As the Bank of Canada eases on bond purchases, mortgages rates rise. This has caused anxiety and a flurry of media articles proclaiming doom and gloom. The facts are that whilst rates will rise, the impact on the housing market will be manageable. Mortgages taken out in 2017-2019 on a 5-year term will be up for renewal from 2022 to 2024. These mortgages were on average at 3.79% fixed rates. at renewal date, if the 5 year rate is 3.5%, then these homeowners will see no impact. https://financialpost.com/executive/executive-summary/posthaste-pandemic-homebuyers-face-significant-shock-when-borrowing-binge-comes-home-to-roost
It will be new home buyers in 2022 who might have to adjust their budget and look for homes 10% cheaper than planned. Whilst this may indicate that housing prices will go down, it simply indicates that housing at the entry level will be even more sought after. From first-time home buyers and downsizers, Semis, towns are not likely to see any correction. Supply is low. With new immigration levels set to be targeted to 400,000, higher demand, with poor supply will stabilize any downward trajectory in prices in major urban centers.
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