With interest rate hikes reaching 0.5, 1.0 and 1.5 percent so far in 2022, the Bank of Canada hikes are causing confusion and stress for many Canadians, according to a 2022 real estate survey completed by TD.
It found that 38 percent of Canadians don’t know about rising interest rates, while 76 percent who want to buy a home within a year are concerned about the impact the hikes will have on home affordability.
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Chris Guérette, CEO of the Saskatchewan Realtors Association, says the rate hikes are impacting your mortgage on a new home or shopping for a new home.
“For many, you may have to re-evaluate your expectations regarding what you wanted to buy. And for some, unfortunately, that could mean you can no longer afford to be a homeowner,” Guérette said.
The study says that 52 percent of people on the Prairies who say they are likely to buy a home within the next year are currently looking. By comparison, less than half in the rest of the country perform the same search.
The survey shows that 30 percent of Canadians are willing to buy and live in a home with people outside their immediate family. Twenty-nine percent say they would sacrifice outdoor space and 26 percent would for the size of the house.
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Guérette says people in Saskatchewan will look more closely at what they can afford in the big city or elsewhere in the countryside.
“I would say it would definitely be a reality for individuals to travel further afield for something they can afford and want. People are willing to drive about 30 minutes outside the city if the situation is right,” says Guérette.
The survey finds that 31 percent of Canadians surprisingly believe interest rates don’t affect them or their mortgage, pointing to knowledge gaps about both what it means to them and the impact it could have on the household budget.
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The bank has four possible dates of interest rate hikes in 2022, the next is on July 12.
A link to the full release can also be found here.
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