Canadians reveal how inflation, rate hikes are impacting their finances

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“I think they’re probably in a better state of mind, which is great,” he told Canadian Mortgage Professional. “But inflation and interest rate increases take a while to settle in. So that’s why I just caution everyone. You’re feeling better about your financial situation – that’s what the survey says.

“That’s great, and hope that continues. But just be cautious, because sometimes it takes a while for economic factors to sink in. And that’s where the false sense of optimism comes in.”

The trend of younger Canadians being hit harder in terms of disposable income left over at the end of each month is also troubling, Bazian said. “There’s more financial stress and pressure on them. So it kind of makes sense that they’d be hit the hardest,” he explained.

“Keep in mind – it is a sentiment survey, and these are approximations. But unfortunately, younger Canadians are always hit hard when financial constraints come into play, interest rate increases, etc. So, it makes sense.”

There’s still currently much uncertainty about how long interest rates will continue to rise. While some had anticipated that the Bank of Canada might hit pause on rate hikes after its September decision, the central bank’s statement accompanying that 75-point jump indicated rates would almost certainly need to rise further.

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