Thank you for the question.
A number of factors are currently impacting the housing market, namely monetary policies and higher interest rates, as you mentioned.
Obviously, interest rate increases go hand in hand with mortgage rate increases. As people start to feel the effects of the increases, their capacity to purchase a first home or enter the housing market will become limited. The increases will also influence the decisions of those looking to purchase a larger home.
This is something we can capture in our modelling. The housing market can clearly support higher interest rates. The new mortgage lending guidelines seem to be having an effect as well. They basically serve as a stress test for borrowers. It's important to make sure borrowers are able to handle higher interest rates.
The data show that, prior to the guidelines coming into effect on January 1 of this year, people decided to purchase a home during the fourth quarter of last year to avoid being subject to the guidelines. That led to a slowdown in the first quarter of this year, as resale housing data show. Right now, we're trying to figure out just how temporary that effect is. The data show that resales peaked in March. According to our projections, the housing market should start to pick up in the second quarter. As far as household debt is concerned, our hope is that a more favourable composition will emerge as the economy begins to reflect the impact of these guidelines.