Real Estate Talks

Downtown is a cesspool, trust me, I know. I'm down there every day for 10+ years.
You couldn't pay me to live there...noise, traffic, panhandlers...
If you're under 30 or over 70 it can be useful. I'm not.

I'm not sure what this has to do with an interest rate thread. Suggest you start a separate thread about your likes and dislikes. Thanks.

Downtown is a cesspool, trust me, I know. I'm down there every day for 10+ years.
You couldn't pay me to live there...noise, traffic, panhandlers...
If you're under 30 or over 70 it can be useful. I'm not.

I'm not sure what this has to do with an interest rate thread. Suggest you start a separate thread about your likes and dislikes. Thanks.

Talk to geyser. He hijacked the thread with his envy

Downtown is a cesspool, trust me, I know. I'm down there every day for 10+ years.
You couldn't pay me to live there...noise, traffic, panhandlers...
If you're under 30 or over 70 it can be useful. I'm not.

I'm not sure what this has to do with an interest rate thread. Suggest you start a separate thread about your likes and dislikes. Thanks.

Talk to geyser.  He hijacked the thread with his envy

Frankly, my dear. You're being childish.
You're getting more emotional and derailed. Is this forum too stressful?

Downtown is a cesspool, trust me, I know. I'm down there every day for 10+ years.
You couldn't pay me to live there...noise, traffic, panhandlers...
If you're under 30 or over 70 it can be useful. I'm not.

Sorry ETB, looks like Jimtan has got you made.


And thanks for explaining why Downtown is soooo much more expensive than your distant, scruffy suburb. Are you sure it wasn't the long commute and seeing all the luxury cars, expensive shops and high-end restaurants that made you so bitter? Remember, you do have a KFC within fairly easy walking distance of your home, what more can life offer?

Check out this realtor's link and see how many of your 80 year old fixer-uppers you would need to sell to finance just one of the higher end condos in a much more desirable area. There are good reasons why people pay big premiums to live in the more attractive parts of Vancouver.

Hey, don't get too depressed with your situation, we all need something to aim for, even if it's an unreachable dream for you. Check out the link and never let go of your dreams.

http://www.mikegrahame.com/vancouver-luxury-condos

Oh, I forgot to add, I think interest rates have just started a long upward trend back to historically normal rates. I'm hoping it will be a slow steady rise because when rates have shot up suddenly in the past it has been disastrous for many overleveraged people as their property prices crash and their mortgage costs skyrocket.

If you doubt my words, check out what happened in 1982 when Vancouver homes lost between 40% and 50% of their value in less than a year. I don't think anybody wants to see a repeat of that. Of course the collapse in Tokyo was much, much worse. Tokyo homes lost 90% of their value and decades later are still far below peak prices.

Oh, I forgot to add, I think interest rates have just started a long upward trend back to historically normal rates. I'm hoping it will be a slow steady rise because when rates have shot up suddenly in the past it has been disastrous for many overleveraged people as their property prices crash and their mortgage costs skyrocket.

If you doubt my words, check out what happened in 1982 when Vancouver homes lost between 40% and 50% of their value in less than a year. I don't think anybody wants to see a repeat of that. Of course the collapse in Tokyo was much, much worse. Tokyo homes lost 90% of their value and decades later are still far below peak prices.

Why so grumpy Geyser - We shall see how much interest rates rise, it they continue to rise, its a good sign as the economy will be continuing to improve and grow.  However there is no panic to raise rates since inflation remains low.  This last quarter point and the next one will be  bump out of emergency rates, can the economy sustain these increases and more after that.  I bet we get one more and than a wait and see approach.  
Japan has a big demographic problem which has caused so much of their issues with economic stagnation as well as a very closed society.  Canada is open and inclusive with immigration and multi-culturalism to help prop up our demographics...Likely without immigration we would be in for stagnation but that is not the case.
However, in reality a cooling off period would help to bring some sanity back to our markets.   

Oh, I forgot to add, I think interest rates have just started a long upward trend back to historically normal rates. I'm hoping it will be a slow steady rise because when rates have shot up suddenly in the past it has been disastrous for many overleveraged people as their property prices crash and their mortgage costs skyrocket.

