[et_pb_section fb_built=”1″ _builder_version=”4.8.2″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.8.2″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.8.2″ _module_preset=”default” global_colors_info=”{}”][et_pb_text admin_label=”YouTube iFrame” _builder_version=”4.8.2″ _module_preset=”default” global_colors_info=”{}”][/et_pb_text][et_pb_text admin_label=”Calendly 20 Min Call Form” _builder_version=”4.8.2″ _module_preset=”default” global_colors_info=”{}”]
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.8.2″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.8.2″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.8.2″ _module_preset=”default” global_colors_info=”{}”][et_pb_text admin_label=”Vlog Text” _builder_version=”4.8.2″ _module_preset=”default” global_colors_info=”{}”]It was only a month ago that we collectively looked back at 2020 and thought “well, THAT was a crazy ride!”
Then January 2021 started.
Our neighbours to the south saw a rocky transition of power between presidents. The pace of COVID-19 deaths picked up in Alberta. Hundreds of families lost loved ones in the past month. But, Thankfully due to the collective efforts of all Albertans, that is trending back down and we are starting to see some re-reopening of our economy.
The strong showing in the housing market through the last half of 2020 continued into January. Our team has had our busiest January ever and there are no signs of slowing down.
On January 20th, the Bank of Canada made its first rate announcement of the year, and of course, there is no surprise that they kept the overnight rate at 0.25%. There was some speculation that the Bank might deviate from it’s usuall quarter percent rate moves, and do a micro cut to the rate while not actually getting to zero percent, but ultimately, that did not happen.
The Bank also released it’s first quarterly Monetary Policy Report of the year while pledging to continue to support market liquidity through its quantitative easing program.
No surprise, the recent surge of COVID cases and deaths across the country have been a set back from the improved momentum we had toward the end of 2020 and as a result, for the first quarter of this year, negative growth is expected in spite of the 5 and a half percent decline in real GDP we saw in 2020.
All this said, the bank is expecting upwards of a 4-5% economic growth recovery this year. The bank is crediting the earlier than expected release of vaccines, and in spite of supply struggles, Canada does have a lot of supply on the way over the coming months. The vaccination program is generally accepted to be the way out of the pandemic, both domestically here in Canada, and internationally as well. Most of these economic assumptions and projections rely on a successful vaccination roll out in Canada, and other advanced economies around the world for a broad herd immunity by the end of the year.
That same 4-5% growth projected for Canada is also expected globally both this year and next – but of course, the future hasn’t happened so we will see how accurate these forecasts are over time!
It is highly likely that interest rates will remain low for quite a while. Whether you are considering a home purchase this year or if you have a mortgage renewal coming up in the next year, you can reasonably expect a very low interest rate throughout the entire year.
RBC Economics projects that home values will increase in all provinces this year, with Alberta sitting at about a 1% increase in property value. The market is, of course, very sensitive to interest rates, and for as long as rates stay low, we can expect to see a healthy housing demand. Given the high level of borrowing by our governments in response to COVID-19, growth targets are likely to increase since inflation is the government’s best friend for paying off debt. To encourage this inflation, we can expect continued low rates for quite some time.
As always, I want you to know that my team and I are committed to you. We are here to support you in whatever you hope to do! If you are looking for any advice, are looking to make a plan to become a homeowner for the first time, or are looking for direction on what to do with a mortgage you already have, let me know. Book a time to chat with me using the form below this video and we can start to figure out what your best plan looks like.[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]