The Bank of Canada announced on Tuesday that it will cut the key benchmark interest rate charged to banks. The rate cut, at half a point, is a signal that the Canadian economy may be hitting a rough spot as its largest trade partner, the United States, slides near recession levels.
The Bank said that the cut was necessary to offset the slump in exports to the United States. The rate dropped to a two year low of 3.5%, and this marked the largest reduction in the last eight years. Additionally, the central bank said that it may be necessary to supply the country with more stimulus in the near future, indicating that the cut may not be enough to get the country caught up given the drop in exports to the United States.
Still, the Canadian Real Estate Association said that the country's housing market was doing well. According to the group, listings on the MLS (Multiple Listing Service) have totaled 520,747 in 2007 which is a record. This was an increase of 7.6% over 2006.
As reported by AOL Money Canada, Canadian Real Estate Association President Ann Bosley had this to say. "The results in 2007 show the strength and the affordability of the Canadian residential market. The statistics again show just how different the housing markets are in Canada and the United States. Canadian realtors know that Canadian mortgage lenders correctly see that home prices will continue to rise."
