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The Bank of Canada announced on December 2^nd, 2015 that it was keeping its trend-setting target overnight lending rate at 0.5 per cent.

Helped by interest rate cuts earlier this year, the Canadian economy rebounded in the third quarter of 2015 from two previous consecutive quarters of negative economic growth. However, the Bank expects “[economic] growth to moderate in the fourth quarter of 2015 before moving to a rate above potential in 2016.”

The Bank’s latest Monetary Policy Report published in October pegged the rate of potential Canadian economic growth in 2016 somewhere in the range 1.4% to 2.2% and forecast economic growth above that starting in the second quarter of 2016. Time will tell whether the Bank will need to further downgrade the outlook for economic growth, as it has repeatedly in recent years.

Economic growth and inflation outlooks are crucial to the timing for when the Bank will begin to raise interest rates.

In recent months, Canadian economic growth has gained strength in non-resource sectors, which are getting a boost from a weaker Canada-U.S. currency exchange rate. By contrast, resource and their supporting industries continue to face major headwinds, with oil-producing regions contending with weak oil prices, lower investment and job layoffs.

Headline inflation continues to trend near the bottom of the Bank’s target range of between 1 and 3 per cent due to persistently low oil prices. Core inflation (which strips out the most volatile price components of overall inflation) remains on target. Below the surface, the inflationary impact of the lower Canadian dollar is being offset by a growing disinflationary gap between actual and potential economic growth.

Based on the Bank’s current forecast for economic growth and inflation, financial markets are currently betting that the Bank of Canada will keep interest rates on hold throughout 2016.

As of December 2^nd, 2015, the advertised five-year lending rate stood at 4.64 per cent, unchanged from the previous Bank rate announcement on October 21^st, and down 0.15 percentage points from one year ago.

The next interest rate announcement will be on January 20^th 2016, with the next update to the Monetary Policy Report released on the same date.

(CREA 2/12/2015)

The Bank of Canada announced on July 15^th, 2015 that it was lowering its trend-setting target overnight lending rate from 0.75 per cent to 0.50 per cent. The move follows another cut of the same size in January.

The Bank indicated that it expects the Canadian economy shrank modestly in the first half of the year but has begun to rebound and will gain steam. While its decision to lower interest rates is aimed at supporting business investment and exports, revisions to the Bank’s economic forecast also indicate that lower interest rates will also boost consumer spending and housing activity.

The Bank of Canada also pared back its inflation outlook due to a number of factors which are unlikely to reverse themselves in the near future. That means short-term interest rates are almost certain to remain on hold this year and over 2016.

Recall that when the Bank of Canada previously cut interest rates by a quarter of a percentage point in January, Canada’s largest private banks lowered their lending rates by less than that. The same will likely hold true this time around. Accordingly, the Bank of Canada’s most recent interest rate cut is unlikely to cause consumer borrowing and mortgage lending to catch fire, especially given the currently high level of household debt.

The bottom line has shifted from “lower for longer” to “even lower for even longer”. All other things being equal, this is even more supportive for the housing market.

As of July 15^th, 2015, the advertised five-year lending rate stood at 4.64 per cent, unchanged from the previous Bank rate announcement on May 27^th, and down 0.15 percentage points from one year ago.

The next interest rate announcement will be on September 9^th, 2015 and the next update to the Bank of Canada’s economic forecast will be on October 21^st 2015.

(CREA 07/15/2015)

Highlights:

• National home sales rose 3.1% from April to May.
• Actual (not seasonally adjusted) activity stood 2.7% above May 2014 levels.
• The number of newly listed homes was little changed from April to May.
• The Canadian housing market remains balanced overall.
• The MLS® Home Price Index (HPI) rose 5.17% year-over-year in May.
• The national average sale price rose 8.1% on a year-over-year basis in May; excluding Greater Vancouver and Greater Toronto, it increased by 2.4%.

The number of home sales processed through the MLS® Systems of Canadian real estate

Boards and Associations rose 3.1 per cent in May 2015 compared to April. This marks the fourth consecutive month-over-month increase and raises national activity to its highest level in more than five years. (Chart A)

May sales were up from the previous month in about 60 per cent of all local markets, led by increases in the Greater Toronto Area, Calgary, Edmonton, Ottawa and Montreal.

