Its been quite a week Stock markets are jirating, Prime rates are being reduced. What does this mean for BC Real Estate and Mortgage Rates?
The Bank of Canada reduced its trend setting Prime Rate by 1/4% this week, which is much less than the 3/4% cut by the Feds in the US. The large US cut was in response to the huge losses in US stock markets over the past month along with recent stats pointing towards a US recession. There is now upward pressure on our dollar as Canada looks more attractive to investors, something the Feds in Ottawa dont want to much of.
What does this all mean for Canadian homeowners and particularly those of us in BC?
Part 1 goes like this.
The Canadian economy has been much stronger than the US in regards to employment gains, economic expansion, and the Federal Governments debt and deficits. The US is running massive deficits while Canada has been running surpluses for many years now and is paying down the countries debt. The Federal government has also implemented large tax cuts both on the corporate level and the personal level. Bottom line? The Canadian economy is much stronger and is on more solid footing than the US.
Stay tuned for part 2!
