Thursday, January 21, 2010

Real estate and interest rates

Well the Bank of Canada meeting day came and went with a large sign of relief for most bank rate watchers.
The B of C indicated that they are in no hurry to begin raising it's benchmark rate, at .25%, until later this year, as was originally stated. This means the prime is unchanged and that mortgage lending rates will remain low as they gurgle around, up and down. While predictions for growth are more optimistic than originally stated for 2010 and 2011,the BOC still maintains that economic recovery continues to depend on exceptional fiscal and monetary stimulus. This also translates to the housing market.
The general feeling for Kelowna real estate buyers and sellers is that times are still very good but the end of these historically low rates coupled with low down payments and longer than normal amortization periods may be on the horizon. With this in mind a growing number of people are thinking about getting their homes on the market sooner as opposed to later to capitalize on this mini flurry of activity.
As a side note, to those wondering about how our countries borrowers of mortgage money fare out to our US counterparts... it's interesting to see that over 86% of 40,000 new Canadian mortgage holders in 2009 are in fixed terms and of those 70% are in terms of 5 years or more. Very responsible Canadians!
Talk to you soon...

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