“CMHC announced in April that effective June 1 it was hiking mortgage default insurance premiums for homebuyers with less than a 10% down payment, so some buyers may have jumped off the fence and purchased in May to beat the increase,” said CREA President Pauline Aunger. “It’s one of the factors that could have affected sales last month. That said, all real estate is local, with trends that reflect a combination of local and national factors. REALTORS® remain your best source for information about sales and listings where you live or might like to in the future.”

“Sales in and around the Greater Toronto area played a starring role in the monthly increase in May sales,” said Gregory Klump, CREA’s Chief Economist. “At the same time, the rebound in sales over the past few months in Calgary and Edmonton suggests that heightened uncertainty among some home buyers in these housing markets may be easing.”

Actual (not seasonally adjusted) activity in May 2015 stood 2.7 per cent above levels reported for the same month last year and 5.7 per cent above the 10 year average for the month.

Sales were up on a year-over-year basis in about half of all local markets, led by activity in the Lower Mainland of British Columbia, Greater Toronto and Montreal.

The number of newly listed homes was virtually unchanged (-0.2 per cent) in May compared to April. This reflects an even split between housing markets where new listings rose and where they fell, with little monthly change for new listings in most of Canada’s largest and most active urban markets.

The national sales-to-new listings ratio was 57.6 per cent in May, up from a low of 50.4 per cent in January when it reached its most balanced point since March 2013. The ratio has risen steadily along with sales so far this year as new supply has remained little changed.

A sales-to-new listings ratio between 40 and 60 per cent is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in about half of local housing markets in May. About a third of local markets were above the 60 per cent threshold in May, comprised mostly of markets in and around the Greater Toronto Area and markets in British Columbia.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

The national balance between supply and demand has tightened since the beginning of the year, when buyers had more negotiating power than they had in nearly two years. There were 5.6 months of inventory on a national basis at the end of May 2015, its lowest reading in three years.

The Aggregate Composite MLS® HPI rose by 5.17 per cent on a year-over-year basis in May, up slightly from the 4.97 per cent year-over-year gain logged in April. Gains have generally held to the range from five to five and a half per cent since the beginning of 2014. (Chart B)

Year-over-year price growth accelerated in May in all Benchmark home categories tracked by the index with the exception of one-storey single family homes.

Two-storey single family homes continue to post the biggest year-over-year price gains (+7.18 per cent), with more modest increases for one-storey single family homes (+4.11 per cent), townhouse/row units (+4.09 per cent) and apartment units (+2.91 per cent).

Year-over-year price growth varied among housing markets tracked by the index. Greater

Vancouver (+9.41 per cent) and Greater Toronto (+8.90 per cent) continued to post by far the biggest year-over-year price increases. By comparison, Fraser Valley, Victoria, and Vancouver Island prices all recorded year-over-year gains of about four per cent in May.

Price gains in Calgary continued to slow, with a year-over-year increase of just 1.21 per cent in May. This was the smallest gain in more than three years and the eleventh consecutive monthly slowdown in year-over-year price growth.

Elsewhere, prices held steady on a year-over-year basis in Saskatoon and Ottawa, rose slightly in Greater Montreal and fell by about three per cent in Regina and Greater Moncton.

The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.

The actual (not seasonally adjusted) national average price for homes sold in May 2015 was $450,886, up 8.1 per cent on a year-over-year basis.

The national average home price continues to be upwardly distorted by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. If these two markets are excluded from calculations, the average is a more modest $344,988 and the year-over-year gain is reduced to 2.4 per cent.

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PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 109,000 REALTORS® working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca

Highlights:

• National home sales rose 2.3% from March to April.
• Actual (not seasonally adjusted) activity stood 10% above April 2014 levels.
• The number of newly listed homes was little changed from March to April.
• The Canadian housing market overall remains balanced.
• The MLS® Home Price Index (HPI) rose 4.97% year-over-year in April.
• The national average sale price rose 9.5% on a year-over-year basis in April; excluding Greater Vancouver and Greater Toronto, it increased by 3.4 %.

The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations rose 2.3 per cent in April 2015 compared to March. This marks the third consecutive month-over-month increase and raises national activity back to where it was during most of the second half of last year.

April sales were up from the previous month in two-thirds of all local markets, led by the Greater Toronto Area, the surrounding Golden Horseshoe region, and Montreal.

