I feel like if there were a word that we can all collectively agree on having heard a few too many times this year, I would put my money on – ‘interest rates’. You know, kind of like how many times we heard ‘unprecedented’ in 2020. I also think were about to hear it plently more times to come, we have another 4 scheduled rate hike announcements this year (July, Sep, Oct, Dec). This month, to no ones surprise we had an interest rate hike of 0.50%. Also to no ones surprise, there is about 60% odds of a 0.75% hike by the BoC for July 13th.
Intially, there had been speculation that the BoC might slow the pace of its hikes if momentum in our real estate markets slowed too quickly. There was even reassurance that the Bank would be ‘very closely and carefully’ monitoring the housing markets across the country. However, just last week there was an announcement that the Bank’s focus would be primarliy on inflation correction and that ‘moderation in housing would be healthy’.
Put blunty, there is much to be seen over the next several months, especially with the view from the BoC to prioritize inflation back to target. How substancial of a correction will we experience? and will our housing market be protected from this?