The housing affordability in Canada is a major concern for Canadians. An interest rate hike would have assisted in cooling the market.
https://www.bankofcanada.ca/2022/01/fad-press-release-2022-01-26/
Let’s hope Bank of Canada looks into this decision and considers a rate hike in the near future.
As inflation is at record high compared with the 1990s but the interest rates are not close to parity. During those times the interest rates in Canada were reaching 15-20%.
Local Investors have poured into the market. House flipping and bidding wars in the real estate market are commonplace in the Canadian Real Estate Market. The investors are leveraging large mortgages as money is cheap and at historically low interest rates.
Bank of Canada must review historical events in economic markets and see what had happened in the late1980s, 2000, 2008.
Do they see a pattern? We are due for a market correction and recession. If the impact needs to be lessened, the Bank of Canada must consider rate hikes to soften the blow to Canadian consumers.
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