CREA News

Ottawa, ON, May 15, 2013 – According to statistics released today by The Canadian Real Estate Association (CREA), national home sales edged up slightly on a month-over-month basis in April 2013. Activity has generally held to within short reach of current levels for the past nine months. 

Highlights:

• National home sales rose 0.6% from March to April.
• Actual (not seasonally adjusted) activity came in 3.1% below levels in April 2012.
• The number of newly listed homes fell 0.9% from March to April.
• The Canadian housing market remains firmly in balanced territory.
• The national average sale price rose 1.3% on a year-over-year basis in April.
• The MLS® HPI rose 2.2% in April, its smallest gain in more than two years.

The number of home sales processed through the MLS® Systems of real estate Boards and Associations and other cooperative listing systems in Canada edged 0.6 per cent higher on a month-over-month basis in April 2013.

Home sales improved in more than half of all local markets from March to April, led by gains in Greater Toronto, Winnipeg, Calgary, and Victoria.

“National sales activity is stable and the market remains balanced,” said CREA President Laura Leyser. “That said, trends for sales and listings and for the balance between the two can be and often are very different between and within local housing markets, and between property types and neighbourhoods. These trends are important factors in determining pricing. Your local REALTOR® is your best resource for understanding how the housing market is shaping up where you live or might like to.”

Actual (not seasonally adjusted) activity came in 3.1 per cent below levels reported in April 2012, with transactions down on a year-over-year basis in about 60 per cent of local markets.

That compares to a decline of more than 15 per cent in March, with transactions down in more than 90 per cent of all local markets.

“The Easter holiday and an extra full weekend at the end of the month lowered March sales activity and the absence of these factors in April helped sales for the month,” said Gregory

Klump, CREA’s Chief Economist.

“Since changes to mortgage rules made in 2012 took effect, national sales have been running nine to 10 per cent below levels posted in the first half of 2012 but they’ve been remarkably steady. April activity was on par with where it stood last August, and month-to-month changes since then have held to within a range of plus or minus two per cent.” Monthly changes in national sales activity have held to within this narrow range over a nine month period only once before since CREA’s seasonally adjusted data began in 1988.

The number of newly listed homes fell 0.9 per cent month-over-month in April. New listings were down in about half of all local markets, led by Montreal and much of rural Quebec, as well as Ottawa and Greater Vancouver.

With sales edging up and new listings edging down, the national sales-to-new listings ratio inched up to 50.4 per cent in April compared to 49.7 per cent in March. This measure has held fairly steady around this level for the past nine months.

Based on a sales-to-new listings ratio of between 40 to 60 per cent, two-thirds of all local markets were in balanced market territory in April.

The number of months of inventory is another important measure of balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

Nationally, there were 6.6 months of inventory at the end of April 2013. This was unchanged from the end of March and has also held fairly steady around this level for the past nine months.

The actual (not seasonally adjusted) national average price for homes sold in April 2013 was $380,588, representing an increase of 1.3 per cent from the same month last year.

Fewer sales compared to a year-ago levels in Greater Vancouver and Greater Toronto continue to exert a gravitational pull on the national average sale price.

The MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales the way that average price is. For that reason, it provides the best gauge of Canadian home price trends. This month, Saskatoon joins the MLS® HPI.

The Aggregate Composite MLS® HPI rose 2.2 per cent on a year-over-year basis in April.

This marks the eleventh consecutive month in which the year-over-year gain diminished and the slowest growth rate in more than two years.

Year-over-year price gains decelerated for all Benchmark property types tracked by the index with the exception of apartment units in April, with the latter rising by less than inflation.

Price growth remained strongest for one-storey single family homes (+3.1 per cent), followed by two-storey single family homes (+2.6 per cent), townhouse/row units (+1.7 per cent), and apartment units (+1.0 per cent).

Year-over-year price growth in the aggregate MLS® HPI for all Benchmark property types combined was mixed across the markets tracked by the index.

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PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 106,000 REALTORS® working through more than 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

The Bank of Canada kept its key policy rate at 1 per cent on April 17^th 2013. It has been unchanged at this level for more than two and a half years.

