Just one interest rate rise in 2019 most likely says BCREA

by Steve Randall on 13 Dec 2018

Just a few months ago economists were predicting that the Bank of Canada would take a bullish stance on interest rates following its talk of ‘normalization’ of the interest rate environment.

Since then several things have changed. Despite some positive economic data and employment stats, issues such as the discounting of Canadian oil, slowing housing market, and the planned closure of the GM Oshawa plant, are all weighing on forecasts.

Give the gift of real estate success this year – grab a seasonal CREW subscription.
Use code HOLIDAYS2018 to claim your free festive gift.

The economists at the British Columbia Real Estate Association have issued their latest outlook for interest rates and say that, all things considered, they don’t see more than two rate hikes in 2019 with a single rise being the most likely scenario.

Specifically on mortgage rates, BCREA Economics says that lenders have been hesitant to raise their 5-year qualifying rate amid the slowest pace for mortgage book growth in 17 years, exacerbated by the tighter regulations.

Its outlook is that the 5-year qualifying rate of 5.34% in Q4 2018 will rise to 5.54% by Q2 2019 and remain there for the rest of the year. The 5-year average discounted rate is forecast to dip slightly from 3.74% in Q4 2018 to 3.64% in Q1 2019 before returning to 3.74% for the remainder of 2019.

Post a Comment



Most Trending News

Toronto property taxes explained
News

No matter where you are, there are going to be some recurring costs associated with your investment. Here, we'll explain how property taxes work in Toronto.

Read More
Assessing average condo size: Toronto paying more for less
News

Data from Statistics Canada and Royal LePage indicate that in recent years, the square footage of Toronto condos has been shrinking at an arming rate.

Read More
Mortgage rates back up as GOC bond yields rise
News

Global bond yield rates are up this month, and Canada is not missing out on the action. Yield rates surged to 1.24% from the 0.85% of late September.

Read More