Interest Rates: CIBC vs. Scotia

Everybody knows that interest rates are going up, but the big question is how soon and how fast?  Recently two banks chimed in with two different forecasts:

CIBC: Interest rates unlikely to soar

Canadian interest rates will probably begin rising from July but are unlikely to soar as significant uncertainties remain in global economies, a new report by CIBC World Markets found.

Interest rates are likely to remain low by historical standards at no more than 2.5% at least until the end of 2011, CIBC Chief Economist Avery Shenfeld in the report.

Scotia: Interest rates seen rising

The Bank of Canada is set to embark on a series of interest rate hikes, starting in June, that will see its benchmark rate climb from its historic low of 0.25 per cent to three per cent in little over a year, Bank of Nova Scotia’s chief economist said yesterday in his latest outlook.

Warren Jestin said the move away from short-term “emergency level” rates is necessary because of inflationary pressure that is expected to emerge from stronger-than-expected growth. By the end of next year, the central bank’s target rate should be 50 basis points higher than the comparable rate set by the powerful U.S. Federal Reserve, he said in his latest update to Scotiabank’s economic forecast.

The increase of 275 basis points, to three per cent by the end of the third quarter of 2011, is bigger than what Jestin had previously anticipated. His earlier forecast had the central bank target rate climbing by a cumulative 200 points.

So which bank forecast will be correct when we see rates move from the historic low of .25%?  will we see rates go up by a factor of 10 as CIBC predicts, or a factor of 12 as in the Scotia outlook?  And what will this move mean for mortgages at renewal?

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Anonymous

Me,

thanks for your response you looks safe and sound,i thought you might be in hospital by now,Maybe you had a smell of xxx rum.Make sure no drinking and driving.

Me

@Anonymous: I just took a break from sniffing inside of my shoes to enter random numbers on a website. You trust this over the numbers provided by a couple of realtors? Maybe you'd like to buy a bridge, I have a very special offer for you today.

Anonymous

Me,

Are you serious about sales number at 872?

Why these numbers are different from paulb?

If your information regarding numbers are true,How did you get this more fastes information while paulb is running at 211 and larry at 208?

Anonymous

I GOT 6/16 HOLY SHIT THATS GOT TO BE A JOKE

Best place on meth

I got 16/16.

Looks like I'm an expert on this bloated pig of a real estate market.

A couple of those million dollar homes still shocked me though.

other ted

cool I only got one wrong. The house didn't look like it was in vancouver but the barbecue fooled me into thinking it was a legitimate home. What a joke. Sadly the second house a crack house was the only one that looked like a mansion.

Mike S.

14 out of 14, dudes. Just like the Realtor exam it was easier the third time through.

Animal Spirit

I no do so good on dat test. guess because I live in Victoria and can't believe that Vancouver prices are more ridiculous than here.

me

872, final for the night

all-time record for sales, first 200%+ sales/list in a mightly long time

this market is headed higher, much much higher

paulb

Crack shack or mansion is awesome! I am too ashamed to reveal my score http://www.crackshackormansion.com/

Who is this guy? Has to be a VCI regular.

me

804

they have stopped loading sales for the night, but I hear at least 150 waiting to be loaded, and more coming

realtots will make millions in commissions today

me

could we see 10% or more added to prices this month? it is possible.

me

should tail off in a couple of weeks, but I think we'd best prepare for 10,000 more sales plus over the next few weeks, the market is hotter than a tin roof in August

me

my contact tells me at least another hour to load all the sales, could crack 1,000 sales for today (from the weekend), no more listings.

realtor talk is of massive off the charts sales activity. Like nothing ever seen before. I expect more than 5,000 sales this week.

arit

rp, I got 15/16! Am I an expert in Vancouver RE?

Hey, who is behind this site? Is it one of us?

Regards

arit

me

791 sales

me

sales pouring in

me

379 listings

177 pc

776 sales

rp

Link from Garth's blog: http://www.crackshackormansion.com/

I scored 14, which either lends credibility to the bubble or suggests I can smell a crack shack a little too well.

rp
paulb

I am with ya! I saw a house in N Van that I really like. Carve 25% at least off it and I will be interested 🙂

Code for the addicts:

313

145

211

Looks like that may be all. Yawn…

VHB

I think we'll see a lot of sales for the next two weeks, then crickets. But who the hell knows for sure.

paulb

Lol! So what's your feeling on this one VHB? Are the pigeons coming home to roost?

VHB

Hey, let's countdown to April 19th. SEVEN more days!

anonymous

I enjoy the inventory crack as much as the next bear, but for a real hit, you have to follow Agent Will's numbers.

http://agentwill.com/weekly-stats/

They only come out once a week, but the comparison to the last drop makes them appear to predict the future. "Total Listings" showing this year against 2008 is like a vision into the future. The only question in my mind is when does 2010 stop looking like 2008?

(Thanks to all the drug providers out there – you make me feel warm inside).