Interest rates have gone up! What does this mean for the market?

One of the biggest pieces of Real Estate news we've seen in the last few weeks has been the rise of interest rates, as the bank of Canada has raised its key lending rate to 0.5 from .025 percent.
The rate hike has been speculated for some time, so its not that surprising to see. We've been heading rumours of interest rate hikes for months, with experts and others suggesting that we could see upwards of 4/5 hikes in the next 24 months.

Here's some thoughts:
Yes, this hike was expected and needed with what is happening in the world, it may very well be the first of a few. What probably will not happen is rates spike to the point that they reach the levels of 1992, where rates hit 18/19 percent for some.

A bit of context is needed here. Yes, the overnight rate is now 0.5 percent, but does anyone remember where it was pre-pandemic? IN March of 2020, the overnight rate was 1.8. There was and is no world where interest rates would stay at 0.25 as the world re-opened, and as the issues with supply chain, communities issues that are prevailing in Europe.

The last time we saw rates in the 0.25 area was 2010, fresh off the US economic collapse. On June 2010, the Bank of Canada raise the overnight rate from 0.25% to 0.50%, and hiked it two more times after that. The rate remained at 1.00% until it dropped again in 2015.

So what does this all mean? We have always seen fluctuation in the interest rates and will continue to do so, interest rates have fluctuation and worldwide events, be it a pandemic or financial collapse as we saw in 2010, the banks will react.

Through all that, we never saw rates climb to the point where it was unsustainable and unaffordable, outside of a few blips. When I bought my first home, I felt lucky that I was able to get a 4.5 rate locked in, every home I’ve purchased since then have seen that rate lower and lower. I do not anticipate 0.50 to remain, however, history educates us with regards to the future, and when there have been worldwide issues, we see reactions, but nothing that should be labeled a crisis or significantly concern home owners.

If you are on a fixed rate, your good, keep making your payments and smile. If you are on a variable rate, be in contact with our broker and monitor what their thoughts are. Honest, I can't see rates going high enough that it becomes worth locking something in, but don't take my word for it, talk to your mortgage broker.

Interested in learning more about your buying options? Lets chat


Development News: Lakeport Beach in Grafton

Anyone who knows me knows I’m a development nerd. I love learning about new projects coming to areas of the municipality, looking at  the pros and cons of the plan and educating myself, and my clients, on how this could positively affect their standing in the market.

One area that I’ve been keeping an eye on is the old McQuillan property in Grafton, off Lakeport Rd. Originally, the plan was for 68 estate homes, the land was sold in April of 2021 to a developer who has a different plan for the land.

Introducing Lakeport Beach, a development by LandLab.

LandLab's plan for Lakeport is an ambitious one. They hope to bring 800 new homes to the approx 200 acre site, with a mix of single family homes, townhomes and cottages, while also allocating a percentage of the site to ground floor senior units. The plan for the site will see a public beach, a series of public parks, pedestrian networks thought out and as previously mentioned, a mix of housing types. Theyalso hope to offer 10 percent of the homes at 10 percent less then the average market value at the time of launch.

The idea is grand and in theory one that is needed in Northumberland, we need more housing types coming to market yesterday, however there are some legitimate concerns and questions about the plan. First and foremost, there is a genuine lack of services at the area. I believe the previous plan would have seen well and septic on each of the  68 lots, with a subdivision of 800 homes, I’m not sure that is possible. Landlabs has a plan to add a water treatment plant to the location. Secondly, transportation will be an issue.  There will need to be a major investment in road and transportation networks to bring this level of development to the area. It can be argued that this area needed some of that regardless, but with this project, there is no doubt now.

Landlabs has a pretty grand plan and one that on paper, looks pretty impressive. I love the potential that the plan brings, the location is fantastic and  the neighbourhood, if designed correctly, can rally add to the area and more importantly, add inventory to an area that desperately needs new home inventory. I look at the impact that Mason Homes development in Port Hope and New Amhurst in Cobourg have had on their local areas, elevating and under used pocket of land to develop it into quiet, mature neighbourhoods.

I hope that both Landlabs and the Planners can come together to find a way to make a version of this plan happen, its exciting to see and as previously mentioned, new housing is desperately needed in this area given the record levels of low inventory on the market.

Click here to view LandLabs submission to the municipality.

Read more about why I view new home developments are a great option for those looking for housing.

If your interested in hearing more about new home developments in Northumberland, lets chat.


I have sold a property at 27 Toronto ST in Cramahe
I have sold a property at 27 Toronto ST in Cramahe.
Renovators Dream! Affordable Starter Home Located In The Quiet Village Of Colborne Ontario. Within Walking Distance To Shopping, Groceries, Library, Public School And Park. Located 5 Minutes South Of The 401 For Easy Transit. Some Recent Updates Include: Bathroom Shower And Tub Exposure, Hydro Panel, Wiring, Windows Replaced (Past 12 Years), Shingles Replaced In 2006.