Canadian Debt Outlook - Q2 2022
Strong market fundamentals collide with rising cost of capital. How are markets responding?
- Scott Figler
- Claudia Verno
- Alison Chave
As inflation reaches its highest point in many decades, the Bank of Canada has increased its target overnight lending rate by 75 basis points thus far, with another 100-150 basis points hike likely by the end of 2023. This is trickling down to the commercial real estate industry in the form of higher interest rates on all debt instruments. Though market fundamentals remain generally strong across Canada, the shifting debt landscape will impact investment decisions for lenders as well as for borrowers.