Bank of Canada holds interest rate, drops growth forecast for 2019
The Bank of Canada is keeping its key interest rate unchanged as it releases a downgraded 2019 growth forecast that includes a prediction the economy nearly came to a halt at the start of the year.
The central bank also appears to be in no hurry to move the interest rate any time soon because, unlike recent statements, the announcement today removed all mentions of a need for future increases.
The decision leaves the trend-setting rate at 1.75% for a fourth-straight announcement -- a pause that followed governor Stephen Polozs stretch of five hikes between mid-2017 and last fall.
The bank says the economy was operating close to full tilt for most of 2017 and 2018 before a sudden deceleration in the final months of last year, which was largely caused by a drop in oil prices and unexpectedly weak numbers for investment and exports.
In new projections today, the bank is predicting growth of real gross domestic product of 1.2% for 2019, down from its January forecast of 1.7%.
The Bank of Canada is projecting growth of just 0.3% in the first quarter of 2019, though its predicting the economy to pick up its pace in the second quarter on expectations of stronger housing activity, consumption and business investment.
THREE GRAND PRIZE WINNERS FROM ALBERTA, MANITOBA AND NEWFOUNDLAND WIN MEANING OF HOME CONTEST IN SUPPORT OF HABITAT FOR HUMANITY CANADA
Over 8,000 Grades 4, 5 and 6 students from across Canada shared what home means to them in the annual Meaning of Home contest in support of Habitat for Humanity Canada. Each of the three grand prize winners (one from each grade) will receive a $25,000 grant to be directed to the local Habitat build of their choice. Nine runners up have won a $5,000 grant towards a local Habitat for Humanity home build. Every student entry earned a $10 donation for that students local Habitat for Humanity, helping to raise an additional $82,000 that will go towards building more homes in communities across Canada.
Mallory Pitzner, from Airdrie, Alberta is the Grade 4 grand prize winner and will be directing her $25,000 grant to Habitat for Humanity Southern Alberta. Click here to read Mallorys winning poem When I Think of Home.
Eva Marasa is the Grade 5 grand prize winner, from Winnipeg, Manitoba. Her grant will be directed to Habitat for Humanity Manitoba. Click here to read Evas winning poem: Home.
The Grade 6 grand prize winner is Hannah Brown, from St. Johns, Newfoundland, who is directing her grant to help build homes with Habitat for Humanity Newfoundland Labrador. Click here to read Hannahs winning poem: Home.
I want to congratulate all the winners, but I also want to thank every student who entered and shared what home means to them, said Mark Rodgers, President and CEO of Habitat for Humanity Canada. Each and every one of you has made a tangible difference in your community - helping raise both awareness and funds that will allow us to serve more families.
Canadian home sales rise again in May 2019
Home sales recorded via Canadian MLS Systems rose by 1.9% in May 2019. Together with monthly gains in March and April, activity in May reached the highest level since January 2018. While sales stood 8.9% above the six-year low reached in February 2019, this latest increase has only just returned levels to their historical average.
While May sales were only up in half of all local markets, that list included almost all large markets, led by gains in both the Greater Vancouver (GVA) and Greater Toronto (GTA) areas.
Actual (not seasonally adjusted) sales activity was up 6.7% compared to May 2018, marking the largest y-o-y gain recorded since the summer of 2016. The increase returned sales in line with the 10-year average for the month of May. While about two-thirds of local markets posted y-o-y gains for the month, the national increase was dominated by improving sales trends in the GTA, which accounted for close to half of the overall increase.
Home price trends and market balance continues to differ significantly among Canadian housing markets, said Jason Stephen, CREAs President. All real estate is local. No matter where you are, a professional REALTOR is your best source for information and guidance in negotiations to purchase or sell a home during these changing times, said Stephen.
The mortgage stress-test continues to present challenges for home buyers in housing markets where they have plenty of homes to choose from but are forced by the test to save up a bigger down payment, said Gregory Klump, CREAs Chief Economist. Hopefully the stress-test can be fine tuned to enable home buyers to qualify for mortgage financing sooner without causing prices to shoot up.