In a poll conducted the same month as Jim Flaherty’s regulations were introduced, 83% of respondents to a CREW poll said the Bank of Canada’s overnight rate would stay unchanged. That’s despite new numbers suggesting Toronto’s condo market hasn’t yet cooled enough to avert concerns about a bubble.
Now almost a month after the finance minister introduced his new rules meant to put the brakes on that segment of the market, many financial analysts and mortgage professionals are unsure of just how effective they are. If the changes fail to cool the housing market, the Bank may need to raise the rate sooner rather than later in a bid to avoid a correction, according to some analysts.
Property investors across Canada aren’t necessarily convinced, suggests the CREW poll, although they could ultimately benefit from that move as renters put off plans to buy homes and vacancy rates drop.
But higher interest rates would also affect investor, likely forcing many to put their own acquisition plans on hold, say industry insiders.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate