The Bank of Canada’s decision to hike interest rates in July could put further financial pressure on over leveraged landlords and leave tenants in a precarious situation, one realtor is warning. 
The BoC hiked rates by 25 basis points on Wednesday, bringing the overnight lending rate to 5.0 per cent. The aggressive rate hikes by the bank has already caused some landlords to sell their investment properties as costs are simply too high to cover -- and July's hike will be a breaking point for many other landlords, Davelle Morrison, broker at Bosley Real Estate Ltd, told BNN Bloomberg in an interview on Wednesday. 
“You’re about to see more investors looking to unload their properties,” she said. 
Morrison explained that in this environment tenants must be very diligent in maintaining a respectful and honest relationship with their landlords. 
“Tenants need to be on their best behaviour right now as they could be displaced at any moment if they give over leveraged landlords a hard time. The landlord could very easily say ‘that’s it – I’m out,' given the financial stress,” she explained. 
Renters who fail to make rent payments, pay late or give landlords problems are at risk of being displaced in a very high rental market that they’re not used to, she warned. 
“A lot of tenants have to remember that their situation is precarious. The low rents that may have secured in the past no longer exist and they will be shocked if they enter the rental market now,” Morrison warned. 
She only expects rent to rise from here as interest rate hikes will force landlords to up prices in order to keep up with the higher mortgage costs. 
Tenants are not only facing higher rents, but they are also up against limited supply — both are problems that are only made more challenging through these rate hikes, another realtor warned.
“Rate hikes discourage the development of new properties and rental purpose-built properties as demand drops amid the heightened costs,” Noam Dolgin, realtor and co-founder of CoHo BC, told BNN Bloomberg. 
“Even if you can afford a condo to rent – the chances of finding one has become a bit of a herculean task,” he said. 
It’s important that tenants push their local government for solutions like collective living arrangements and demand for more rental properties to be built, Dolgin advocated. 
In the end it’s not just renters that get burned, it’s also the success of Canadian cities, he warned. 
“If workers are priced out of big cities, then companies will have a hard time retaining employees, and this will be critical to economic success,” Dolgin said. 
“These increased rental rates aren't just about pricing, it’s detrimental to the success of our cities,” he added.