Market Update March 2020

This week the Bank of Canada lowered their overnight rate by .50% to 1.25%. This was, in my opinion, a kneejerk reaction to the potential Covid 19 outbreak that has the potential to super charge our spring real estate market, which has been sitting in a sellers market already for the last 6 months. Coupled with the softening of the stress test effective April 6th we are likely to see prices of entry and mid level housing to rise, perhaps not at the levels seen through the last aggressive market cycle, but stronger growth than I had anticipated before this rate cut.

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Bank of Canada Lowers Overnight Rate Target to 1 ¼ Percent - March 4, 2020

The Bank of Canada today lowered its target for the overnight rate by 50 basis points to 1 ¼ percent. The Bank Rate is correspondingly 1 ½ percent and the deposit rate is 1 percent.

While Canada’s economy has been operating close to potential with inflation on target, the COVID-19 virus is a material negative shock to the Canadian and global outlooks, and monetary and fiscal authorities are responding.

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