barriehome.net

According to a spokesman, The Bank of Canada will not raise its interest rates to cool the country’s hot housing market.

Those who fear a bubble worry that many people are taking advantage of cheap money to buy homes they wouldn’t be able to afford once rates rise, leading ultimately to a crash in prices.

Lane said the bank understands the concern, but it uses its lending rate to keep inflation in check for the whole economy and the housing market is “only one of several factors” that influence inflation.

Canada’s residential real estate market is forecast to remain unusually strong through the first half of 2010 as economic conditions across the country improve and the stimulus impact of low interest rates continues to stoke demand, according to the latest Royal LePage House Price Survey and Market Survey Forecast. 

As confidence in the recovery builds in early 2010, increases in average house price levels and overall market activity are expected to continue. The gradual erosion of affordability driven by higher house prices and the expected late-year modest upward movement of interest rates, together with an improvement in listings supply as confidence improves, are expected to bring the market back into balance in the second half of the year, when home price increases are expected to moderate.

Trevor Shaw
Sales Representative
RE/MAX Chay Realty Inc., Brokerage
Dir: 705-791-5004
OFC: 705-722-7100