![\"Bank](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2017\/09\/Bank-of-Canada-rate-hike.jpg\")
<\/a><\/p>\nPhoto: James Bombales<\/em><\/p>\n As was widely expected, the Bank of Canada (BoC) hiked the overnight rate to 1.75 percent today.<\/p>\n Higher interest rates inevitably lead to higher mortgage rates, which means industry players keep a close eye on the BoC\u2019s hikes, and how they could affect Canada\u2019s housing market.<\/p>\n\n Rising rates could spook would-be buyers, placing downward pressure on the market. And, according to CIBC economist Avery Shenfeld, it looks like the Bank might be hiking rates at a faster pace heading into 2019.<\/p>\n \u201cThe tone [of the Bank\u2019s announcement] was more hawkish than we expected, dropping the reference to \u201cgradual\u201d for hikes ahead (which markets will see as leaving the door open for two in a row, meaning a hike in December), and asserting that rates will have to keep climbing to \u201cneutral\u201d, which the Bank has estimated as near 3 percent,\u201d he writes, in his most recent note.<\/p>\n Most economists agree that the rising-rate environment has had a positive impact on the Canadian housing market, helping to take it from bubble territory in 2017 to today\u2019s more balanced conditions.<\/p>\n \u201cCanada\u2019s previously hot housing market and robust household borrowing trends have given way to much calmer activity in 2018, and that\u2019s a good thing,\u201d writes Douglas Porter, chief economist at BMO, in a recent note.<\/p>\n