The Bank of Canada’s October rate hike to 2.5% threatens to deepen an already struggling housing market, with projections showing the sector will shrink by 1% in 2026. Senior Deputy Governor Carolyn Rogers warned that Toronto and Vancouver will feel the biggest impact as borrowing costs rise and consumer confidence erodes. The central bank now expects housing to contribute just 1% to economic growth over the next two years—a dramatic shift from historical norms. Developers face mounting pressure from higher financing costs and inflated building material prices, while homebuyers report increased uncertainty and longer sales timelines. In the Ottawa region, average days on market have climbed to 48 days despite lower prices. Real estate professionals are advising buyers to lock in mortgage rates immediately rather than risk variable-rate exposure. This confluence of factors—geopolitical tensions, elevated energy prices, and monetary tightening—signals a prolonged cooling period for the GTA market. Read the full analysis on CTV News for expert perspectives from industry leaders and affected homeowners.
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