Let’s look at the big picture.

A conflict in the Middle East might seem far removed from Canada, but global events can ripple through the economy in unexpected ways.  How will the Iran war could influence oil prices, inflation, interest rates, and ultimately the Canadian housing market?

Roughly 20% of the world’s oil supply passes through the Strait of Hormuz, a critical shipping route near Iran.  When tensions rise in the region, oil prices often move quickly.  Higher oil prices can feed into inflation through transportation, energy, and goods costs.  And when inflation rises, central banks like the Bank of Canada may delay cutting interest rates.

With Canadian real estate, mortgage rates are heavily influenced by inflation and bond markets.  If global instability pushes inflation higher or keeps it elevated, it could delay the rate cuts many homeowners and buyers are waiting for.

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