Due to the coronavirus outbreak that happened in 2019, the bank of Canada took a decision to decrease its interest rate significantly in March 2020.
The economic situation worsened and that’s why the interest rate decreased to 0.25%. Such an interest rate is record low in the history of Canada. These changes were made to increase home buying activity in the country and stimulate people to buy more properties.
This year the central bank of Canada has a new leader. Nowadays, the bank is managed by Tiff Macklem. Year later, the bank was managed by Stephen Poloz.
The situation has improved and things are getting back to normal. Nevertheless, the bank is not going to increase the interest rate until 2023. The bank’s representatives say that the interest rate will increase only after the economy will have significant improvements.
The interest rate is expected to remain low until 2023. It’s important to note that consumer lending rates are record-low now as well. The experts say that these rates will unlikely rise in the nearest future.
It goes without saying that it’s the right time to buy properties in Canada now. Canadian home buyers as well as real estate investors have great opportunities these days. They can take advantage of low mortgage rates to buy properties.
Without a doubt, low mortgage rates create the ideal conditions for real estate buyers in Canada. More and more people would like to benefit from low rates to purchase properties in Canada.
The search statistics provided by Google Canada shows that the demand for properties in Canada is very high today. The number of search terms, which are related to mortgage, is constantly growing. It’s going to increase in the nearest future.
However, the bank of Canada is not going to change its plans in the next several years. The bank is going to keep the interest rate low.
The latest data shows that the economical situation is getting better in the country these days. That’s the reason why some Canadian real estate experts believe that the Bank of Canada may change its attitude in the nearest future.
The reality is, the Canada’s economy improved dramatically in the 4-th quarter of 2020. The economy has grown by 9.6%. Obviously, the economic growth is very fast. The significant improvements are expected in the 1-st quarter of 2021.
According to the opinions of specialists at Thanabalasingam, the economic situation will continue to improve because of the vaccine rollout. And of course, this situation will have a huge positive impact on home buying activity in the country.
All of this means that the bank may change its policy much earlier than it’s expected. The bank may increase its interest rate if the Canada’s economy continues to do well. Such changes may happen much earlier than in 2023. The time will show!