If you doubt my words, check out what happened in 1982 when Vancouver homes lost between 40% and 50% of their value in less than a year. I don't think anybody wants to see a repeat of that. Of course the collapse in Tokyo was much, much worse. Tokyo homes lost 90% of their value and decades later are still far below peak prices.

Why so grumpy Geyser - We shall see how much interest rates rise, it they continue to rise, its a good sign as the economy will be continuing to improve and grow.  However there is no panic to raise rates since inflation remains low.  This last quarter point and the next one will be  bump out of emergency rates, can the economy sustain these increases and more after that.  I bet we get one more and than a wait and see approach.  
Japan has a big demographic problem which has caused so much of their issues with economic stagnation as well as a very closed society.  Canada is open and inclusive with immigration and multi-culturalism to help prop up our demographics...Likely without immigration we would be in for stagnation but that is not the case.
However, in reality a cooling off period would help to bring some sanity back to our markets.   

Not really being grumpy, just worried about a very real possibility which could hurt a lot of people.
You are right about Japan's demographic issues but if you research their massive home price collapse you will see that the undisputed primary cause was cheap loans and loose lending practices. Sound familiar?

Today a lot of people seem blissfully unaware of Vancouver's long history of property booms followed by spectacular crashes, followed by years of price stagnation. I obsess over the big price collapse in 1982 because the only thing that saved me from losing my house was my 5 year mortgage fixed at around 12%. Other less fortunate people were faced with renewals at over 20%. It was ugly and it's not easily forgotten.

Here are some earlier Vancouver price crashes, even more spectacular than 1982:

However, the prewar boom was not to last. Between 1913 and 1915, following the U.S. stock market collapse, and resultant worldwide depression, Vancouver’s real estate bubble burst for the first time; suddenly, commercial rents declined by 50%, and ordinary working people, no longer able to meet their obligations, defaulted on their loans. The city of South Vancouver went into receivership. The market was decimated. In fact, there is one recorded instance of a corner lot on Cambie and Broadway being listed for $90,000, and eventually selling for less than $8,000.


http://thedependent.ca/featured/land-de ... ICCDA.dpuf

And then there was this crash:

https://scamcouver.blog/2012/04/23/boombust-town/
1925 to 1929: Irrational Exuberance

The Roaring ‘20s sees a massive build out of downtown’s iconic structures: the Georgia Hotel, the Medical Dental Building, the (third) Hotel Vancouver, and the Marine Building. But you can’t eat bricks and stone: following the stock market crash and into the Great Depression property becomes virtually worthless. A 1935 east end lot can be had for $50, down from its $1,500 peak just a few years earlier.

So we have had our first rate increase and the markets are already starting to price in another one in October.  It is very possible that rates will increase 2% over the next 2 to 3 years.  I am sure everyone can afford that with no problem 

So we have had our first rate increase and the markets are already starting to price in another one in October.  It is very possible that rates will increase 2% over the next 2 to 3 years.  I am sure everyone can afford that with no problem 

Of course nobody saw this one coming, buyers were completely blind sided.
Surely interest rates are to stay low forever, it's not like Canada is at an all time high debt. Interest rates have cycled throughout history, this time it's different!

Food for thought.

Efficient-market hypothesis

The threat of rate hikes have been on the news for the past few years. I'm sure majority of people out there know that rates have been abnormally low. Also I'm quite positive anyone with a mortage would have already heard of a rate hike.

To summarize, I doubt these rate hikes will broadside anyone. There is enough time inbetween rate hikes for people to adjust. Cancel a gym membership, cut out Starbucks ect, etc. It wont be a situation where a frog sits in the cold water and as the fire is turned up the frog boils and dies. The only way I see a huge problem is a emergency rate hike that no one knows about for 3-4+%


Along this line of thought, the idea of Chinese foreign money and a looming housing bubble. I'm sure every single person who has purchased since 2008 have had this in the back of their mind.

The traditional meaning of a bubble is for people to believe that everything is ok. I think everyone knows it's not ok but yet they buy. The risk factor of a bubble has already been factored into the price of homes and people still buying.

If people know there is looming danger and still buy well then it's not really a bubble.

Sounds like a lot of wishful thinking.

