Higher rents, housing costs to hinder future success of large Canadian cities: Economists
BNN Bloomberg
The latest round of interest rate hikes in Canada is likely to send the costs of rent and housing even higher, and as people battle with affordability, large cities could very well feel an economic blow, economists say.
As of Wednesday, the Bank of Canada’s overnight lending rate has risen to 5.0 per cent. The speed at which the BoC has raised rates to temper inflation is likely to slow the construction of new homes — making Canada’s housing shortage worse, experts warned.
In this environment, economists are arguing that high shelter costs, such as soaring rent, will push workers out of large Canadian cities and slow the country’s future economic success.
“When housing becomes unaffordable, people are forced to move further from larger Canadian cities and this often has a direct impact the success of those economies,” Stephen Brown, senior Canada economist at Capital Economics, told BNNBloomberg.ca on Thursday.
