Aaron and Adam are on their own today to talk about the rising interest rates currently being seen in Canada. It is the first time in many peoples’ careers that we’re seeing an interest rate environment like this.
We’ll hear about the implications on the conventional market, on the CMHC-insured product, and on construction. The guys give advice towards different scenarios that higher interest rates are causing and also let us know what we can be happy about regarding the market.
Topics covered include:
- Why there should be upward pressure on cap rates because of bond movements.
- The need for patience when investing in apartments.
- Built-in buffers used in underwriting and why it’s now slightly nerve-wracking.
- The current 5-year Government of Canada bond yields.
- The pricing-in of future rate hikes into bond yields.
- An example of how significant the interest rates increases have been on the market.
- Whether or not Aaron believes that inflation will cause rent increases to soften the blow.
- Why lenders look at bonds for comparison.
- What the best possible deal is on interest rates today for the conventional market.
- Loan amounts coming down for CMHC deals.
- The best interest rate available from CMHC-insured mortgages.
- How much wider cap rates usually are compared to the cost of capital.
- The strength of the employment market right now.
- Advice from Adam on how to mitigate risk in this environment.
- Positive messaging for 2022
More about our hosts…..
Aaron Cameron
In 2008, Aaron began in the Canadian commercial real estate industry at First National Financial. In his journey to becoming Assistant Vice President Commercial Operations, he worked in every department in First National’s commercial division. As a lender, Aaron believes that his exposure to all asset classes, deal types, products and precedents gives him a unique perspective. For Aaron, commercial real estate is an evolving interdependence between economics and relationships. As the co-creator and host of The Commercial Real Estate Podcast, he is excited to offer a platform where real estate leaders can share their stories about how those two fundamentals intersect for them.
Adam Powadiuk
Adam started working in commercial real estate in 2010, and joined First National Financial in 2012. But his interest and passion were piqued early on in life. Growing up in a real estate family, Adam has childhood memories of walking land and touring buildings. He always knew that real estate was a viable career opportunity and a way to contribute to something tangible that affects people’s lives positively.
Prior to co-creating the podcast, Adam spent a lot of time immersed in real estate and talking about it, even outside of work. He wanted to share his love of that banter and analysis, while allowing listeners into the brightest minds in the industry.
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