MORTGAGE MARKET UPDATE

by Paula Siemens 604.351.7438

The Bank of Canada (BofC) kept the overnight rate unchanged when they met on January 22nd. They sighted that the Canadian economy slowed in the 4th quarter of 2019 and they expect the 1st quarter of 2020 to also be slow. The GDP is expected to be 1.9% for 2020. They may cut the overnight rate at some point in 2020 for the following reasons:
• The Canadian economy may continue to show stunted growth
• The US is expected to have lackluster growth in 2020, lowering the overnight
rate should reduce the value of the loonie which is good for exports.
• Consumer spending is expected to slow in 2020

The one caveat to a cut is that real estate values have recovered in many areas so the BofC
may decide to leave rates unchanged for a longer period of time.

Long term, we don’t see any significant increases to the mortgage rates in 2020.