Bank of Canada rate hike will make it harder for first-time home buyers: Chilliwack and District Real Estate Board

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Moniz believes there will be a corresponding domino effect in the rental market as well, creating upward pressure on landlords and investors who own these rental properties.

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“Renters may have a tougher time finding rentals as the investors will have a tougher time getting rents that will cover their costs,” Moniz said. “For those who can afford it, it may give them more buying power as we move towards a buyers market.”

Inflationary pressures remain higher and more prolonged than the Bank of Canada anticipated in its April Monetary Policy Report, the central bank reported. Inflation is expected to hover around 8 per cent for the next few months.

The central bank acknowledged ongoing geopolitical factors like the war in Ukraine, but said domestic price pressures from excess demand are becoming more pronounced.

Consumer surveys indicate more consumers and businesses expect inflation to be higher in the long run, the Bank of Canada said, raising the risk that elevated inflation becomes entrenched in price-setting and wage-setting.

Oil prices remain high and volatile, the central bank said, while labour markets are tight with record-low unemployment rates, widespread labour shortages and increasing wage pressures. Due to strong demand, businesses are passing on higher input and labour costs by increasing prices to consumers, the Bank of Canada reported.

The central bank expects Canada’s economy to grow by only 3.5 per cent in 2022, 1.75 per cent next year, and 2.5 per cent in 2024.