Barry Fenton, president and chief executive officer of Lanterra Developments, said in a panel discussion with BNN Bloomberg Wednesday that interest rates are not the “full driver” of the real estate market. He said that he was “actually pretty happy” that the recent rate hike brought certainty. a 25 basis point increase to its policy rate, bringing it to five per cent. The move marked the highest point for the Bank of Canada’s interest rate in 22 years.
“I think that once we stop the interest rate increases, or at least people think that there's certainty, we're going to be way on fire,” he said. Robert Kavcic, a senior economist at BMO Capital Markets, said in the panel Wednesday that Canada has a strong supply and demand relationship that supports Canada’s housing market.
“And that's why it's really hard to drive a material long-term correction because there is that fundamental demand there.”