Interest Rates and Real Estate

Bank Canada: However, the bank says there could be a "severe" downturn in the real estate market if employment plunges due to a deep recession or if interest rates surge dramatically, according to CTV. Meanwhile, RBC says the economic shock from lower oil prices hasn't been big enough to derail Canada overall real estate sector. The report pegs the risk of an outright crash in real estate as low, saying RBC expects the economy to grow and that interest rates will likely rise gradually starting next year. In fact, it says the Canadian housing market is poised to post one of its best years on record despite a drop in home resale activity in the oil-sensitive provinces of Alberta and Saskatchewan. In July, the Bank of Canada cut its overnight lending rate -- which affects variable-rate mortgages and other products -- by 25 basis points to 0.5 per cent. RBC says rock-bottom interest rates have fuelled demand for housing elsewhere, particularly in Ontario and British Columbia. (www.immigrantscanada.com). As reported in the news.