Some people will never be convinced, but yesterday federal finance minster Joe Oliver again repeated the government’s opinion: “We don’t think there’s a bubble.” He said that the CMHC and the Organization for Economic Cooperation and Development agree. Oliver said the government is monitoring the situation regarding the housing market and levels of personal debt, especially with interest rates trending lower, but they do not see a major concern currently and believe that people are not buying homes they can’t afford. The finance minister was also asked for his opinion on the banks reducing their lending rates by less than that of the central bank, but he would only say that it is a “private sector decision.”
Analysts confident of another rate cut in March
Disappointing data from Statistics Canada that show a weaker labour market in 2014 than previously thought has increased anticipation of another cut in interest rates. With the impact of lower oil prices on inflation and concern over the global economy there has already been talk of further reductions, with economists, including those from TD Bank, expecting the BoC to cut the rate again when they meet in March.