“As expected, low mortgage interest rates and the onset of spring ushered many homebuyers off the sidelines, particularly in regions where winter was long and bitter,” said CREA President Pauline Aunger. “All real estate is local and REALTORS® remain your best source of information about sales and listings where you live or might like to in the future.”

“In recent years, the seasonal pattern for home sales and listings has become amplified in places where listings are in short supply relative to demand,” said Gregory Klump, CREA’s Chief Economist. “This particularly stands out in and around Toronto. Sellers there have increasingly delayed listing their home until spring. Once listed, it sells fairly quickly. Sales over the year as a whole in Southern Ontario are likely being constrained to some degree by a short supply of single family homes. However, the busy spring home buying and selling season has become that much busier as a result of sellers waiting until winter has faded before listing.”

Actual (not seasonally adjusted) activity in April stood 10.0 per cent above levels reported in April 2014. This marks just the third time ever that sales during the month of April topped 50,000 transactions.

Sales were up on a year-over-year basis in about 70 per cent of all local markets, led by activity in the Lower Mainland of British Columbia, Greater Toronto, and Montreal. Of the 18 local markets that set new records for the month of April, all but two are in Southern Ontario.

The number of newly listed homes was virtually unchanged (+0.1 per cent) in April compared to March. Below the surface, new supply rose in almost two thirds of all local markets, led by a big rebound in Halifax-Dartmouth following a sharp drop in March. This was offset by declines in Greater Vancouver, Victoria, and the Okanagan Region, as well as by a continuing pullback in new supply in Calgary. New listings in Calgary have dropped by one-third from their multi-year high at the end of last year to their current multi-year low.

The national sales-to-new listings ratio was 55.3 per cent in April, up from 50.4 per cent three months earlier as the ratio has steadily risen along with sales so far this year.

A sales-to-new listings ratio between 40 and 60 per cent is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in the majority of local housing markets in April.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

There were 5.9 months of inventory on a national basis at the end of April 2015, down from 6.1 months in March and 6.5 months at the end of January when it reached the highest level in nearly two years. While the sales-to-new listings ratio and months of inventory measures of market balance indicate that the housing market has tightened on a national basis over the past few months, both measures remain firmly entrenched in balanced market territory.

The Aggregate Composite MLS® HPI rose by 4.97 per cent on a year-over-year basis in April, on par with the 4.95 per cent year-over-year gain recorded in March.

Year-over-year price growth accelerated in April for apartment units and two-storey single family homes, while decelerating for townhouse/row units and one-storey single family homes.

Single family home sales continue to post the biggest year-over-year price gains (+5.84 per cent), led by two-storey single family homes (+6.89 per cent). By comparison, the rise in selling prices was more modest for one-storey single family homes (+4.20 per cent), townhouse/row units (+3.87 per cent), and apartment units (+2.60 per cent).

Price gains varied among housing markets tracked by the index. For the third consecutive month, Greater Vancouver (+8.50 per cent) and Greater Toronto (+8.43 per cent) posted the biggest year-over-year price increases. By comparison, Fraser Valley, Victoria, and Vancouver Island recorded gains in the range between 2.7 per cent and 4.0 per cent.

Price growth in Calgary continued to slow, with a year-over-year increase of just 2.21 per cent in April, the smallest gain in three years and the tenth consecutive month for which the gain diminished.

Prices remained stable on a year-over-year basis in Saskatoon and Ottawa, while rising slightly in Greater Montreal, dipping slightly in Greater Moncton, and falling in Regina.

The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.

The actual (not seasonally adjusted) national average price for homes sold in April 2015 was $448,862, up 9.5 per cent on a year-over-year basis.

The national average home price continues to be upwardly distorted by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. Excluding these two markets from calculations, the average price is a more modest $339,893 and the year-over-year gain shrinks to 3.4 per cent.

- 30 -

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 109,000 REALTORS® working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

Highlights:

• National home sales edged up 4.1% from February to March.
• Actual (not seasonally adjusted) activity stood 9.5% above March 2014 levels.
• The number of newly listed homes rose 1.8% from February to March.
• The Canadian housing market remains balanced.
• The MLS® Home Price Index (HPI) rose 4.95% year-over-year in March.
• The national average sale price rose 9.4% on a year-over-year basis in March; excluding Greater Vancouver and Greater Toronto, it increased by 2.4%.

The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations rose by 4.1 per cent in March 2015 compared to February.

