As I've mentioned in my monthly blogs, it is easy for the Bank of Canada to say that rates HAVE to go up, but its very difficult, due to global turmoil (especially in the US), to actually increase them.
Rates will not go up this year, and I'd be surprised if they increase next year. To have a significant impact on inflation, rates must at least double...they will not double any time soon.
What this will do is keep an active real estate market. Prices will palteau at these all-time highs, or may even continue increasing marginally. As long as rates remain low, demand will not subside!
One thing I believe for sure, is that if our monetary policies remain the same as they have, a correction is not in the near future.
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