While the ‘renewal cliff’ fears of 2024 were largely managed, a new, quieter threat is emerging for the Canadian housing market. Mortgage strategist Robert McLister warns that recent global instability—specifically the energy supply chain disruptions in the Strait of Hormuz—is stoking inflation, which directly threatens the Bank of Canada’s ability to keep rates in check. With inflation metrics trending upward, the risk of further rate hikes looms, potentially stripping 8.5 per cent of buying power for every 100 basis point increase. For the estimated 36 per cent of homeowners already struggling with payments, this creates a precarious environment. While the long-term fundamentals remain stable, McLister advises caution, noting that current ‘green shoots’ in the market could be deceptive. For a deeper dive into these interest rate dynamics and the potential risks for your portfolio, read the full analysis at the Financial Post.
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