Interest rate increase will likely have an impact on Winnipeg’s housing market: Experts
Posted July 11, 2023 5:03 pm.
Last Updated July 11, 2023 6:50 pm.
As the Bank of Canada is expected to raise interest rates once again, many are bracing for the further tightening of their wallets. But will another hike be a detrimental blow to a normally stable Winnipeg housing market?
The Bank of Canada is set to announce a rate change on Wednesday, expected to increase rates by a quarter point to 5 per cent.
If it happens, it will be the highest rate Canadians have experienced since 2001.
“Canada added 60,000 new jobs to the economy in the month of June alone. Although interest rates have gone up, people continue to spend money. What’s that telling governing bodies, people are able to handle, people have jobs to handle these price increases,” said Chad Wilson, a mortgage broker with Ideal Mortgage Solutions.
Despite inflation trending downward in Canada, a rate hike is still a very sobering thing to hear for many Winnipeggers.
“I don’t think it’s right because people can’t afford to make ends meet now the way it is now, so how are they going to pay their bills at the end of the month,” said one Winnipegger CityNews spoke to.
Another saying, “Mortgage rates are too high for the younger people that have these nice houses and mortgages. If they don’t make the money, they’re finished.”
Experts say though that at this point there isn’t a clear indication that another rate hike will lead to mortgage defaulting.
“It’s pretty individual. There’s a big difference between not wanting to pay more interest with a higher payment and not being able to pay that mortgage,” said Wilson.
And while some may be discouraged by the news of another rate hike, experts are encouraging them to speak with their bank about possible options.
“I hear a lot of concerns about, ‘Am I able to pay my mortgage?’” said Maggie Demarchi, a sales representative with Royal LePage. “They will pay more and if they want to buy they don’t have many other options.”
But if there’s a silver lining, it’s that these rates are not expected to last forever.
“If they can see it through, then see it through. Because the other side of this, and most economists are predicting into 2024 that we have to see some reduction in interest rates,” said WIlson.