March sales were up from the previous month in nearly two-thirds of all local markets, led by Greater Vancouver, Fraser Valley, Calgary and Edmonton. Despite the monthly rebound, Calgary and Edmonton sales came in below the 10 year average for the month of March.

“Low mortgage interest rates are good news for affordability as we head into the spring home buying season,” said CREA President Pauline Aunger. “This spring should see buyers coming off the sidelines in places where winter was anything but mild. Like the weather, all real estate is local and nobody knows your real estate market better than REALTORS®, who remain your best source for information about sales and listings where you currently live or might like to in the future.”

“Greater Vancouver and the GTA are really the only two hot spots for home sales and prices in Canada,” said Gregory Klump, CREA’s Chief Economist. “Price gains in these two markets are being fuelled by a shortage of single family homes for sale in the face of strong demand. Meanwhile, supply and demand for homes is well balanced among the vast majority of housing markets elsewhere across Canada.”

Year-over-year price gains for single family homes in Greater Vancouver and Greater Toronto have exceeded those in other housing markets tracked by the MLS® HPI throughout the first quarter of 2015 (Chart A).

Actual (not seasonally adjusted) activity in March stood 9.5 per cent above levels reported in March 2014 and slightly above the 10 year average for the month. March sales failed to lift activity recorded during the first quarter above its 10 year average. First quarter sales were below their 10 year average in most local housing markets.

The number of newly listed homes rose 1.8 per cent in March compared to February. The rebound in Greater Toronto more than offset the continuing pullback of new supply in Calgary, where it had climbed sharply toward the end of last year but now stands at a multi-year low.

The national sales-to-new listings ratio was 53.9 per cent in March, up from 52.7 per cent in February and 50.4 per cent in January.

A sales-to-new listings ratio between 40 and 60 per cent is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in about 60 per cent of all local housing markets in March.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

There were 6.1 months of inventory on a national basis at the end of February 2015, down from 6.3 months in February and 6.5 months in January. While both the sales-to-new listings ratio and months of inventory measures have tightened at the national level in the past few months, they remain firmly entrenched in balanced market territory. Moreover, both measures of housing market balance indicate that upward pressure on selling prices is subsiding in an increasing number of local markets.

The Aggregate Composite MLS® HPI rose by 4.95 per cent on a year-over-year basis in March. This marks the first year-over-year increase of less than 5% since last May and its smallest gain since January 2014 (Chart B).

Year-over-year price growth decelerated in March for apartment units, while accelerating slightly for other Aggregate Benchmark housing types tracked by the index.

Single family home sales continue to post the biggest year-over-year price gains (+5.83 per cent), led by two-storey single family homes (+6.66 per cent). By comparison, the rise in selling prices was more modest for townhouse/row units (+4.55 per cent), one-storey single family homes (+4.41 per cent) and apartment units (+2.36 per cent).

Price gains varied among housing markets tracked by the index. Greater Toronto (+7.85 per cent) and Greater Vancouver (+7.19 per cent) posted the biggest year-over-year increases. This was followed by Calgary at 4.13 per cent, which was a markedly smaller gain compared to those posted last year and the smallest since August 2012.

In other markets tracked by the index, prices were up compared to year-ago levels by between two-and-a-half and three per cent in Fraser Valley, Victoria, and Vancouver Island, while remaining little changed in Saskatoon, Ottawa, and Greater Moncton. Prices also ticked up by half of one per cent in Greater Montreal, while falling four per cent in Regina (Table 1).

The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.

The actual (not seasonally adjusted) national average price for homes sold in March 2015 was $439,144, up 9.4 per cent on a year-over-year basis.

The national average home price is being increasingly skewed by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. Excluding these two markets from the calculation, the average price is a relatively more modest $332,711 and the year-over-year gain shrinks to just 2.4 per cent.

- 30 -

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 109,000 REALTORS® working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca

The Bank of Canada announced on March 4th, 2015 it was keeping its trend-setting overnight lending rate at 0.75 per cent. Six weeks earlier, the Bank surprised markets by cutting the rate by a quarter of a percentage point as insurance against economic damage from the drop in oil prices.

In its March announcement, the Bank was upbeat about recent and further expected strength from exports and investment. Only time will tell to what extent these factors offset economic fallout from lower oil prices, so speculation remains as to whether the Bank will cut interest rates again later this year.

