Rising interest rates across Canada to likely induce drop in B.C. housing prices: RBC

A slight price correction in the Canadian real estate market could be seen in the next 24 months, according to a housing forecast done by RBC.

This price drop will be casued by rising prime rates – as the bank of Canada has hiked its key rate twice already this year.

Robert Hogue, a senior economist with RBC, says rates in BC could fall almost four per cent, and in Ontario 2.3 per cent by the end of 2023.

“It may not happen necessarily overnight or in the month of April, but we see that as we move into the second half of this year, with the Bank of Canada continuing to raise interest rates fairly significantly, this is where we’re likely to see some some upgrade decline,” he exaplined.

“When you look at the actual price levels, we’re going to see them flatten and potentially starting to decline to a certain extent.”

Hogue adds, that although the price drop should be welcomed by many home buyers, don’t expect housing prices to fall off a cliff.

“If [prices are] coming down because interest rates are rising; therefore mortgage rates are rising.”