In its April policy rate announcement, the Bank lowered its forecast for Canadian economic growth to 1.5 per cent this year. Its previous forecast published in January predicted growth of 2 per cent in 2013.

The Bank’s new forecast is in line with the recently downgraded outlook issued by the International Monetary Fund and is slightly more pessimistic than the consensus forecast by private sector economic forecasts.

The Bank still expects growth to pick up later this year, but pushed the improvement further out into the second half of 2013. For 2014, the Bank is forecasting growth of 2.8 per cent, up slightly from the previous forecast of 2.7 per cent, with similar growth of 2.7 per cent in 2015.

The Bank also lowered its forecast for inflation, and extended how long it expects it to remain below the inflation target of 2 per cent (i.e. mid-2015). This represents a considerable shifting of the goalposts; only three months earlier, the Bank projected that this would happen sometime in the second half of 2014.

Much of the rest of the Bank’s April policy rate announcement reiterated its views communicated in its previous statement in March. Notably, the Bank is more comfortable about trends for household debt and the housing sector, describing developments in the latter as “constructive”.

The bottom remains that interest rates this year are going nowhere fast. What’s new is that they’re not likely to be going to be going anywhere fast throughout all of 2014 either, particularly given that inflation expectations remain extremely well anchored.

The Bank does not want to be seen as changing its tune too dramatically, or fuelling expectations that it might even be forced to cut rates. For that reason, the Bank indicated that its next move will likely be to raise interest rates, albeit not for some time. That said, that’s now so far into the future that the Bank is really saying is “we’re not going to raise interest rates.”

As of April 17^th, 2013, the advertised five-year lending rate stood at 5.14 per cent, down 0.1 percentage points from the previous Bank rate announcement on March 6^th. The five-year rate had previously remained at 5.24 per cent since the beginning of June 2012.

(CREA 04/17/2013)

Ottawa, ON, April 15, 2013 – According to statistics released today by The Canadian Real Estate Association (CREA), national home sales edged upward on a month-over-month basis in March 2013 but stayed well below levels recorded one year ago. 

Highlights:

• National home sales rose 2.4% from February to March.
• Actual (not seasonally adjusted) activity came in 15.3% below levels in March 2012.
• The number of newly listed homes was up 3.2% from February to March.
• The Canadian housing market remains firmly in balanced territory.
• The national average sale price rose 2.5% on a year-over-year basis in March.
• The MLS® HPI rose 2.2% in March, its smallest gain in more than two years.

The number of home sales processed through the MLS® Systems of real estate Boards and Associations and other co-operative listing systems in Canada rose 2.4 per cent on a month-over-month basis in March 2013.

Home sales improved in more than half of all local markets from February to March, led by gains in Greater Vancouver, Fraser Valley, Calgary, Greater Toronto, Montreal, Saskatoon, Hamilton-Burlington, and Kitchener-Waterloo.

“National sales have been holding fairly stable since last summer,” said CREA President Laura Leyser. “We’ll be watching closely as the spring market picks up to see whether the March sales increase marks the beginning of an improving trend. In the meantime, it’s important to remember that local market conditions often can and do differ from what’s reported at the national level, so buyers and sellers really should speak to their REALTOR® to understand how the housing market is shaping up where they live or might like to.”

Sales in March were constrained by the Easter holiday and an extra full weekend at the end of the month, the latter of which is known as a “trading day effect,” and both of which generally result in sales being held back. Seasonal adjustment strips out normal seasonal fluctuations and trading day effects that otherwise affect the data. It puts data on an equal footing so that data for any two months can be meaningfully compared to each other and to underlying economic fundamentals.

“Easter and trading day factors combined effectively to cut March sales short,” said Gregory Klump, CREA’s Chief Economist. “Activity in the months ahead will reveal whether the monthly improvement in seasonally adjusted March sales reflects technical seasonal adjustment factors or a fundamental improvement in demand.”

