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Real estate investors in Canada might lose or incur higher debt load on their investment properties as interest rates rise in 2022. According to Royal Bank of Canada economist Robert Hogue, the country’s housing market is heading toward a “historic” downturn that will be bigger than any in the last four decades.
Direct ownership might not be a good idea today due to steep mortgage costs and dropping prices. David Rosenberg, an economist, said, “Investors in residential real estate are typically what you would call weak hands.” He further said that forced selling by investors could push prices down as much as 40%.
Rosenberg added, “Bubbles burst when interest rates go in the other direction.” Mortgage rates will move in lockstep with the Bank of Canada’s rate-hike campaign. After four increases beginning in March this year, the central…
