On June 7th, the Bank of Canada increased its target for the overnight rate to 4¾%, with the Bank Rate at 5% and the deposit rate at 4¾%. The Bank is also continuing its policy of quantitative tightening.
This has brought about significant changes in the real estate market. The increase in interest rates means that borrowing costs have risen, which has started to impact homebuyers’ purchasing power. As a result, some potential buyers may be reconsidering their budgets or adjusting their expectations. This shift in affordability has led to a slight slowdown in housing demand, particularly in the more price-sensitive segments of the market. However, it’s important to note that the impact of interest rate hikes on the real estate market can vary depending on other factors.
Looking ahead, there is speculation of another possible hike in interest rates in July, which may further influence buyer behaviour and market conditions. We’re closely monitoring these developments and adjusting our strategies to ensure we provide the best guidance to our clients during this evolving landscape.
Are you interested in discussing how this may affect you? Contact us today!