With interest rate increases to .5, 1.0 and 1.5 per cent so far in 2022, the Bank of Canada’s increases are causing confusion and stress for many Canadians, according to a 2022 real estate study completed by TD.
It found 38 per cent of Canadians are confused about what is rising interest, while 76 per cent who want to buy a home within the next year are worried about the impact the increases will have on home affordability.
Saskatchewan Realtors Association CEO Chris Guérette says the interest rate hikes have an effect on your mortgage on a new home or shopping around for a new one.
“For many, you may have to re-evaluate your expectations in what you were looking to buy. And for some that may, unfortunately, mean you can no longer afford to a be a homeowner,” said Guérette.
The study says 52 per cent of people on the Prairies who say they would likely buy a home within the next year are currently searching. By comparison, fewer than half across the rest of the country are conducting the same search.
The survey suggests 30 per cent of Canadians are willing to buy and live in a home with people from outside their immediate family. Twenty-nine per cent say they would sacrifice outdoor space and 26 per cent would upon home size.
Guérette says in Saskatchewan people will look closer to what they can afford in the major city or elsewhere in rural areas.
“I would say it would absolutely be a reality for individuals to travel further for something they can afford and something they want. People are willing to drive roughly 30 minutes outside the city if the situation is right,” said Guérette.
The study says 31 per cent of Canadians surprisingly believe that interest rates don’t impact them or their mortgage, highlighting knowledge gaps around both what it means for them, as well as the impact this could have on household budgets.
The bank has four more potential dates of interest rate increases in 2022, the next being on July 12.
A link to the full release can also be found here.
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