BUSINESS

Housing Newsletter: They Raised The Interest Rate... Now What?

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07/14/2017 13:24 EDT | Updated 07/14/2017 13:27 EDT

This week's newsletter is written by Ron Nurwisah who prefers actual hikes to rate hikes.

They finally did it. After seven years, the Bank of Canada raised its rates to 0.75%. So what now?

HuffPost Canada business editor Daniel Tencer outlined what the rate hike could mean for most Canadians. If you're carrying debt in the form of variable-rate mortgages or lines of credit, the next few weeks would be a good time to review your finances to make sure that the new rates won't stretch your budget.

Some experts think that the rate hikes likely won't be the last, with a few predicting that the BoC could bump its rates to 1.5% by 2018. If this happens, then many more Canadians who find themselves already stretched with debt payments could find themselves in real trouble.

As for the housing market as a whole, higher interest rates will be another splash of water on the country's hotter housing markets. Royal LePage, one of Canada's biggest real estate companies, is predicting a softer market for the rest of 2017. "I believe what we'll see (in Toronto) is modest price increases but fewer homes being sold — not as a violent as the Vancouver correction where we saw 40 to 50 per cent of the transactions disappear," Royal LePage CEO Phil Soper told the Toronto Star.

— Ron Nurwisah

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On HuffPost Canada

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Neighbouring Reads

China's Whack-a-mole Housing Crisis (Citylab)

How To Make Vertical Living More Family Friendly (Citylab)

10 Amazing Converted Homes (Curbed)

It's Harder Out There For Toronto Renters: Report (Toronto Star)

China Has 400,000 People Fighting Money Laundering (Better Dwelling)

Canada Has Twice As Many Vacant Homes As The U.S. Did Before The Crash (Better Dwelling)

Quoted

"It's an obligation to buy your kids a house. It's a tradition. If we wait until the children are grown up and let them buy a house, think of how expensive it will be!"

— Yu Ying, Chinese mother and business owner

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