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Most of the “significant” changes are in the domestic economy where growth is expected to shift away from sectors that have “feasted on unusually cheap and readily accessible credit since the late-2000s” such as new residential construction, renovations and real estate transfer costs, the report stated.
It’s a consequence of the increasing interest rates issued by the Bank of Canada this year, said Ken Peacock, chief economist at BCBC and co-author of the quarterly report.
“A lot of people are highly leveraged because housing is so expensive, and they may have bought a home in the past two, or three, or four years, and now they’re facing interest rate increases and people are going to have to renew their mortgages at some point,” he said in an interview.
