Will the Bank of Canada raise interest rates?
Speculation has it that interest rates are on the rise! With upwards of 6 increases forecasted this year, will buyers be priced out of the market? Will it cool the real estate market? Will the long-awaited bursting bubble come to fruition? Unlikely.
It’s difficult, if not impossible, to predict where the market is heading, and risky business for buyers and sellers to attempt to time it; however, being on the front-lines with buyers gives us insight into their degree of confidence. This has proven valuable in seeing what direction we’re headed. We’ve also lived through multiple rate increases, and, to the contrary of what many economists and industry experts often predict, it has had little to no affect.
Rising rates WILL affect the real estate market… this is how
HOWEVER, we do believe that the next one could prove different.
We have been accustomed to declining and very low rates for a very long time. There has been a lot of speculation of increases, which never occurred. The public has been conditioned to enjoy low rates that never go up, despite speculation that they will. So, when they do, it will most definitely have an affect on the market; but, not what most might expect.
When the first interest rate increase occurs, I anticipate a frenzy of buyers to flock to the market. Mortgage agents and brokers will be swamped with applications to lock in rates, real estate agents will be bombarded with phone calls to buy a house before rates go up and they can no longer afford their dream home or that first investment property.
As with rate increases in the past, it will be a short-lived surge of buyers, likely tapering off after a few weeks to a couple of months to a more familiar condition, but it will happen. And, we’ll be ready.
