Bank of Canada Raises Rates to 2.5%, Yet High-End Properties Continue to Sell
The Bank of Canada raised its main interest rate by 25 basis points to 2.5 per cent, the first hike in three years, which is expected to increase mortgage costs and slow residential real estate sales. Despite this, high-value properties across Canada—including a Toronto home, luxury cottages in Ontario, a renovated boutique hotel in British Columbia, and a converted Gothic church in New Brunswick—continue to attract buyers and developers.
The Bank of Canada raised its main interest rate by 25 basis points to 2.5 per cent on Wednesday, marking the first hike in three years. The move is expected to make variable-rate mortgages more expensive and further slow the slumping housing sector.
Despite the anticipated slowdown in residential real estate sales due to higher mortgage costs, specific high-value properties have continued to sell quickly or above asking price. In Toronto, a custom-built family home sold for $2 million—$101,000 over the asking price of $1,899,000—in just two days. Listing agent Nutan Brown of Royal LePage noted that the home's four bedrooms and three full bathrooms on the second floor were "unheard of" features contributing to the quick sale.
In Ontario's cottage country, high-end buyers remain active despite economic fluctuations. An 11.3-acre property on Lake Rosseau with 602 feet of shoreline sold for $8.699 million in late September after being reduced from an initial asking price of $8.999 million. Broker Paul Crammond reported seeing first-time buyers paying top dollar for large family cottages on lakes such as Rousseau, Joseph, and Muskoka, with one recent sale exceeding $10 million.
Developers are also investing heavily in transforming historic buildings into modern spaces. In Victoria West, British Columbia, developer Lenny Moy invested $25 million into a maximalist refresh of the Rosemead House boutique hotel, formerly known as the Old English Inn. To furnish the renovated inn, Moy purchased thousands of antiques at auctions from British hotels like the Dorchester and the Savoy.
On the East Coast, property developer Martin McNamara converted a Gothic structure finished in 1892 in Saint John, New Brunswick, into a spacious residential home featuring re-exposed stained-glass windows.