A lot of people had to stretch just to get into this market. Grey market loans are through the roof. Those that could not afford the market 2 months ago can afford it less today and less tomorrow when rates go up....

I would hate to be stretched right now - that's all I know. Luckily I am prudent and can weather a 5% increase in rates. Most can't.

Sounds like a lot of wishful thinking.

A lot of people had to stretch just to get into this market. Grey market loans are through the roof. Those that could not afford the market 2 months ago can afford it less today and less tomorrow when rates go up....

I would hate to be stretched right now - that's all I know. Luckily I am prudent and can weather a 5% increase in rates. Most can't.

Well you kinda illustrated my point... if this last rate hike is the straw that is starting to break the camels back so to speak. If the mortage payments are creeping up and a looming rate hike is coming. The buyer would sell there property right now. It's still a good market so they would be above water and churn out a decent profit.

Thats why I think, those who are dying due to the interest rate hikes will and would have already exited. But I suppose the argument will be there will be a flood of people to saturate the market soon because of these "forced" sales. I suppose only time will tell.

Sounds like a lot of wishful thinking.

A lot of people had to stretch just to get into this market.  Grey market loans are through the roof.  Those that could not afford the market 2 months ago can afford it less today and less tomorrow when rates go up....

I would hate to be stretched right now - that's all I know.  Luckily I am prudent and can weather a 5% increase in rates.  Most can't.

Well you kinda illustrated my point... if this last rate hike is the straw that is starting to break the camels back so to speak. If the mortage payments are creeping up and a looming rate hike is coming. The buyer would sell there property right now. It's still a good market so they would be above water and churn out a decent profit.

Thats why I think, those who are dying due to the interest rate hikes will and would have already exited. But I suppose the argument will be there will be a flood of people to saturate the market soon because of these "forced" sales. I suppose only time will tell.

"the straw that breaks the camel's back".... not sure what you mean there.  Are you saying that the rise in interest rates will lead to a crash?  I doubt that.  All a rise in interest rates does is change the demand (less people will buy because less can afford) and supply (more people might sell as they cannot afford their new payments) but probably not enough to do anything other than slow price increases or maybe even lead to minor decreases.  
And don't underestimate the naivety of many home owners.  I doubt many say that "interest rates might be rising in six months which will stretch our budget, we should probably sell now" and I think more say "I heard that Alpine Credits ad on the radio - we should make our home equity work for us and go deeper into debt!".

Sounds like a lot of wishful thinking.

A lot of people had to stretch just to get into this market.  Grey market loans are through the roof.  Those that could not afford the market 2 months ago can afford it less today and less tomorrow when rates go up....

I would hate to be stretched right now - that's all I know.  Luckily I am prudent and can weather a 5% increase in rates.  Most can't.

Well you kinda illustrated my point... if this last rate hike is the straw that is starting to break the camels back so to speak. If the mortage payments are creeping up and a looming rate hike is coming. The buyer would sell there property right now. It's still a good market so they would be above water and churn out a decent profit.

Thats why I think, those who are dying due to the interest rate hikes will and would have already exited. But I suppose the argument will be there will be a flood of people to saturate the market soon because of these "forced" sales. I suppose only time will tell.

"the straw that breaks the camel's back".... not sure what you mean there.  Are you saying that the rise in interest rates will lead to a crash?  I doubt that.  All a rise in interest rates does is change the demand (less people will buy because less can afford) and supply (more people might sell as they cannot afford their new payments) but probably not enough to do anything other than slow price increases or maybe even lead to minor decreases.  
And don't underestimate the naivety of many home owners.  I doubt many say that "interest rates might be rising in six months which will stretch our budget, we should probably sell now" and I think more say "I heard that Alpine Credits ad on the radio - we should make our home equity work for us and go deeper into debt!".

This board is really lame now that TDMA is no longer here, I'm guessing he got banned???  
I doubt interest rates are going to rise more than 25-50 basis points from here.  Inflation is low, the CDN dollar will continue to rally (which will be a detractor to the CDN Feds moving much on rates) and ultimately Trump has yet to effect the US economy...my bet is the US is in for a hard landing in the next 2 yrs (assuming he survives for that long)   After that all bets are off.

BoC will be raising rates in Oct