Canada Global(Web News) Housing Minister Sean Fraser suggested that the reduction of interest rates in Canada could improve housing supply.
Fraser told reporters in Ottawa on Tuesday that based on discussions with housing developers, he feels stalled projects will begin to move forward if that happens.
Don’t overlook the supply-constraining effects of interest rates, he said.
My expectation is that if we see interest rates fall this year, many of the developers I’ve spoken to will start projects that are modest today.
Fraser’s comments come at a time when Canada’s housing market is showing early signs of recovery, with several realtors saying last week that rising demand, a lingering housing shortage, rising rents and hopes of lower interest rates could fuel a rally in the
Bank of Canada. Canada’s policy interest rate has sat at five percent since July 12, and Governor Tiff McCallum said on January 24 that discussions at the central bank have moved away from the debate over whether interest rates are high enough
. The central bank has not yet indicated if and when interest rates are being cut.
McCullum told the House Finance Committee earlier this month that large spending increases in the next budget could hamper efforts to reduce inflation.
The budget is expected to be tabled in Parliament this spring.
