High interest rates bring winter gloom to Canada's housing market

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Experts say higher interest rates mean prices need to fall more before any rebound materializes. Read more.

has signaled its historic tightening campaign is nearing an end, though economists expect the central bank’s policy rate to remain at a 15-year high of 4.25 per cent or 4.5 per cent throughout 2023, putting downward pressure on prices.Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc.

But she cautioned it will be a far cry from the boom triggered by the COVID-19 pandemic, when prices soared 52.4 per cent in the two years to February 2022 as record-low interest rates, the desire for more space, and speculation set the market on fire. “It’s scary for someone that’s looking to buy,” said Victor Tran, a mortgage expert with online broker Ratesdotca. Variable rate mortgages — home loans in which the interest rate fluctuates based on market conditions — have more than tripled since March, with strict stress tests making qualification even tougher.

 

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