“That said, the factors that crimped March sales this year were not in play for the same month last year, resulting in speculation that the gap between sales activity this March and March of last year would be bigger than it was in February. That the gap in fact improved marginally speaks to the resilience of housing demand in Canada,” Klump said.

Actual (not seasonally adjusted) activity came in 15.3 per cent below levels reported in March 2012, compared to a year-over-year decline in February sales of 15.9 per cent. Although transactions remained down from year ago levels in more than 90 per cent of all local markets, the gap diminished in a number of large urban markets including Greater Vancouver, Calgary, Regina, Saskatoon, Montreal, and Quebec City. As was the case in February, Edmonton was the only large urban market in which monthly sales surpassed year-ago levels.

“Analysis will likely continue to focus on how sales remain down from last year, but this shouldn’t come as a surprise given that mortgage regulations and lending guidelines at that time were yet to be tightened,” said Klump. “Since those factors came into force, national home sales have held fairly steady, notwithstanding the rise in seasonally adjusted March sales.”

The number of newly listed homes rose 3.2 per cent month-over-month in March. New listings were up in about two thirds of all local markets, led by Greater Toronto, Montreal, London and St. Thomas, and Calgary.

With sales and new listings having climbed in tandem, the national sales-to-new listings ratio was little changed at 49.9 per cent in March compared to 50.3 per cent in February. This measure has held fairly steady around this level for the past eight months. Based on a sales-to-new listings ratio of between 40 to 60 per cent, slightly over 60 per cent of all local markets were in balanced market territory in March.

The number of months of inventory is another important measure of balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity, and it too was little changed in March.

Nationally, there were 6.5 months of inventory at the end of March 2013. This was down from 6.7 months reported at the end of February, resulting from the increase in sales combined with a third consecutive decline in the overall supply of homes for sale. “The number of months of inventory remains elevated but stable in the wake of recent changes to mortgage rules and lending guidelines,” said Klump.

The actual (not seasonally adjusted) national average price for homes sold in March 2013 was $378,532, representing an increase of 2.5 per cent from the same month last year.

Fewer sales compared to year-ago levels in Greater Vancouver and Greater Toronto continue exerting a gravitational pull on the national average sale price, but price gains in Calgary and Edmonton are increasingly putting upward pressure on the national average.

As evidence of this, excluding Greater Vancouver and Greater Toronto from the national average price calculation yields a year-over-year increase of 4.3 per cent, while only excluding Calgary and Edmonton yields a year-over-year increase of just 1.9 per cent.

The MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales the way that average price is. For that reason, it provides the best gauge of Canadian home price trends.

The Aggregate Composite MLS® HPI rose 2.2 per cent on a year-over-year basis in March. This marks the eleventh time in as many months that the year-over-year gain shrank and the slowest rate of increase in more than two years.

Year-over-year price gains decelerated for all Benchmark property types tracked by the index. Price growth remained strongest for one-storey single family homes (+3.4 per cent), followed by two-storey single family homes (+2.5 per cent), townhouse/row units (+2.1 per cent), and apartment units (+0.4 per cent).

Year-over-year price growth in the aggregate MLS® HPI for all Benchmark property types combined also slowed in all markets tracked by the index.

The MLS® HPI again rose fastest in Calgary (+7.7 per cent), followed by Regina (+4.2 per cent), Greater Toronto (+2.9 per cent), Greater Montreal (+2.0 per cent), and the Fraser Valley (+0.1 per cent). In Greater Vancouver, the MLS® HPI slipped further into negative territory, posting a 3.9 per cent year-over-year decline in March.

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PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 106,000 REALTORS® working through more than 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

SAN FRANCISCO – April 9, 2013 – DocuSign, the real estate industry standard for eSignature, announced that it has entered into an agreement with The Canadian Real Estate Association (CREA) for DocuSign to become a provider of electronic signatures for its more than 105,000 members nationwide. DocuSign helps agents and their clients close deals faster by eliminating the hassles and costs of printing, faxing, scanning and driving around town to get signatures.

