What do Rising Interest Rates Mean for you?

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With the recent increase in interest rates, many may fear what this will do to the real estate market. Truth is, “a modest increase in the overnight lending rate will probably have very little impact on the Canadian housing market, particularly in the high-end segment”. High net worth individuals will see less of an impact regarding the rise in interest rates and it is no surprise that “the Greater Toronto Area led the market in the first half of 2017 in terms of sales of homes worth over $1 million”. An impact that can be observed is the 15 percent tax the Ontario government introduced to cool down the market. However, a bigger impact was observed in Vancouver as a result of the foreign buyer tax.



The main thing here is that higher end markets shouldn’t see a dramatic change with the interest rate hike. Unless the increase is as big as 100 to 200 basis points, the effect will be marginal. Essentially, “if the increases are only 25 basis points each, with long periods of time between rate hikes, to a total of 50 basis points, the impact on the real estate market will be minimal”. However, depending on where you live, and the real estate climate in that area, interest rate effects will vary.


Taken by an article written by Alexandra Posadzki from CTV News. http://www.ctvnews.ca/business/modest-rate-hikes-to-have-little-impact-on-high-end-real-estate-sotheby-s-1.3497574

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