M2m condos floor plan . What does raising interest rates mean for the housing market? The Bank of Canada said it could raise its previous benchmark interest rate by 0.25 per cent as early as April, three months earlier than expected.Please Visit: M2m condos floor plan to Get Your VVIP Registration Today!
On the other hand, Canadians are keen to buy cheap debt in large quantities, leading to a surge in floating rate loans. Many people originally believed that the Bank of Canada would raise interest rates at 01:30, but now it seems certain that interest rates will accelerate, and experts expect to raise interest rates in March next year.
Interest rate is the barometer of the real estate market. In many countries, raising interest rates is considered to be one of the best market-oriented means to regulate the supply and demand of real estate.
In Ontario, home purchases for investment accounted for 1/4 of all home purchases in August, the highest in nearly a decade, making current real estate investment riskier, according to Teranet. In the second quarter of this year, the number of people with three or more mortgages increased by 7.7% over the same period last year, double the figure before the outbreak, according to Equifax.
Many investors have taken advantage of falling interest rates on floating mortgages to make loans that have boosted the Canadian real estate market. But the central bank’s warning to raise interest rates in advance is likely to ease the trend.
On the other hand, many home buyers have to consider the repayment burden increased by raising interest rates. In response, Reuters believes that investors who own multiple properties may sell some properties to reduce the repayment burden.
“Investor demand is fickle,” said Philip Cross, a senior researcher at the Macdonald-Laurier Institute. “once investors start to see interest rates rise or house prices fall, they will think that real estate investment is unprofitable, and this source of demand may soon disappear.”