Quote:
Originally Posted by donk.
I got home, looked it up, and it seems like china has not had a spike in interest rates, at all. It dropped during covid, and it kept dropping to this day.
There is no x2-x3 interest rate hikes in china like the rest of the world is seeing.
While 1% rates don't exist, the bank rate seems to be sizzling at 3%ish?
Rumor has it, the whole evergrande, plus housing problem is causing havoc, and the banks are trying to promote buying homes by keeping the rates low.
How much of this is true, I don't know, I'm sure 50% of this forum could chime in for better info.
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China is doing the same as what other countries have done already--lowering interest rate to stimulate the economy. Had they not have done that, their housing market would shatter, simulating a 2008 housing crisis in China.
Interest rate low -> People borrow -> Buy Assets -> Cost of Assets rise (housing, equities).
Notice this equation is borrow/loans. They will probably face inflation too down the road.
Other developed countries are ahead of this curve (US, Canada) and we face inflation and are now jacking up rates to counteract this because high inflation is not good for anyone.
You guys need to know cheap credit is like a drug. It's likened to steroids. It artificially jacks up your economy but when you have to raise interest rates, you suffer withdrawals, and the symptoms are a recession.
Vancouver is very insulated from interest rates. There's a large amount of people that actually have cash and are waiting on the sides to jump in on a deal. But you can see the effects already in some markets such as Toronto, or the US.
The recession is coming, how it affects Vancouver real estate is probably pretty minor. But elsewhere, it's going to be bad.
Have any of you been dining out at restaurants recently? Popular places are still popular. But a lot of places are much less busy. I was at a restaurant last Wednesday and for an hour it was just myself and my gf, no other customers. 3 waiters, 5 chefs on Robson St.
With the way interest rates continue to rise (US), I have a contrary view that Canada may raise their rates one more time. Perhaps.