With today’s interest rate hike a foregone conclusion, speculation has turned to what will happen next. Some economic forecasters expect the Bank of Canada to pause after today’s rate increase, while others are expecting another 25 or 50 basis point hike in October.

It’s important to note that the federal government requires prospective mortgage borrowers to prove they can make payments at interest rates that are at least two percentage points higher than their mortgage rates. With interest rates on five-year fixed-rate mortgages near 5 per cent, many borrowers must now qualify at around 7 per cent. 

The region’s housing supply crisis is still an issue despite lower sales this year. That’s evident in the rental crunch. We’re seeing double-digit growth in rents and that’s indicative of population growth and a shift towards rental from ownership housing.

Looking ahead, these people will eventually want to enter the ownership market.