Canadian Interest rates have 'nowhere to go but up'

June 26, 2011 - PRLog -- | www.preigCanada.com | www.WorldWealthBuilders.com | Jun. 26, 2011|

"Interest rates have nowhere to go but up." Finance Minister of Canada Jim Flaherty said. Warning about the dangers of unchecked debt on both a global and household scale, Jim Flaherty on Sunday said Europe and the U.S. must do more to restore stability in their own backyards -- just as Canadians must tread carefully when taking on long-term debt like mortgages.

“Bank of Canada and Finance minister warning Canadians to get ready for interest rate hike” says Navtaj Chandhoke, founder of Professional Real Estate Investors Group  (PREIG) Canada.

Flaherty's remarks echo those of a Bank of Canada report last week that said high household debt is now the most significant risk to the Canadian economy.

The report came one day after Statistics Canada noted that "rock-bottom" interest rates are luring more Canadians deeper into debt. The ratio of household debt rose to 149.47 per cent in the first quarter of 2011, meaning Canadians owe $1.49 for every after-tax dollar they earn.

Still, data showed Canadian households continued to dig themselves further into debt in the first quarter as more people took out mortgages at ultra-low rates, according to Statistics Canada.

Despite the uncertainties in the global economy, trouble in North Africa, economy of Greece, Spain, Portugal, Italy and Ireland can Canada and other countries could be hurt.
“The Real Estate market—the sector that led Canada out from recession—will cool further in coming months because of the new mortgage rules and higher borrowing costs.” says Navtaj Chandhoke.

Finance Minister Jim Flaherty said he continues to monitor the country's housing market, which has some "hot spots", but said the situation remained stable.

Last week, housing figures from the Canadian Real Estate Association (CREA) showed home resale prices slipped 0.6 percent in May from April, partly because of the effect of stricter mortgage rules that came into effect in the spring. It was the first full month of data that reflected the new rules.

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Navtaj Chandhoke is a Canadian-based real estate investor, speaker, author, educator and the founder of World Wealth Builders, leading RE investors education,mentoring, support and network of over 4545+ Canadian investors.
www.WorldWealthBuilders.com