1. BoC interest rate remains unchanged
Governor Mark Carney left its key interest rate unchanged at 1%; the last time it rose was September 8th, 2010 from 0.75% to 1.0%.
“The economic weakness that is unfolding in Europe, emerging economies, as well as in the U.S., is impacting Canada’s economic growth projections,” Arlene Kish, economist at IHS Global Insight, wrote in a report.
Due to European crisis and emerging economies (i.e., China) is affecting the price and demand for commodities such as oil and timber. Economists believe that Carney will keep interest rates the same until late 2013.
2. Equifax Report suggests Canadian taking on less debt
The pace of consumer debt growth is about 30% lower YoY, which is the biggest slowdown since before the recession; this shows Canadians are handling their financial situations better with a decrease in serious consumer delinquency and bankruptcy numbers.
3. Canadian housing Market – boom or doom?
Prices are deflating at a rate of 0.8% YoY, and are gradually becoming a buyer’s market as unsold homes supply’s are rising. Existing home sales dropped 1.3% MoM, and 4.4% YoY in June 2012. Lastly, Canada’s housing correction could see prices to fall another 10% to 15%.
Source: http://business.financialpost.com/2012/07/17/will-canadas-housing-boom-end-with-a-whimper-or-a-bang/
4. New Mortgage rules
– Amortization period is now 25 years, down from 30 years for government insured mortgages.
– Borrowers can borrow up to 80% of their property value as collateral, instead of 85%
– Government backed mortgages insurance will be limited to homes with a purchase price of less than $1 million.
HonestLady 