After almost two years the Bank of Canada has been steering away from the record low overnight rate that borrowers have been feasting on since March 2020, when the dreaded “C” invaded the planet. 

We knew this time was eventually going to come, and in many ways it’s a sign of good things. Admittedly though, this time around there seems to be more uncertainty with both an Invasion in Europe happening as well as the battle with an inflation number that no one seems to agree upon. 

Nonetheless, rates need to rise, and we need to get back to knowing that interest rates both rise and fall, and if we plan accordingly, life will go on. What I’m saying is that it’s not the end of the world when it comes to real estate values, and I don’t think we will see massive drop in values anytime soon. 

October 2021 through February 2022 was not a fun time to be a buyer. And yes, many of you can commiserate as memories of when you were searching for your home were probably fairly stressful conditions as well. I mean, after all, this is the Toronto real estate market right? 

But something had to give, as prices were escalating so quickly (see my blog in December here about the $100k a month insanity happening) that it was near impossible for a buyer to have a chance even when they knew they might be slightly over paying for the opportunity to purchase the property. Listings that were being offered at $1.2 million would often see a winning bid of $1.8 million. Let that settle in for a minute. And yes, really low interest rates played a part in the madness. 

Now it wasn’t only interest rates that could be blamed. Very few properties being offered for sale were another factor. The craziness of the “C” and it’s impact on people buying shacks in cottage country for a million dollars will be something to be studied down the road I’m sure of. I’ve heard of some crazy theories as I’m sure you may have as well. 

But we needed the insanity to stop, and hopefully with interest rates rising this will help in that regard. June 1st, July 13th and September 7th are the next three dates the BOC will update us on rates. This will have a major impact on what happens with our housing market. My thoughts (hopefully as they may be?) are that once the shock of rates rising fades, the market will continue to move forward. Hopefully the wild and quick increase in values will be behind us and we moderate back to a more moderate and manageable number. 

If you are in need of mortgage advice, you can reach out directly to me here. A lot of you have been asking questions of late and I have multiple lenders and top notch brokers that I can connect you with so that you can make the right mortgage choice that best suits you.