When rate hikes stop, the real estate market will heat up, developer says

Following a move by the Bank of Canada to increase its policy rate this week, one real estate developer said the latest rate hike provides a sense of certainty to the market, which he thinks will heat up once interest rates stop moving higher.

Barry Fenton, president and chief executive officer of Lanterra Developments, said in a panel discussion with BNN Bloomberg Wednesday that interest rates are not the “full driver” of the real estate market. He said that he was “actually pretty happy” that the recent rate hike brought certainty. 

On Wednesday, the Bank of Canada delivered a 25 basis point increase to its policy rate, bringing it to five per cent. The move marked the highest point for the Bank of Canada’s interest rate in 22 years. 

Fenton said even if rates were increased by one per cent this week that “as long as we knew that there was certainty in the market and we were done, I think the market will continue to do very well.”