![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2018\/08\/JPbombales-2458-compressed.jpg\")
<\/a><\/p>\nPhoto: James Bombales<\/em><\/p>\n The Canadian housing market has weathered a series of blows this year, including a mortgage stress test which sent sales plunging in January. But there is another factor placing a downward pressure on the market \u2014\u00a0rising interest rates.<\/p>\n The Bank of Canada hiked the overnight rate to 1.50 basis points in July, and many economists predict it will do so again before the end of the year. According to BMO chief economist Douglas Porter, the fiscal policy is starting to take its toll on the housing market.<\/p>\n\n “There are growing signs that past rate moves are starting to bite,” he writes, in a recent note.<\/p>\n Porter notes that the 100 basis point rise in the overnight rate over the past year has weighed on consumer spending, borrowing, and the housing sector.<\/p>\n “The early return for July home sales suggests that activity is still moderating in much of the country from the 1-2 hit of rising mortgage rates and a tighter regulatory backdrop,” he writes. “While Toronto bucked that trend with an 18 per cent year-over-year rise in sales, this was from very low levels a year ago, and they are still down 30 per cent from two years ago.”<\/p>\n It’s unclear how much pressure rising interest rates will place on the market moving forward, but several industry players are wary of their potential effect.<\/p>\n Earlier this month, Canadian Real Estate Association chief economist Gregory Klump told Livabl that rate hikes could take a bite out of the market in 2019.<\/p>\n \u201cWe\u2019re in a rising interest rate environment, and that affects affordability, what buyers are able to purchase,\u201d he said. \u201cSo we\u2019ll have to see what effect that has on the market in the coming months.\u201d<\/p>\n According to BMO chief economist Douglas Porter, the fiscal policy is starting to take its toll on the housing market.<\/p>\n","protected":false},"author":31,"featured_media":183763,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","apple_news_api_created_at":"","apple_news_api_id":"","apple_news_api_modified_at":"","apple_news_api_revision":"","apple_news_api_share_url":"","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"middle","apple_news_slug":"","apple_news_sections":["https:\/\/u48r14.digitalhub.com\/sections\/09b86915-7d2b-3acd-915b-b215002d01b7"],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[11269],"tags":[],"coauthors":[9678],"apple_news_notices":[],"yoast_head":"\n\r\n SEE ALSO:<\/span>\n3 Toronto housing trends that are dominating the summer market\">
\n3 Toronto housing trends that are dominating the summer market<\/a><\/strong>\r\n <\/div>\n