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Canadian Imperial Bank of Commerce (CIBC)
Symbol CM
Shares Issued 904,692,428
Close 2022-09-07 C$ 61.84
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Globe says RBC, rivals see real estate outlook darken

2022-09-08 07:15 ET - In the News

See In the News (C-RY) Royal Bank of Canada

The Globe and Mail reports in its Thursday edition that Canada's real estate slump is about to deepen, as the rising cost of borrowing pushes more buyers out of the market, economists predict. The Globe's Rachelle Younglai writes that the BOC on Wednesday raised its overnight lending rate to 3.25 per cent from 2.5 per cent. The BOC said the rate will need to go even higher to dampen inflation. Since the BOC started lifting interest rates from the low of 0.25 per cent in March, home sales have plunged along with home prices. RBC economist Robert Hogue says, "We see the downturn intensifying and spreading as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates." So far this year, home prices have recorded their sharpest five-month drop since the global financial crisis in 2009. The national home price index is down 6 per cent from its peak in February. The Globe says the index is the industry's preferred measure of home prices because it adjusts for volatility and excludes the high end of the market. Mr. Hogue says the country's priciest real estate markets are the most vulnerable to declines because of their unaffordability and their previous astounding price increases.

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