RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Bank of CanadaWell said Flamingo.
My sentiments exactly. One can't explain it simpler than that. This recession is going to be the shake down for everyone that overpayed. We haven't even started it yet. It (rate increases) only started in March/22. Cheers
flamingogold wrote: My dad was buying commercial real estate in the 70's and 80's with interest rates close to 20%. Properties were cheap compared to annual household income, roughly 3x which is the traditional average. Up to the peak this year, real estate values were up to 15x annual household income.
Surviving real estate corrections depends on which side of the interest rate battle one is one. It is easier to buy real assets at lower prices and higher borrowing rates. Because of the inverse relationship between prices and rates, eventually, your carrying costs fall and capital value rises.
The same is not true when buying during a period of low rates and high prices. As rates climb, the carrying cost increases and your equity drops. A double negative whammy. A lot of people are going to feel major pain in the years ahead.
bicente wrote: Montreal residents are receiving their property assessments as of today and some of them have seen their property double in value since last assessment . The city says they will not raise taxes because they will lower the taxation rate but we all know what comes next ... costs for owning property will keep going higher and it's nothing new , my dad paid 23% in interest rate and survived , we will survive too ... unless .. you are over-leveraged just like the rest of the gamblers out there ... I call it transfer of wealth from the greedy to the smart ... the skies are blue ... ;) ... GLTA
Shamhorish wrote: IMO, there is no such thing as free money
many reasons contributed to lowering interest rate, most of it was declared to mr and mdam every one
one of the the hiddin ones was to raise real estate value extimated by the cities, by encouraging people to buy properties, and reals estate was on fire, prices doubeled or trippelled in some case and that is what they wanted so they can do new city evaluation and raise city estimates, thus collecting much much more of property taxes, scholl taxes etc
so, what they gave mr X in one year or so, is nothing compared to what they will get back just from life long property tax increase
think about it