BOC ups growth, stands pat on rates
The Bank of Canada boosted its growth forecast Tuesday but threw a curve ball at Bay Street expectations for a July interest-rate hike by warning the “persistent strength” in the loonie could cause even greater headwinds for the economy.
While some analysts still expect the central bank to start raising rates in July after leaving them unchanged on Tuesday at 1%, others said the statement indicated the bank is in no hurry and could wait until the fall at the earliest.
“It will be difficult to pin down when the next hike will be when you have a central bank that takes the currency into account when making its policy decision,” said Avery Shenfeld, Chief Economist at CIBC World Markets. “And we have a currency that’s volatile right now.”
Shenfeld said the central bank would prefer a “softer currency” before it opts to raise rates again. He added that could unfold in July if commodity prices take a breather.
Click here for the full Financial Post article.
Canadians under 35 most intent on buying homes: survey
Canadians younger than 35 are most intent on buying a home over the next two years, according to a survey released Thursday.
But most of those in this age group, which included people 18 to 34, indicated in the Royal Bank of Canada’s annual home-ownership survey that it would be better to wait until next year to make a purchase.
Fifty-five per cent of respondents in this age category said it makes sense to wait until next year before buying a home, compared to 45% of overall respondents who felt this way.
“In a more balanced housing market, it makes sense that younger and first-time homebuyers are waiting to assess all of their options and do their research before buying a home,” said Bernice Dunsby, RBC’s director of home equity. “It’s also important to get expert advice on what you can afford and leave yourself with a little extra wiggle room in your budget so you don’t become house poor, as home maintenance and lifestyle costs can add up.”
Click here to read more from the Vancouver Sun.
Click here to read more about the RBC poll results.
Home values continue to rise, according to Royal LePage
The latest Royal LePage House Price Survey showed the average price of a home in Canada increased between 3.5 and 4.3% in the first quarter of 2011, compared to the previous year, as markets continued their post-recession recovery.
While the rate of year-over-year price appreciation slowed slightly in the first quarter, home values continued the upward climb, which first began late in the second quarter of 2009.
Low interest rates and a recovering economy continued to fuel activity in Canada’s housing markets over the past year, which has led to country-wide increases in average home prices. In the first quarter of 2011, the national average price of a detached bungalow rose 4.3% year-over-year to $341,355, while standard two-storey homes rose 3.5% to $379,388, and standard condominiums rose 4% to $237,919.
“The rate at which Canadian homes are appreciating may well have peaked for the next year or so,” said Phil Soper, President and Chief Executive of Royal LePage Real Estate Services. “We expect house prices will continue to creep up, but most of the excess demand created by the initial drop in interest rates has been satisfied, and affordability continues to erode slowly, allowing the listings supply to catch up. In most markets, lower single digit percentage increases are more likely for the balance of the year.”