While the transitions through business cycles can affect consumer confidence and create uncertainty in the financial markets, it’s important to realize we are still a long way off from 20% interest rates, and remain, at present, in historical low territory. Having said this, it’s obvious that a 3.25% increase in the BOC benchmark rate over just a 6-month period will have some tangible consequences. I am going to outline the facts behind affordability in the commercial real estate sphere compared to 12 months ago, and outline how this is affecting our owner/user clients (those who would occupy their own building) and our investor clients (who are looking for tenanted assets with a return on their money). Spoiler alert… property values are (gradually) eroding.
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