“A lot of families are on the edge”: BC Premier says interest rate hikes causing angst within housing sector

BC Premier David Eby is relieved the Bank of Canada elected to hold its key interest rate at five percent, the highest mark it’s been in over two decades.

At the end of August, Eby along with Ontario Premier Doug Ford wrote letters urging Bank of Canada CEO Tiff Macklem to halt further rate hikes and outlining the impacts they are having on everyday citizens.

The bank has raised its rates ten times since March of last year to reign in inflation.

During a news conference in Victoria today (Wednesday), Eby noted the rate hikes have had huge implications on the housing sector, particularly mortgages.

“A lot of families in our province are on the edge right now. The reason they are on the edge right now is unprecedented run-ups in interest rates – many people were in variable-rate mortgages while others were in what were affordable fixed-rate mortgages and now they are having to look at renewing and in this higher interest rate environment, they aren’t sure how they will be able to do it.”

He added the hikes have added even further unintended consequences for the BC’s housing sector.

“Unintended impacts of these rate increases occurred on a number of rental housing projects being put on hold causing rents to go even higher and exceeding inflation instead of reducing it.”

Eby hopes his plea gave the Bank of Canada a little bit more to think about in the future.

“I am certainly hopeful the governor read my letter of the situation faced by people in British Columbia and I hope he incorporated that in his decision-making. I think it is important for our decision-makers to hear from people on what the actual effects are on the ground from their decisions.”

Eby also wrote a Stats Canada update in July stating that the largest contributor to inflation in Canada was mortgage rates.

September’s inflation rate came in at three-point-eight percent, still higher than the Bank of Canada’s target of two percent.