The BC Real Estate Association has issued its latest Mortgage Interest Rate Forecast for 2016 today.
For those of you looking to buy a Home during the coming year, it looks like rates are set to start rising.
Here are some key points and a link to the full report below -:
Interest Rate Outlook
Canadian and US monetary policy is set to diverge this month as the Fed begins its first tightening cycle in close to a decade while the Bank of Canada is on the sidelines after lowering rates twice in early 2015. In contrast with the US, core inflation in Canada has been at or slightly above the Bank’s 2 per cent target for 15 consecutive months, largely due to a falling Canadian dollar pushing up the price of imported goods.
Absent a substantial recovery in global commodity prices, the Canadian economy will more than likely grow near its long-term trend rate over the next two years. That growth rate will keep inflation relatively anchored at or below its 2 per cent target. A baseline scenario of economic growth above 2 per cent, paired with low inflation and steady job growth should keep the Bank of Canada sidelined over the medium run. However, several quarters of steady growth following the oil price shock of late 2014 may convince policymakers that the economy is no longer in need of monetary stimulus injected into the economy via the two rate cuts in early 2015. If so, the Bank may shift back to a tightening bias with a potential rate increase as early as 2017.
To read the full report, please go to http://www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/mortgagerateforecast.pdf
Trish and Tanis
Tel 250 864 1707