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Originally Posted by jasonturbo
Eventually the BOC will be forced to push interest rates up to mitigate the impact of inflation and/or to keep bond prices/yields in check. Housing at these prices is only affordable because of rock bottom interest rates, not long after rates start climbing, home prices will fall.
You can tell me I'm wrong, you can speculate all you want, but when people can't afford homes because the monthly payments are too high, the choice to buy is no longer their choice, they simply can't qualify for the mortgage they need.
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I don't know and don't really care about the detached housing market in the near suburbs, but I do know that people are paying cash for townhouses in the Tri-Cities. People are buying them without subjects which is crazy.
Every open house I attend there's probably 20-30 people in there at any one time. Many families - whether they be Asian, Indian Ismali, or white. Financing is largely irrelevant for these people - even if financing is required, these people likely have several hundred thousand accessible for down payments.
Notwithstanding the generation-X white people I'm seeing at open houses, the children of immigrants tend to be marginally successful white collar professionals (accountants, business analysts, health care professionals, teachers, engineers) with good credit, so a mortgage that is a half-million is not that hard to obtain. These jobs tend to withstand challenges to the economy (after all, even the provincial government had to cave in in its recent negotiations with the teachers union, for example). And immigrant families tend to not let children drown, so even if they lose their job, the families will pitch in and keep them afloat. It may be an affront to North American, pull-up-by-the-bootstrap values, but this is how it works in Asian, south Asian, and southern European cultures (e.g. Italian). How often do you hear about an Asian family filing for bankruptcy?
Take this with a grain of salt, but when I talk to realtors about what things are selling for right now, they're selling for 10-20% above asking.
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Originally Posted by jasonturbo
Personally I'm terrified for the financial future of Canada, we have an impending retiree crisis, stagnant wages, sky high housing prices, high taxes, a leader who is so PC he makes Hilary Clinton seem offensive, and abundance of resources that simply may not be as valuable as people once thought.
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The retiree crisis has been talked about for over a decade. Boomers aren't leaving their jobs because they either like to work, they can't afford to retire after losing their skin during the crash of 2008, or they're bankrolling down payments for their kids. The only boomers I know who are retiring are those in public sector organizations where they have defined benefit pensions. And even those people are coming back to work for the same organizations they left because they can come back as consultants and double-dip.
Stagnant wages are real, but I would argue it's largely because shareholders are demanding growth at all costs. We're largely to blame because we expect as much when we're managing our own portfolios. Plus, we're demanding lower prices, shopping on Amazon, etc.
Taxes are high because we have a costly legacy program - health care. Lots of people have health conditions they can't help/prevent, but there are many more people who have neglected their health over the years. The system is good at delaying death, but it is not good at prevention. The Lower Mainland is an anomaly, but if you go anywhere else in Canada, you've got major issues. Alcoholism, weight control/obesity, type 2 diabetes, etc. But, it's politically difficult to call people out on their lifestyles.
Quote:
Originally Posted by jasonturbo
I don't know why I come back to this thread over and over... it's like groundhogs days every page, xx people think housing will go up forever and that the rich Chinese will own the west coast in due time, xx people think that a crash is imminent, xx people get all wound up and start failing posts like anyone cares, xx people get butt hurt over fails, etc...
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I personally come back because you do get posts like yours that do add value to the conversation.