RE:RE:RE:RE:Re: Never Say NeverDogsbreakfast4U wrote: Anschutz wrote: Banks will do well regardless. They have been positioning themselves to take advantage of millenials and younger generations who bought ridiculously priced homes at low rates. They are about to experience what many of us older types experienced in the 70s and 80s. Screaming high inflation and interest rates. The pain and despair will be monumental as banks wring every spare cent from them as they try to service their loan or give up and walk away leaving the keys to the property on bankers desk. Like phoenixes from the fire younger generations of fiscal conservatives are about to be reborn.
Rinse and repeat... rinse and repeat.
Burgersandfries wrote: Even at current prices most Canadian o and g firms will be debt free in the next year or so. Banks will be praying to get their business back at the higher rates but their just may not be much business..Birchcliff as an example owed 770 million July 2021 now owes 490 million let's see where that number is this July then December. Billions of debt will be off the books soon not great for banks! Jmo
Bought a house in 1994. I was told buy the real estate agent that I was making a sound investment because I bought in a great new neighborhood blah, blah blah. Had to sell the house house 4 years later to take a new job outside the province only to realize there were no buyers and only a few really low ballers. Kept the house and rented it. Sold a few years later at a small profit. What happened in 1994 and 1995 is the central bank raising interest rates aggressively like what we are seeing now. In Canada(unlike the US in 2008-200) we have not seen a significant housing price decline in nearly 30 years. As a result most people think houses always go up in price. There are in for a rude awakening if the Fed continues to hike interest rates. This time it will be even worse because of the insane increase in home prices we have seen in th lats 2-3 years.
Well I certainly hope so.
I have been waiting for real estate to crash for way too many years. Most people I talk too, who own more than one house, think RE wiil not crash. It may or may not depending on how high interest rates end up going. IF we end up with super high, out of control inflation, expect a good 50% haircut on the cost of homes.
This could be a repeat of what happenned under PET since the head cockroach is his son (at least on paper).
Personally, I already own a home and have been mortgage free for a decade so it makes no difference to me if my house is worth +$1M or it goes back to what I paid for it @$350K 18 years ago.
What always concerned me was the desparate people who blindly think houses will always go up without thinking about the rainy days. I'm guessing that about 30% of the population who own a home are probably borrowed to the teeth on variable mortgages. Hence when rates go up they will be forced to lock and pay a few hundred $ more per month if they can afford it or when jobs start to tighten and they will, then they could lose their employment, thus mailing in the keys....
We did see this in the US and we could see this happening here soon.
No offence to anyone in this position.
Cheers!