Rising Interest Rates Influence Homebuyers

Growth in residential construction was mixed across Canada's six largest census metropolitan areas (CMAs) in 2022, as housing starts increased in Toronto and Ottawa, ON; and Calgary and Edmonton, AB; remained unchanged in Vancouver, BC; and decreased in Montreal, QC; says the ‘Canada Mortgage and Housing Corporation's (CMHC) Housing Supply Report (HSR).’ It says significant increases in interest rates influenced the activities of both developers and homebuyers as 2022 progressed. The full impact of the increase in interest rates is not yet reflected in the ‘CMHC Housing Starts and Completions Survey.’ “In some centres, seasonally adjusted housing starts began moving lower at the end of 2022 and early 2023. The higher interest rate environment will likely slow construction activity in more centres in 2023,” says Francis Cortellino, senior specialist for housing market analysis at CMHC.