Housing experts say prospective homebuyers hoping Wednesday's interest rate hike will cool the country’s heated real estate market will likely be disappointed.
“I’ve got so many people that were like ‘I’m going to get my rate hold or my pre-approval finally done’ ... They’re ready to go.” But in recent months, new listings have dropped and realtors and buyers are bemoaning a lack of properties that has tipped the market even further in favour of sellers. "Even if we had like double the inventory, demand is insane and it's the demand that is the issue," she said.Gilbert’s views are bolstered by a Zoocasa analysis showing interest rate increases correlate with slower sales numbers, but trigger no major impact on prices.
After the rate hikes there were “very small movements” in the average price. The largest month-over-month price drop after an interest rate announcement came in November 2018, when prices dropped 2.35 per cent, and the largest was seen in February 2018, when prices climbed by more than four per cent.
Interest rate hikes typically weigh on homeowners with variable-rate mortgages because many banks use the central bank’s key rate to dictate how they should change their prime interest rate. RBC Royal Bank said it is increasing its prime rate to 2.70 per cent from 2.45 per cent, effective Thursday.Estee Zacks, the Toronto-based owner of Strategic Mortgage Solutions Inc., noticed a recent surge in requests for rate holds, which freeze mortgage rates for up to 130 days.
The projected successive next ones will tho.
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