The big news this week was the 50 bps Bank of Canada rate cut, which led to a drop in lending rates for both fixed and variable mortgages from the big 5 banks. The Bank of  Canada 's current overnight lending rate of 1% is the lowest in the bank's history. This rate drop coincides with news that home sales volumes and prices continue to plunge throughout the country.

INDUSTRY MEDIA COVERAGE - WEEK OF JAN 12-21

The Globe and Mail

January 21, 200

LORI MCLEOD AND TARA PERKINS

Banks provide relief with mortgage cuts

Consumers pinched by the credit crunch are getting some relief as lenders lower their rates on both fixed and variable mortgages. Lenders including Royal Bank of Canada , Bank of Montreal, Bank of Nova Scotia , Toronto -Dominion Bank and CIBC are slicing mortgage rates shortly after the Bank of Canada cut its key lending rate to a historic low of 1 per cent.

The Toronto Star

January 20, 2009

Tony Wong

January home sales plunge 50%

The Toronto Real Estate Board yesterday reported a meagre 888 sales in the first half of January, compared with 1,776 sales during the same period a year ago. The average price of a home is also down, 9.5 per cent to $332,495, compared with last year's $367,574 - a $35,000 plunge.

Toronto Star

January 20, 2009

Julian Beltrame

Key rate falls to 1 per cent

OTTAWA -The Bank of Canada is warning Canada 's economy will significantly contract this year and has moved to arrest the decline by chopping its key interest rate to the lowest level ever. The central bank cut the overnight rate by one-half point to one per cent, below the 1.12 per cent that had served as the bank's floor policy rate last seen 1958. The decrease was in line with economists expectations, who have been calling for bold action on the parts of the central bank and the federal government in light of the quick and sharp downturn last fall following the destruction of savings in global stock markets.

Financial Post

January 20, 2009

Retail banks pass on rate cut

Canada 's big retail banks swiftly moved to match the 50-basis-point cut the Bank of Canada made to its benchmark interest rate. Within minutes of the Bank of Canada decision on Tuesday, the Bank of Montreal appeared to be the first chartered bank to follow suit, announcing that it would be cutting its prime lending rate to 3% from 3.5%, effective Wednesday.

Financial Post

January 15, 2009

Jamie Sturgeon

Xceed Mortgage Corporation

Xceed Mortgage Corp. said Thursday losses for 2008 nearly tripled to $12-million from the previous year as charges related to cost-cutting weighed on the lender. A 50% decline in mortgage originations has also cut into earnings.

The Toronto Star

January 20, 2009

Lori McLeod

GTA housing sales and prices plunge

Home sales are off to a sluggish start in the Greater Toronto Area, falling by 50 per cent in the first two weeks of the year compared with the same period in 2008. Just 888 resale housing units changed hands in the first half of January, compared with 1,776 last year, according to a report yesterday from the Toronto Real Estate Board.

National Post

January 19, 2009

Michael McKiernan

Realtors ask sellers to be ‘realistic' as housing market stays cool

The greater Toronto real estate market continued its slide in the first half of January, according to figures released today. Total house sales were cut in half compared with the same period last year, while $35,000 was knocked off the average value of each sale, a drop of almost 10% on 2008. Toronto Real Estate Board president Maureen O'Neill said the cooling will take some getting used to, but expects growth once potential sellers and buyers adapt to the new economic conditions.

Bloomberg

January 14, 2009

Greg Quinn

Canada Purchases C$8 Billion of Mortgages From Banks (Update1)

The Canadian government bought C$8 billion ($6.46 billion) of mortgages from banks, as part of a program to buy as much as C$75 billion of the securities and ensure that higher borrowing costs don't crimp lending.  Canada Mortgage and Housing Corp., a state-run agency, announced the purchase today on its Web site. The transaction is aimed at helping banks fund new loans to consumers and businesses. Finance Minister Jim Flaherty tripled the amount the government was willing to buy.