Quote (Killingyouall @ May 23 2020 08:55am)
Ya that is a good example..... What a tire fire.
I worry about that too. It is funny how much times have changed. Decades ago you could buy Government backed bonds/Gic's with 18% interest rate! Now you are lucky if you get 2%.
That will not even cover inflation.
Interest rates are very low at the moment and that is not even spurring economic growth. Not a good sign, coupled with all the money being handed out.
Canada is a big international investment destination nowadays so interest rates don't need to be jacked up too much if we run out of capital. That said, even a few % increase would be catastrophic because of the debt load of the population. And they keep taking more because we're trained to buy buy buy.
Good example... saw a 1992 700 sqft condo located in a kinda sketchy area of Victoria (something like Strathcona) for $500/sqft, which is maybe 5-7% under market. Except it was a LEAKY condo, they haven't fixed the envelope for decades. Owners there will get sodomized sooner than later.
...still sold within 48 hours.
Now imagine the poor sods buying now putting 5-10% down, by the end of the year their downpayment will literally be wiped out of the equity and it's highly unlikely prices will recover enough by the time they need to renew their mortgages - where rates will almost surely be several points higher.
Even people who bought over the last 2-3 years are likely to get fucked hard, they will have to renegotiate rates at the absolute worst moment possible.