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But for Whistler employees, who have less discretionary income, interest rates mean more risk.
"More people are giving serious consideration to fixed-rate mortgages than they were even 18 months ago, when everyone was on a flexible-rate mortgage," said Kelly. "Certainly there’s more risk with a floating rate, and a lot of people don’t handle risk well – especially young families that want predictability for the future. I’d advise that if you don’t have the resources to deal with rate changes every three months, you should give serious thought to the fixed-rate option."
Robyn Adamache, market analyst for the Canadian Mortgage and Housing Corporation, Lower Mainland, says their office has not seen much of an impact from rising rates. If anything the demand for new and resale homes has increased, resulting in some of the highest real estate prices in the country.
She expects housing prices to continue to increase this year but at a slower rate due to a 36 per cent increase in housing starts compared to last year.
"In recent years the housing starts were flat for a lot of reasons – various constraints on builders because of the lack of skilled trades available, as well as a lack of land priced well enough to still be profitable for development," said Adamache. "What’s happened is that (developers) have found a way around those constraints. They’re more efficient at scheduling trades, and municipalities have found a way to get building permits through faster, making it economical to build again."
Adamache does not have specific figures for Whistler, but says sales numbers show that property ownership is still a main priority for families.
"Whether or not (interest rates) go up or down, people continue to buy. An increase in price just means people find other ways to afford their (mortgage) payments, ways to work it into their budget," she said.
The Bank of Canada decided to raise overnight lending rates by another quarter point on Wednesday to 4.25 per cent, a five year high. According to the bank, the seventh consecutive increase was required to keep inflation under control as the economy continues to outpace expectations. Despite fluctuations in gas prices, natural resources and other commodities, and a rise in the value of the dollar, domestic demand for goods and services is expected to remain solid through the summer.
Analysts quoted in Canadian newspapers are divided as to whether interest rates will stabilize or continue to increase through 2007. A few analysts also believe that the growth of the economy will eventually slow or stall due to factors like gas prices, and that rates will fall.