Quote:
Originally Posted by 68style
I dunno what anyone expects... even at those prices you cannot break even on a mortgage on a new build.
It's impossible without a crazy downpayment between the mortgage payments, strata fees, property taxes, insurance etc... and the whole situation is becoming impossible.
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IMO the rent is going to go way higher.
The interest rate for a mortgage is at 6% range. Even if the market suddenly crash 30% overnight, your comment would still hold.
In RE, the general rule of thumb idea of equilibrium is that the rent is equal to roughly the mortgage payment with 20% down.
So, one could do their own math how far we are from the equilibrium. Yes, the RE of YVR is inflated. But it's going to take a while before the whole market correction come into play.
In the mean time, since the equity is not rising (price of RE), landlords are going to continue to rise their rent to justify their ROI.
And for a good chunk of people who bought into the market with fixed mortgage at sub 4% level, they are not going to sell because whatever they move, the cost of financing is so much higher. And since it's almost like bank is paying them to hold the mortgage, they are not in a hurry to do anything about it.