News item: Bank of Canada drops interest rate…again
For the second time in 10 days, the Bank of Canada cut its overnight rate by 50 basis points, to 0.75 per cent. The new rate went into effect this week as “a proactive measure taken in light of the negative shocks to Canada’s economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices.”
The March 4 cut — which lowered the rate to 1.25 per cent — had an immediate impact on mortgage rates and led to an increase in activity on most real estate markets. At least one bank almost immediately cut its prime rate by the full 50 basis points.
Normally, the Bank of Canada goes six weeks between interest-rate announcements.
News item: Change to stress test now ‘on hold’
The Office of the Superintendent of Financial Institutions (OSFI) suspended “all of its consultations and policy development on new or revised guidance until conditions stabilize.”
That included the B-20 benchmark rate for uninsured mortgages, which led to suspending changes to the “stress test” that were to go into effect on April 6.
The benchmark rate change was designed to make it easier for buyers to qualify for mortgages by reducing the interest rate by another 30 basis points.
News item: Vancouver real estate market recovery continuing
In making real estate-based communication and personal observations, Nexus at this point is not seeing a negative impact on the market as a result of the coronavirus. The mode of recovery is continuing and MLS administration reports listings and sales as being typical early this week.
Open houses are being held, when appropriate, and agents are continuing to be careful and responsible in making appointments for showings.