LOOKING UP John Lusink, president of Right at Home Realty, answers: What do rising interest rates and housing-related measures announced in the 2022 federal budget mean for Ontario's condo market?
We are currently seeing a dramatic shift in the housing market with housing activity slowing down, thanks to a drop in demand. The housing market cool-down was prompted by rising interest rates, with the most recent quote for two-year fixed mortgage rates rising to 4.03 per cent. Mortgage insurers in Canada are seeing a drop of nearly 40 per cent on unit application volume. Borrowers who are up
for renewal will see their rates double in many cases, creating some real risk in the markets. The sales-to-new listings ratio in Toronto suggests that sales and selling prices will begin trending downwards at a rapid pace. In addition, other inflationary pressures such as fuel, the cost of food and other worldwide conflicts and challenges risk pushing the economy into a recession.
8 CONDOBUSINESS | Part of the REMI Network
The Dual Impact of Rising Rates One of the impacts of interest rate increases on potential homebuyers is with respect to their house-buying power, which has been reduced by almost $100,000 in many areas. However, we have also seen increases in household income, which has helped to temporarily ease the loss in house-buying power, that is, until we see another rate increase.