Through the partnership, DocuSign is available in both French and English at pricing exclusive to CREA members. The offering also includes enhanced DocuSign’s integration with WEBForms®, the leading provider of electronic forms in Canada, to facilitate use of forms and eSignature together to provide greater ease and convenience for agents, buyers and sellers.

“As a national organization, CREA partners with industry leaders that offer powerful new ways for our members to become more efficient and better achieve their business objectives,” said Marc Lafrance, Director of Member Services and Product Development, CREA. “We’re pleased DocuSign offers our members a choice for eSignature to accelerate their business results.”

“CREA continues to deliver real value by offering technology that helps its members delight their clients with a better, faster, more convenient process for buying and selling property,” said Tom Gonser, chief strategy officer, DocuSign. “DocuSign is proud to be an eSignature solution for CREA and its members.”

DocuSign’s electronic signature solution helps real estate professionals:

• Save time & money – DocuSign eliminates the need for printing, faxing, scanning and driving across town to get signatures so documents are signed online in minutes, not days.
• Gain visibility & control – DocuSign lets agents see who has signed documents when, and stores the documents in the cloud for easy access by all signing parties.
• Enhance client satisfaction & loyalty – DocuSigning is easy and fast so home buyers and sellers can conveniently sign anytime, anywhere, on any device.

CREA members can take advantage of exclusive pricing on DocuSign by visiting REALTORLink® or www.docusign.com.

Ottawa, ON, March 15, 2013 – According to statistics released today by The Canadian Real Estate Association (CREA), national home sales activity edged back down on a month-over-month basis in February 2013 following an increase in January. 

Highlights:

• National home sales declined 2.1% from January to February.
• Actual (not seasonally adjusted) activity came in 15.8% below levels in February 2012.
• The number of newly listed homes fell 1.2% from January to February.
• The Canadian housing market remains firmly in balanced territory.
• The national average sale price was down 1% on a year-over-year basis in February.
• The MLS® HPI rose 2.7% in February, the smallest gain since March 2011.

The number of home sales processed through the MLS® Systems of real estate Boards and Associations and other cooperative listing systems in Canada fell 2.1 per cent on a month-over-month basis in February 2013. The decline reversed the small gain recorded in January, leaving sales slightly below levels seen in recent months. National activity has generally held steady near current levels since it initially geared down in August in the wake of tighter mortgage lending rules and guidelines.

Home sales picked up in just under half of all local markets from January to February, but small declines in the very large markets of Greater Toronto and Montreal combined with larger declines in the large and medium sized markets of Greater Vancouver and Winnipeg tipped the balance nationally to the downside.

“A rebound in sales in some of Canada’s largest and most expensive markets, similar to those we saw following previous mortgage rule changes, has so far remained elusive,” said CREA President Wayne Moen. “That said, the slowdown in many big markets is being offset by activity in many smaller and more affordable markets that were less impacted by last year’s mortgage rule changes. This serves as a reminder that all real estate is local. Buyers and sellers should speak to their REALTOR® to understand how the housing market is shaping up where they live or might like to.”

Actual (not seasonally adjusted) activity came in 15.8 per cent below levels reported in February 2012. Almost 80 per cent of local markets posted year-over-year declines in sales activity in February, the most notable exception being Edmonton.

“February 2012 saw an extra selling day due to the leap year. However, the year-over-year decline between this February and last year is largely a reflection of demand that is well off from 2012,” said Gregory Klump, CREA’s Chief Economist. “The cooling off of the housing market resulted from tighter mortgage rules and guidelines coming into force in mid-July last year, with most of the decline in the sales occurring in August. Since then, sales activity has been flying at a lower altitude but has not shown much in the way of further deterioration. Until we get well into the summer months, year-over-year comparisons to months in the first half of 2012 are predictably going to be down significantly but not necessarily be indicative of further deterioration. Rather, year-over-year comparisons will continue to reflect the long shadow cast by higher sales prior to last summer’s policy tightening. Looking at the monthly trend since then shows that we’ve been seeing reasonably stable trends for demand and prices.”

