Bank of Canada Cuts Rate to 1.5%

The Bank of Canada has reduced it's over night lending rate three-quarters of a point to 1.5%, the lowest level in half a century. Commercial banks, such as TD Bank, the first to take action, and CIBC have responded by reducing it's prime lending rate to only 3.5%.

The Bank of Canada's next scheduled date for announcing the over night rate target is January 20, 2009.

Bank of Canada
The Canadian Press

Home Prices Down; Affordability Improves in BC

According to the latest British Columbia Real Estate Association (BCREA) report, residential sales by dollar volume declined by 39 per cent to $2.1 billion in September, compared to September 2007. Residential unit sales were down 34 per cent to 5,107 units during the same period. The average MLS® residential price in the province was $412,149, down 7 per cent from September 2007.

“Weaker consumer demand and a large number of homes for sale are having an impact on home prices in the province,” said Cameron Muir, BCREA Chief Economist. “Despite relatively strong fundamentals, consumer confidence is low. The global liquidity crisis and volatile equity markets are intensifying this sentiment, causing many households to pull back spending on major purchases.”

“However, affordability is improving,” added Muir. “The carrying cost of the average home in the province is now lower than at any time since the end of 2006.”