Just a few months ago, economists predicted that the Bank of Canada would take a bullish stance on interest rates after its speech about its “normalization.”
Since then several things have changed. Despite some positive economic data and employment statistics, issues such as the Canadian oil discount, the slowdown in the housing market and the planned closure of the GM Oshawa plant are weighing in the forecasts.
Economists from the Real Estate Association of British Columbia issued their latest outlook for interest rates and say that, considering all aspects, they see no more than two increases in the rate in 2019, with a single increase as the most probably scenario.
Specifically on mortgage rates, BCREA Economics says that lenders have hesitated to raise their rating rate to 5 years amidst the slowest pace for mortgage book growth in 17 years, aggravated by stricter regulations.
His outlook is that the 5-year rating rate of 5.34% in the fourth quarter of 2018 will increase to 5.54% for the second quarter of 2019 and will remain there for the rest of the year. The 5-year average discount rate is forecast to fall slightly from 3.74% in the fourth quarter of 2018 to 3.64% in the first quarter of 2019 before returning to 3.74% for the remainder of 2019.
If you are thinking about investing in real estate this year, buy or sell a property, contact me and offer you the best advice in the market.