So far, it seems that the Bank of Canada’s eagerness to raise interest rates has actually sparked the opposite of what was intended.
Canada’s average home price rose more than 20 per cent from the year before in February to $816,720, according to data from the Canadian Real Estate Association.
“Combined with higher interest rates and higher prices, we could be at a turning point where price growth begins to slow down and inventories finally begin to recover after seven years of declines,” Cathcart said.
Inventories can also “recover” due to something else: debtor defaults and foreclosure sales. It probably won’t take long at this point.
There is some rationality to the buyer getting anxious to lock in interest rates by purchasing sooner than later. With inflation running the way it is, being a borrower can turn out. You need to be able to afford the payments. At renewal in 5 years will your earnings be able to afford the new payment? Or will we have had enough inflation that you can just pay it off with lunch money?
Hmmm. Have a residential rental property we’ve been toying with the idea of selling. Thinking it might be a good time.
Thanks to green theocracy and the pathologies of those who successfully get elected on conflicting pieties, housing supply can’t keep up with urban demand. Low interest rates is another incentive for increasing demand. The former is only getting worse while the later will slow demand a little with token increased rates. It will take a serious recession to substantially reduce demand and it will take a cultural earthquake to substantially allow an increase in supply.
Don’t forget about the massive immigration that continues in Kanadastan to this day and will continue. That keeps pressure on both the purchase and rental markets, as BIG government pays the turd worlders rent while they acclimatize to winters, at the expense of lifelong residents.
The economics of this country are a mess for our younger generations. We were lucky in some respects, that we entered the market before it went crazy and are able to retire in relatively decent shape. That is unless inflation destroys that plan for all of us in the meantime (Buy Gold as a hedge).
Exactly. Socialized human importation increases demand while green theocracy along with regulatory quagmire limits supply.
Buying a house is a sort of investment in a country that is not working.
Anything, even a bank account, is an albatross around one’s neck.
A starting point for the great rest.
https://thepoliticalinsider.com/biden-and-obama-must-answer-for-russiagate/
Only invest in Canadian real estate if the residence:
1. Is deep underground or at least 100 kilometers from a major Canadian city.
2. Has sufficient storage to allow you to be self-sufficient in food and energy for ten years.
Something like that will still have value after Putin finally lets us have it. Alas, not many real estate listings meet that description.
Your typical Toronto condo complex promises to be little more than a mass grave for its occupants after the nuclear strike reduces it to so many tons of radioactive rubble.
Perhaps investing in physical gold and silver is the move, but I’m more inclined to invest in physical lead.
With an average of over 800K it should not take much longer for a complete collapse to occur.
North of Toronto is the largest greenbelt in the world, bigger than European countries. Doug Ford (guess the party) will not permit urban development there. As Milton Friedman said: “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”
Ford is like the Ossetian bank robber. Josef Stalin placed a large swath of land in Southern Russia off limits to development in order to protect the Siberian tiger. Ford has placed the greenbelt off limits to protect the sacred tree frog.
An average price of $820,000 requires a monthly payment of nearly $4,000 assuming a down payment of $20,000 and an interest rate of about 4.4%.
$48,000 a year just to service the mortgage – insurance, taxes, and utilities not included.
There’s a “rule of thumb” that says mortgage payments shouldn’t be for more than 1/3 of the monthly income. How many folks are earning over $140,000 a year?