REIN Finance and real estate analyst Peter Kinch joined CTV to explain Bank of Canada's benchmark interest rate increase from 1.25% to 1.5% and how it could effect Canadian real estate and housing markets.
'Bank of Canada wants to target inflation at about 2%... the economy is doing really well, but one of the key factors is household debt'he says.
Canada's strong economy, combined with rising household debt factored into the decision to increase interest rates. After years of providing record low interest rates, Bank of Canada intends to slow the progression of rapidly broadening housing markets and stabilize excess spending and borrowing. Peter predicts metro Vancouver markets will be impacted most. "People will take a step back. Our Spring market should have been booming, but it was quiet...Summer is going to be even quieter."