The number of newly listed homes fell 1.2 per cent month-over-month in February, leaving them at their lowest level since November 2010. New listings have been trending down in tandem with a slowdown in demand. This has kept the housing market in balanced territory and held the overall number of homes for sale in check.

New listings were down in about 60 per cent of local markets in February, with the largest declines reported in Greater Toronto, Montreal, Greater Vancouver, and Saskatoon.

With sales and new listings having both edged lower, the national sales-to-new listings ratio was little changed at 50.2 per cent in February compared to 50.7 per cent in January. This reading has held fairly steady around this level for the past seven months. Based on a sales-to-new listings ratio of between 40 to 60 per cent, about 60 per cent of all local markets were in balanced market territory in February.

The number of months of inventory is another important measure of balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity, and it too was little changed in February.

Nationally, there were 6.8 months of inventory at the end of February 2013, up from 6.6 months reported at the end of January.

The actual (not seasonally adjusted) national average price for homes sold in February 2013 was $368,895, representing a one per cent decline from the same month last year. There were fewer sales compared to year ago levels in relatively pricey Greater Vancouver, which continues to exert a strong gravitational pull on the national average sale price. Excluding Greater Vancouver – which currently accounts for less than six per cent of national activity – from the national average price calculation yields a year-over-year increase of 1.3 per cent.

Unlike average price, the MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales, so it provides the best gauge of Canadian home price trends.

The Aggregate Composite MLS® HPI rose 2.7 per cent on a year-over-year basis in February. This marks the tenth time in as many months that the year-over-year gain shrank and the slowest rate of increase since March 2011.

Year-over-year price gains decelerated for one-storey single family homes (+4.2 per cent), two-storey single family homes (+2.9 per cent), and apartment units (+0.8per cent). In contrast, year-over-year price growth picked up for the fifth straight month in the townhouse/row segment (+2.4 per cent).

The MLS® HPI rose fastest in Calgary (+8.0% year-over-year), marking some of the strongest price growth that city has seen since the spring of 2010.

Price growth moderated in Greater Toronto (+3.2% year-over-year) and the Fraser Valley (+0.4% year-over-year), while accelerating slightly in Greater Montreal (+2.7 per cent).

In Greater Vancouver, the MLS® HPI slipped further into negative territory, posting a 3.3 per cent year-over-year decline in February.

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PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 106,000 REALTORS® working through more than 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics

Ottawa, ON, March 15, 2013 – The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service^® (MLS^®) Systems of Canadian real estate Boards and Associations in 2013 and extended the outlook to include 2014.

National sales activity has held fairly stable after gearing down last August in the wake of changes to mortgage lending rules and guidelines. Supply is responding to lower demand, keeping the housing market in balanced territory and resulting in stable average prices. However, national housing market trends continue to mask some increasingly divergent regional trends.

Sales activity in the second half of 2012 geared down by more than previously anticipated in some housing markets, resulting in a downward revision to the national sales forecast for 2013. The continuation of low interest rates will remain supportive for housing activity and prices this year and next year. Sales are still expected to improve later this year in tandem with stronger economic growth.

National sales activity is forecast to reach 441,500 units in 2013. This represents a 2.9 per cent decline from 454,573 sales in 2012, and stands five per cent below the 10-year average (2003 – 2012). It was also a downward revision from the previous forecast for a 2.0 per cent decline.

Alberta and Manitoba are the only provinces where sales are expected to rise in 2013, albeit modestly. The percentage decline in sales in Saskatchewan, Ontario, Quebec, and Nova Scotia is forecast to exceed the national result this year. The percentage decline in sales in British Columbia, New Brunswick, and Newfoundland and Labrador is forecast to be less than the national result.

Strong sales in the first half of last year will cast a long shadow over year-over-year comparisons during the first half of 2013 in many parts of the country. The smaller annual decline being forecast for British Columbia and New Brunswick reflects a weakening trend in these provinces during the first half of 2012 that was not apparent elsewhere.

