Inflation and Interest Rates to remain flat, according to BCREA’s Chief Economist Cameron Muir who noted the current trend and made the following comments yesterday:
“Canadian inflation, as measured by the Consumer Price Index (CPI), slowed to 1.4 per cent in the 12 months to October, down from 1.6 per in September. The Bank of Canada’s three measures of trend inflation were largely unchanged, averaging 1.6 per cent. In BC, provincial consumer price inflation was 2.0 per cent in the 12 months to October.
Inflation in Canada continues to trend below the Bank of Canada’s 2 per cent target in spite of a very strong economy and a narrowing of the output gap. Until that trend changes, we expect the Bank will hold its policy rate at 1 per cent.”
Buyers can take a breath and focus more on saving that down payment of 20% thereby eliminating the need to qualify for the extra 2% in January. The FEDS want to curb the urge to mortgage the maximum amount thus protecting those that live pay check to pay check from getting in over their heads should their circumstances change. The amount of “good debt” should improve the lender’s portfolios and protect us simply humans from ourselves in our desire to own property. The jury is out and it will be quite some time before the results are in.