As of March 4th, 2015, the advertised five-year lending rate stood at 4.74 per cent, down 0.05 percentage points from the previous Bank rate announcement on January 21st, and down 0.25 percentage points from one year ago.

The Bank’s next interest rate announcement is on April 15^th, when it also releases its updated economic forecast. At that time and barring some unforeseeable economic calamity, it will keep rates steady rather than cutting them further.

(CREA 03/04/2015)

In a surprise move, the Bank of Canada announced on January 21^st, 2015 that it was lowering its trend-setting overnight lending rate from 1 per cent to 0.75 per cent. This marks the first change to the Bank’s key interest rate in more than four years.

The decision to cut rates was the result of the recent sharp drop in the price for oil, which the Bank said “will be negative for [economic] growth and underlying inflation in Canada.”The Bank’s new Canadian economic forecast assumes that oil prices will average around US$60 per barrel, which means the Bank believes oil prices will rise from the mid-to-high $40 range where they stood at the time of the announcement.

The Bank said that total CPI inflation was already starting to reflect lower oil prices and that inflation was expected to drop below the lower bound of its target range for inflation of between one and three per cent before returning to the target range in the fourth quarter of this year. “This points to interest rates staying lower over the rest of the year,” said Gregory Klump, CREA’s Chief Economist.

The Bank said “the oil price shock is occurring against a backdrop of solid and more broadly-based growth in Canada in recent quarters. Outside the energy sector, we are beginning to see the anticipated sequence of increased foreign demand, stronger exports, improved business confidence and investment, and employment growth.”

The cut to the Bank’s key interest rate will act as another shoulder against the wheel pushing Canada’s economy in this direction while helping put a floor under falling inflation.

Even before the surprise rate cut, a rising spread between bond and mortgage rates was already putting downward pressure on five year fixed interest rate mortgages.

As of January 21st, 2015, the advertised five-year lending rate stood at 4.79 per cent, unchanged from the previous Bank rate announcement on December 3rd, 2014 and down 0.45 percentage points from the same time one year ago. The Bank of Canada’s next policy interest rate announcement is March 4^th, 2015 and the next update to Canadian economic forecast will be published in its Monetary Policy Report on April 15^th, 2015.

(CREA 01/21/2015)

The Bank of Canada announced on December 3^rd, 2014 that it was holding its trend-setting overnight lending rate at 1 per cent.

Economic conditions around the world have changed rapidly in recent months. The Bank’s December 3^rd announcement took a decidedly “on the one hand, on the other hand” approach in addressing how recent developments have altered not only the outlook for inflation and the economy, but also the risks to that outlook.

While it considers the potential upside and downside risks to be balanced, the Bank sees them as having intensified.

1. Risks to the Canadian economy: On the upside, the Bank acknowledged Canadian exports as having improved, resulting in stronger business investment and employment, suggesting the return of balanced and self-sustaining growth. On the downside, the Bank indicated lower prices for oil and other commodities will act as a drag on the Canadian economy, and that household imbalances present a significant risk to financial stability.
2. Inflation risks: On the downside: weaker oil prices could lower inflation. On the upside, The impact of lower oil price may be tempered by a stronger U.S. economy, Canadian dollar depreciation, and recent federal fiscal measures. The Bank acknowledged inflation is up by more than expected due largely to what it considers to be temporary factors, and while underlying inflation has edged up it remains below the 2 per cent target.
3. Interest rate risks: On the upside, developments as outlined above together with upward revisions to past economic data suggest that slackness in the Canadian economy may be less than the Bank previously thought. That means the expected date for the first interest rate hike could be moved up. On the downside, conditions in the labour market continue to suggest there is still plenty of slackness in the Canadian economy. Additionally, lower oil prices could mean slower growth and more time before the Bank starts raising interest rates.

What does all this mean for the interest rate outlook? At this point, not much. The first hike is still pencilled in for later next year. Whether that outlook changes will depend on what happens in the months ahead – and perhaps most importantly, what happens to the price of oil.

As of December 3rd, 2014, the advertised five-year lending rate stood at 4.79 per cent, unchanged from the previous Bank rate announcement on October 22nd, 2014 and down 0.55 percentage points from the same time one year ago.

The next interest rate announcement along with the next update to the Monetary Policy Report will be on January 21^st, 2015.

(CREA 12/03/2014)