In 2014, CREA forecasts that national activity will rebound by 4.5 per cent to 461,200 units, reflecting a slow but steady improvement in activity. This would still leave national sales about one per cent below their 10-year-average, with activity not expected to return to levels recorded in the first half of 2012 at any point in the forecast horizon.

British Columbia is forecast to see the strongest sales increase in 2014 (+9.5%), albeit from a low base, with most other provinces forecast to post gains in the range between three and five per cent as the continuation of moderate economic, job, population, and income growth offsets small and gradual interest rates increases next year.

“All real estate markets are local, with prospects that can and do differ by region and community,” said Wayne Moen, CREA President. “For that reason, buyers and sellers should talk to their REALTOR^® about the housing market outlook where they live or would like to live.”

“Mortgage rules are expected to remain as they are, so sales should be less volatile than they have been in recent years,” said Gregory Klump, CREA’s Chief Economist. “Interest rates are also expected to remain low as the economy grows and adds jobs, which is supportive for the resale housing market.”

The national average home price is projected to edge down by 0.2 per cent to $362,600 in 2013. This is slightly lower than was previously forecast. While largely flat at the national level, gains in excess of inflation are still expected in the Prairies and in Newfoundland. British Columbia, Ontario, and New Brunswick are forecast to record declines in their provincial average prices this year.

The national average price is forecast to edge back up by 1.7 per cent to $368,700 in 2014. As in 2013, Alberta, Newfoundland, and to a lesser extent Saskatchewan and Manitoba are forecast to see the biggest gains. The forecast increase in the national average price in 2014 reflects a modest rebound in British Columbia, where its provincial share of national sales will return closer to normal and lift the national average price.

The Bank of Canada kept its key policy rate at 1 per cent on March 6^th 2013. It has been unchanged at this level for more than two years, marking the longest period since the early 1950s that rates have been left untouched.

Many economists had expected the Bank to soften its language amid a spate of disappointing economic news in recent weeks; however, Governor Carney has cautioned against over-emphasizing shorter-term data, and today’s announcement echoed that view by addressing recent weak readings in a number of indicators as “recent volatility”.

While the Bank did maintain its previous guidance that the next move will likely be a rate hike, one way in which the Bank did take a more dovish stance was by way of what it did not say this time, namely the warning it issued in January that higher rates might be required if consumers continued to accumulate debt.

This was an indication that the Bank is becoming more comfortable with consumer debt and the housing market. The Bank referred to recent developments in the housing sector as “constructive”, and reiterated its expectation that household credit growth would continue to moderate, with the household debt-to-income ratio stabilizing near current levels.

Despite the weak, though largely expected reading for Canadian economic growth in the fourth quarter of 2012, the Bank said it still expects Canadian economic growth to pick up through 2013 driven by “solid business investment” and “a recovery in exports”.

The Bank said its expectations for overall fiscal drag coming from the U.S. over the next two years were largely unchanged, although it is now likely to be more front-loaded owing to sequestration spending cuts. This, combined with the weak handoff for growth from late 2012 into 2013, could mean a downgrade to the Bank’s current forecast for growth of 2 per cent this year; however that forecast will not be revisited until the Bank’s next Monetary Policy Report slated for release on April 17^th.

Inflation has recently been lower than previously expected, and is expected to remain subdued in the months ahead before gradually rising to reach the 2 per cent target “over the projection horizon”, which would be sometime in 2014.

All that said the bottom line remains unchanged, namely that economic growth is expected to remain modest but positive, consistent with low inflation and low interest rates. Growth in household debt burdens, which the Bank has repeatedly flagged as a major risk in this low interest rate environment, continues to show positive signs of topping out as housing market activity continues to stabilize at a more sustainable levels.

At the same time, expectations for inflation remain extremely well anchored, so the Bank will be in no hurry to raise interest rates anytime soon. At this point, the first such policy move not likely until 2014 at the earliest, and even that assumes that some of the more recent developments are simply a temporary soft patch, which remains to be seen.

As of March 6th, 2013, the advertised five-year lending rate stood at 5.24 per cent. It has been unchanged at this level since the beginning of June 2012.

(CREA 03/06/2013)