How are brokers advising their clients on rate hikes?
Still, while a cooler market might be viewed as an opportunity for those buyers who were previously on the fringes to finally secure a property, Clarke said that rate hikes have played a significant role in reducing interest in purchasing across the board.
“In Nova Scotia, it seemed like prices might be tipping, but it hasn’t really happened too much with rates going up and the extra qualifying rate going with it,” he said. “It’s taking away from the buying power a bit.
“At least in Nova Scotia, our prices have stayed pretty steady, but then the buying power has gone down and people are getting [second thoughts]. So I don’t know if it’s been an opportunity for people that haven’t been able to get in.”
It’s no surprise that clients who have variable-rate mortgages are keeping a close eye on the Bank of Canada’s interest rate trajectory, with those mortgage holders’ payments having increased substantially in many cases since the beginning of the year.
Still, while many variable-rate customers may be mulling a switch to a fixed option, Clarke said most are still dissuaded from the prospect by a spread between the two that remains high.