Higher incomes and lower interest rates have allowed Canadians to take on larger mortgages during recent years, a new study found.
Those factors have also pushed the price of homes through the roof, according to the Fraser Institute report.
“Increased borrowing power — brought about by falling interest rates and rising incomes — is potentially the most overlooked and least understood factor influencing home prices across Canada,” said Niels Veldhuis, president of the Fraser Institute.
The study — Interest Rates and Mortgage Borrowing Power in Canada — says that between 2000 and 2016, interest rates dropped from 7% to 2.7%.
During that 15-year period, the lower interest rates … more