A house for sale in Toronto’s Cabbagetown neighbourhood.Ammar Bowaihl/The Globe and Mail
For many buyers and sellers immersed in the spring rejuvenation of the Toronto-area real estate market, the Bank of Canada’s recent interest rate hike came as a sudden jolt.
The central bank’s rate-setting committee raised the benchmark rate by 0.25 points to 4.75 per cent in June after recent data showed the country’s economic growth was surprisingly robust in the first quarter. The Bank of Canada had paused a series of rate hikes earlier this year as the rate of inflation fell towards its target rate of two per cent but it has remained stubbornly high.
Industry professionals say calls flooded in from potential buyers, investors and existing homeowners as they grappled with the possible repercussions. Showings also slowed down in the days after the announcement as aspiring buyers absorbed the news,