In case you missed it, the benchmark interest rate is probably going to stay at one-quarter of one per cent (0.25%) until sometime in 2023.
That extends the record-low interest rate for another two years and that’s good news for — among other industries — real estate. In theory, that figures to ease the financial burden for people who want to find housing more affordable.
According to financial analysts, the Bank of Canada is basing this decision because it’s confident in the economy’s ability to navigate the second wave of COVID-19 infections, because the prospects are brighter for exports and business investment, because the GDP jumped to 9.6 per cent in the fourth quarter and because Canada has recorded its largest trade surplus in seven years.
Such is the confidence in Canada’s economy.
If you’ve been reading News From Nexus, you may notice that this is the same Bank of Canada that was predicting a real estate boom followed by a bust in the months head. According to a story in The Financial Post, that facts have inspired a change of thinking, if not a reversal, while noting that the labour market is “a long way from recovery.”
“Consumers and businesses are adapting to containment measures, and housing market activity has been much stronger than expected,” the central bank said in an updated policy statement.