How in the world this could happen?

Timothy's

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I don't understand this. And I saw hiring sign in almost every store. Where is the slow down?

ottawasun.com - Money - 'Great news for sellers'
"

While analysts say the economy and housing markets across the country are cooling off, Ottawa's housing market is still hot.
As the United States passes a bill to provide $700 billion to help its sinking economy, residential properties in Ottawa are selling like never before.
Members of the Ottawa Real Estate Board sold 1,208 properties in September. That's a 6.1% increase year over year and makes it the best September on record.
"This demonstrates clearly that Ottawa's housing market is still strong and very healthy," said board president Heather Skuce. "Prices continued to rise at a gentle but steady pace, similar to what we've been seeing for months, which is great news for sellers."
The average price of residential properties, including condominiums, sold in the Ottawa area was $288,006, also a 6.1% increase over the same period the previous year.



Not only that, according to a Re/Max report, sales of houses valued at $750,000 and higher have climbed 36%.
That's the highest increase in the nation.
In contrast, housing sales in the Greater Vancouver area plummeted 42.9% in September, Toronto was down 16% through the first half of the month, while Montreal was up just 2%.
"Sales are happening," said Century 21 Capital Realty broker Peter Sardelis. "I expected less, but they keep coming."
Sardelis said Ottawa being a government town means it's often insulated from the economic highs and lows of other cities in Canada.
"People employed by the government here have a solid base. Historically, in Ottawa housing we haven't seen overall prices drop since the '90s."
He admitted that fears of a major economic slowdown will have some effect, but predicted longer selling periods would prevail over lower sales in general.
"My personal opinion is that it will have some impact, but the home buyer will still buy the home. I don't see things changing much."
Commercially, the news was nowhere near as good. According to a study by CB Richard Ellis, commercial real estate investment fell by almost 50% to $322 million compared to last year. However, the real estate services firm is still bullish on the city, calling Ottawa "solid" and at least partially blaming the investment shortfall on a lack of vacant properties. "
 
My view on this - considering the banks have already tightened up the mortgage market (hard to get good discount rates right now), this would push the people who have already locked a "good" rate to buy in a rush (you cannot lock forever)...People without locking the rate would hesitate to jump in - in a long run, the housing market in Ottawa will be flat for a while...

Now back to my question, at present central bank has a big pressure to lower the rate. Which one shall I go, fixed or variable? I need to make that decison soon. And if I am for variable, what's the reasonable rate (for negotiation purpose) I should cap at when I swtich to fixed? The current fixed rate I locked at is 5.05% (5 yr fixed)...

Looking forward to your feedback...
 
Did you see the news that TD Canadatrust increased its own prime rate by 1%?
 
It said that their home equit line of credit rate is Prime + 1%. It was used to be prime. Maybe I am wrong.
 
Did you see the news that TD Canadatrust increased its own prime rate by 1%?

You mean this one? Oh my God!

TD Canada Trust hikes variable mortgage rates, lines of credit | Markets | Headline News | Canadian Business Online

TD Canada Trust hikes variable mortgage rates, lines of credit

The Canadian Press
October 6, 2008 - 6:43 p.m.
TORONTO - One of Canada's biggest mortgage lenders, TD Canada Trust, is increasing the interest rate charged for its home equity line of credit and variable-interest mortgages.
The bank has been charging its prime rate for its Home Equity Lines of Credit - which uses the value of the customer's home as collateral - but will start charging one percentage point above prime.
TD Canada Trust (TSX:TD) is also increasing the rates for its open and closed variable-rate mortgages to one percentage point above prime, effective Tuesday.



The prime rate at TD and most major Canadian banks has been 4.75 per cent since April, the last time the Bank of Canada changed its target for its overnight lending rate.
 
It is not true. The variable rate now is about prime -0.5.
 
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