Today the Bank of Canada announced it was slashing interest rates by half a percentage point to 3.5 per cent.
The bank also signaled more rate cuts are likely as it seeks to protect the Canadian economy from a slowdown in the U.S. The cut is welcome news to Canadians hoping to buy a home, as analysts anticipate a cut in mortgage interest rates also.
"Overall, today's move from the Bank of Canada suggests that although domestic demand in Canada remains incredibly healthy, they're increasingly concerned about spillover effects from the slumping U.S. economy," said Jacqui Douglas, economics strategist at TD Securities.
On a daily basis, as I monitor the Toronto real estate market, I wonder whether these interest rate cuts will only add fuel to the fires and serve to bring back the bidding wars we have witnessed for several years now.
Hopefully with the spring market just around the corner we will begin to see more homes come on the market, bringing more balance for a buying public, who is growing increasingly weary of having to fight so many other buyers in order to buy their dream home.
(This article was first published March 06, 2008)