Mortgage, Money and Dream – Our thoughts on Canadian Mortgage Market
Call Us: 416-930-1225

It is not news that Bank of Canada left the overnight target rate as-is (@1%). Prime rate remained at 3% for now. The chorus of the lenders about restriction in the delivery mechanism may be a prelude to push prime up in future – but that is just a guess.

Few things never make sense. When we say – historically high level – don’t we want that? In order to survive and pay out our taxes we need growth. By the basic definition of growth – tomorrow should be historically higher than today.

When the bank says that the residential investment to decline further from historically high levelsshouldn’t it mean that the market will go down? Thus period of growth has ended. Ahem! Something wrong with that, the bank surely did not mean that.

Another drift is in the inflation targeting – the bank now works on the future inflation expectations, rather than current inflation.

The mandate of Canadian central bank is to maintain price stability. It is somehow trying to walk on the tight rope while maintaining the balance between domestic demand and personal debt.

So far it has been successful doing its job. Now it is up the new BoC boss to keep steering the country’s economy in the right direction.