What impact would another Bank of Canada hike have on the housing market?

Houses for sale in Ottawa

How has the housing market absorbed interest rate increases to date?

A new report by Royal Bank of Canada (RBC) on the impact of the central bank’s last rate hike in June indicated that the effects had been mixed across various regional markets.

Toronto, Hamilton, Ottawa and Vancouver all saw their markets cool in the aftermath of the increase, according to bank economists Robert Hogue and Rachel Battaglia, although activity in the Fraser Valley, Calgary, Edmonton, and Montreal continued at a decent clip.

Supply is rising across the country, Hogue and Battaglia added, with more homes becoming available for sale in every major market last month.

“So far the growing supply hasn’t done much to ease (recently re-emerged) upward price pressure),” they said. “But if sustained, we would expect the pace of property appreciation to slow in the coming months.”

Still, the retreat of buyers in some of the country’s leading markets in June, according to Hogue and Battaglia, “could be a sign that the future trajectory will be more measured.”

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