Still, there is a silver lining for the market, with CIBC offering assurances that “the expected slowing in consumer spending will feel more like a gearing down rather than slamming on the brakes.”
Read more: Housing affordability deteriorates to new lows
This is mainly due to the more robust state of Canadians’ purchasing power.
“From a macro perspective, households’ fundamentals are now generally stronger than seen at the eve of previous hiking cycles, and the structure of household debt will shield many borrowers from the full sting of higher rates in the coming year,” CIBC said.
While total household debt currently stands at around $2.7 trillion, just $650 billion (24%) face an actual increase in interest payment this year, CIBC added.
