You know housing prices are crazy in Vancouver when...
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H
Hooks
WAIT....until next couple yrs when % rates for mortgages are 10% and going up.
they have been lowest in 75 yrs past few yrs....and it won,t stay that way much longer.
Raise rates , banks and trusts get richer by foreclosing... and prices come down.
they have been lowest in 75 yrs past few yrs....and it won,t stay that way much longer.
Raise rates , banks and trusts get richer by foreclosing... and prices come down.
The years of 10% rates are over. The banks know there are a lot of people who would have to walk away. I can see the government stepping in to stop that from happening.
H
Hooks
you must be very young.. and delusional.
that is exactly the plan and what the banks and trust companies want...
you lose your house , they get it, and the property and you still owe them the money....its happened many times.
it was not many yrs ago when we were paying 10-12%....
shit...CC is 29.7% NOW... so don,t be kidding yourself or your in for a BIG surprise.
government is in same bed as the banks... they wont do anything and don,t give a shit about you.
It will actually be good as it will stop the spiral, and bring prices back down to affordability.
i,m glad i,m old in some ways.
It was 35 years ago, not that many years ago, lol
I agree with SkinnyJohn not going to happen, maybe 3-5% is a possiblilty.
Interest rates move in very long cycles. We may in fact be in a period of raising interest rates, in Canada we may actually see the Bank of Canada raise rates again next week after the very strong 4.5% GDP print. That said, rates move higher very gradually and that allows the economy and borrowers to adjust. I'm sure my mortgage rate will be higher than current when I refinance in 3 years. However my mortgage principal will also be 20% lower, so it won't be a problem at all. Only a spike in inflation would cause more aggressive interest rate moves and inflation remains very muted thanks to technology.
Banks do not do well when homeowners can't pay their mortgage and the banks foreclosure. Remember the US housing crisis just a few years ago. How many US banks failed at that time? Washington Mutual was the largest mortgage generator it it was rescued by the govt, as one example. I don't think you want to all of a sudden be an owner of thousands of properties when prices are collapsing. The math doesn't work.
Banks do not do well when homeowners can't pay their mortgage and the banks foreclosure. Remember the US housing crisis just a few years ago. How many US banks failed at that time? Washington Mutual was the largest mortgage generator it it was rescued by the govt, as one example. I don't think you want to all of a sudden be an owner of thousands of properties when prices are collapsing. The math doesn't work.
Sure if you carry the load by yourself. However, buy yourself a mattress and find a pretty girl to occupy it for a small fee every time she has a male visitor, then you won't even notice the burden of that expense and you will be the owner of that condo in no time. Welcome to Vancouver.
It won't change shit on the price of houses..... Asian money will come in and swoop everything up.... at a fire sale price....
Early 80's interest rates were running in the 21% or so..... scared the hell out of me in wanting to buy my first house.... decided to put it on hold for another 10 years.... before making the move...
In terms of Vancouver housing market, as long ad foreign money is welcomed, no matter what the interest rate is, it will not change anything, except for middle class Canadian buyers.
Foreign money coming in by truck loads buying every single square foot of property available.... and if it's not available... will do what ever is possible to buy it... with out asking where the money comes from or how has been obtained... no questions...
Canadian on the other side that go in a bank for a mortgage , well your credit has to be close to perfect, if not perfect....and proof of how long you have had that downpayment sitting there in the bank... not in your mattress... and that is hoping you have the 25% down payment banks like so much... if not, if yoh are below that margin... well you better line up a bus load of co signers or have your mortgage guaranteed by paying an additional 1 or 2 %.
Fuck .... you never know... you may 1 day turn the key to your front door and take off down the road with the house and disappear ...then the bank would be screwed....
You look at those people renting houses or apartments... and will not qualify for a mortgage... but at the same time.what they are paying in rent is already covering mortgage, taxes, and strata fees for some other bloke who bought it.... but hey ... you don't qualify for a mortgage sorry.... let's create a separation.. between those who qualify... and those who dont...
Foreign money coming in by truck loads buying every single square foot of property available.... and if it's not available... will do what ever is possible to buy it... with out asking where the money comes from or how has been obtained... no questions...
Canadian on the other side that go in a bank for a mortgage , well your credit has to be close to perfect, if not perfect....and proof of how long you have had that downpayment sitting there in the bank... not in your mattress... and that is hoping you have the 25% down payment banks like so much... if not, if yoh are below that margin... well you better line up a bus load of co signers or have your mortgage guaranteed by paying an additional 1 or 2 %.
Fuck .... you never know... you may 1 day turn the key to your front door and take off down the road with the house and disappear ...then the bank would be screwed....
You look at those people renting houses or apartments... and will not qualify for a mortgage... but at the same time.what they are paying in rent is already covering mortgage, taxes, and strata fees for some other bloke who bought it.... but hey ... you don't qualify for a mortgage sorry.... let's create a separation.. between those who qualify... and those who dont...
I follow macro economic issues very closely and something which has happened over the past 15 years is that governments have clued into borrowing being another form of taxation. (just delaying the collection) As such we are at incredible sovereign debt levels and the governments can no longer have any hope of repaying that debt if interest rates went much over 3%. This is why especially the US government and the Fed are keeping interest rates low. To allow them to begin to rise when we get back into an inflationary cycle would bankrupt the western nations. Do the math on the debt and interest rates and you will see what I am talking about....
I'll stress again the incredibly long cycle of interest rates and bond yield curves. Central Bank have had the last 10 years to retire old high coupon debt and replace it with new low interest debt. As an example Canada has been issuing debt 30+ years at 3% or thereabouts. So rates couple spike to 10% and it wouldn't impact that pool of debt for 30 years until it matures. So while Bank of Canada rates get headlines, impact my line of credit and move the dollar, they do virtually nothing to long term government debt, which is the vast majority of all outstanding.
When looking at debt, one must also look at ability to pay that debt. So while Canada and the US have large sovereign debts, they also have a great ability to service those debt. If I have $1 mln is debt and make $300k per year, I'm fine. If I make $50k, not so much. The bond market is more viscous than the stock market. When bond traders sniff a problem they will pummel sovereign debt. Think Greece or Venezuela, whose debt trades at 10 cents on the dollar. The bond vigilantes keep everyone honest. When they get worried, that's when I'll get worried.
My take
When looking at debt, one must also look at ability to pay that debt. So while Canada and the US have large sovereign debts, they also have a great ability to service those debt. If I have $1 mln is debt and make $300k per year, I'm fine. If I make $50k, not so much. The bond market is more viscous than the stock market. When bond traders sniff a problem they will pummel sovereign debt. Think Greece or Venezuela, whose debt trades at 10 cents on the dollar. The bond vigilantes keep everyone honest. When they get worried, that's when I'll get worried.
My take
