The increase in the key rate will lead to an increase in rental prices and will deter real estate developers from investing in the construction of new housing, estimates an association of real estate owners in Quebec.
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“Obviously, this situation will have an inopportune upward effect on the price of rents. Inflation affects our members and the increase in the interest rate by the banks considerably reduces the leeway of rental owners wishing to invest,” said Marc-André Plante, Director, Public Affairs and Government Relations for the Corporation des real estate owners of Quebec (CORPIQ), by press release.
Note that on Wednesday, the Bank of Canada raised its key rate by 1% to 2.5%. In the process, several banks raised their prime rate in Canadian dollars from 3.70 percent to 4.70 percent.
Mr. Plante believes that this increase will deter real estate developers from investing in the construction of new housing. This, in a context of “real estate market imbalance”.
According to a survey carried out by the organization, 30% of the 1,000 owners questioned intend to reduce future investments for renovation.
“CORPIQ is prepared to collaborate with all partners in the housing sector. Our members are part of the solution to remedy the current housing crisis across Quebec,” added Mr. Plante.
Listen to Patrick Déry’s interview with Marc-André Plante on QUB Radio: