Quote:
Originally Posted by Carl Johnson
A watched pot never boils. Too many housing bears watching for a major correction therefore it probably will not happen. For housing to have a significant correction in Vancouver and rest of Canada, interest rates needs to go up a lot more than where it is today. Rate were 5+% back in 2007. So 3% on the US 10-yr today is still pretty low by that measure. You also have to believe Canada is going into an economic contraction of some sort which is not likely in the next year or two.
That is not say it's all clear and buy a house. Each person has their own needs and preferences. I am renting because I just don't see any value in Vancouver properties compare to properties in California. The house I am renting (which the owner tried to sell) has a staggering price to rent ratio of 70. The return he is getting from my rent before tax doesn't even keep up with inflation. But if you are wishing for a blood bath (30-40% price correction) like what happened in US then you are probably dreaming.
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You totally contradict urself here, price to rent of 70, guy can't sell - no bubble?
As for Canada's economy... I'm not so sure about this one, real estate makes up way too much of our economy, and it really shouldn't
It will go back to long term, inflation adjusted norms, whether today, 1 year from now, or 5 years from now, it will happen, that's why they call it the 'norm' or long term average (and no, we're not into some new kind of new higher average)
Fundamentals rule, it's why Tesla's stock will come down, not today, as it has too much momentum, but it will come back down to good growth company fundamentals - vancouver and the rest of Canada's real estate is like a momentum stock, just on a way bigger scale