The effect of the central bank’s policy rate increases on the housing market had already been clear well before its latest announcement, with sales posting a marked drop-off compared with 2021 and house prices also beginning to waver.
That was perhaps to be expected, Fooks said, although he added that another big factor could weigh against a possible contraction in the market.
“Any substantial rate hike will typically have an immediate cooling effect on the overall sales in the market leading to a downturn,” he said. “That being said, it’s important to note that we have a major housing shortage in Canada, so it remains to be seen how these two leading indicators will balance each other out.”
While some buyers may be given pause for thought by those climbing rates, they should also keep in mind that there’s never a perfect time to…