Bank of Canada Interest Rate Announcement - June 3, 2020

Bank of Canada Interest Rate Announcement - June 3, 2020

The Bank of Canada held its overnight rate at 0.25 percent this morning, a level it considers it's effective lower bound. In the statement accompanying the decision, the Bank noted that incoming data seems to signal that the impact of COVID-19 on the economy has peaked, though there remains significant uncertainty regarding the outlook. The Bank further commented that the Canadian economy appears to have avoided the most severe scenario the Bank had previously presented as a possible outcome of COVID-19, though it does expect a 10-20 percent decline in the level of GDP in the second quarter.  However, positive growth is expected to resume in the third quarter.

Like the Bank, BCREA is projecting that the Canadian, and BC economy will start to recover in the third quarter.  Positive signs of recovery are emerging in the housing market, with sales and listings activity improving from April lows.  Actions by the Bank of Canada have helped ease rising once risk premiums, leading to 5-year mortgage rates falling to near record lows.  Those low rates, along with building pent-up demand should lead to a healthy recovery in home sales over the next 12 months.

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BCREA is the professional association for more than 23,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province’s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research, and standard forms to help REALTORS® provide value for their clients.

To demonstrate the profession's commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.