NEWS

The majority of renters in Canada doubt they will have the ability to purchase a home in 2022 because of the continued increase in interest rates and high inflation. Although the Canadian housing market is cooling for the most part, across the country, the Bank of Canada’s multiple rate hikes are becoming the deal breaker when thinking of buying. The increase in rates are creating higher mortgage payments and post pandemic property taxes are not going down either. “Canadians will continue to see homeownership as increasingly challenging”, said Paul Orlander, Executive Vice President of Individual Customers at Canada Life.

According to a recent survey by Canada Life, about 73% of those respondents who are renters said it’s a bad time to buy a house while 17% said they would never buy one. The main reasons given for staying away from buying were a lack of money, fear and uncertainty. With inflation reaching 7.7% (May 2022) and an expected rate hike of 75 basis-points by the Bank of Canada on July 13, 2022, their rationale is not surprising.

Mr. Orlander has stated that homeownership and the cost of maintaining a house could create an issue for Canadian trying to save for retirement and believes renting is a practical option right now if you wish to maintain flexibility or need to protect cash flow for savings and retirement.

Source: The Motley Fool