Mortgage rate relief could be on the horizon for Canadians: economists
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- Опубликовано: 17 ноя 2023
- Soaring numbers since the end of the COVID-19 pandemic have left Canadians either struggling to pay their mortgages, or simply unable to enter the housing market.
Over in Vancouver on Saturday, Global’s Heather Yourex-West speaks with economists about a potential mortgage rate decrease in the near future, after a what some are calling a “peak” in interest rates.
Though they likely won’t fall as low as they did during the pandemic, relief is supposedly on the horizon.
For more info, please go to globalnews.ca/news/10066528/h...
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🤦🏻 This is the path to my dying on the streets: helping already-owners and realtors to raise prices even more.
Whom do you fool?
Slightly higher interest rates make big difference in payments. I have looked for myself, and the difference between 4% and 6% is huge
@@jb-vz4wb You are still paying through the nose by means of high taxes
@@jb-vz4wb2% extra interest on a 500k principle is 10k a year on interest alone, then you need to factor in taxes at 25-30%. You need to be making 12.5k more to cover the interest portion alone. This is without factoring in inflation and other spending needs.
Funny people with multiple homes for rent complaining about having to sell
1st world problems
I bought my first home in October with a 5.85% mortgage rate. I have no sympathy for people who have a higher income than me who didn’t prepare for non-record-low interest rates.
Even a single “average” Vancouver or Toronto home purchased at $1.2M last year would require a household income close to 200k to qualify. I am fortunate to now be earning about 60k annually, almost the national median gross income (68.4K 2023). I can’t find it in me to pity people earning substantially more than me. A couple each making 6 figures? Boo-hoo. /S
I have a housemate/tenant enabling me to afford a home 1/3 that price comfortably.
Additional property taxes on high value homes, >1 million CAD, is a good first step. Additional taxes on non-apartment rentals where profit is over 1% is something I might support also. Ex. If an $800,000 condo is rented out for $3k per month and, after fees, taxes, and mortgage interest (exclude principle payments), the owner is left with $8000 in annual profit. Tax this normally as marginal income. If the rent in that same condo is increased to $4k per month and costs go up $200/month this would result in in $800 more profit per month for a total of $17,600 for the year. I’d be fine with say a 25% “housing affordability fund fee” on the amount over 1% of property value. $2,400 towards building more affordable housing.
I think some exceptions for REITs and other commercial apartment buildings from the “higher tax on income above 1% ROE” are reasonable as we shouldn’t discourage construction of non-luxury apartments.
Does this seem reasonable?
Everyone has gotta stop buying during inflated prices , once they know people will pay double they won’t ever drop the prices
At the dealership today the young polish couple with a new baby waiting for salesman to come back from managers office were sitting beside me. When the salesman came out, he said to them.. ok , I can do 695.00 biweekly. She said to her young husband
Too much. They were at a used dealership privately owned. I almost asked them if they were buying a school bus or an airplane for 695.00 biweekly. I almost offered to sell them my used car when the dealer said he would give me 2k for a trade in on my car when black book trade in value is 4500.00. Dirty business everywhere. You right. Everyone must stop buying..especially expensive groceries. Dig out all the church pantries, dosent matter what religion as all religions and church pantries are helping everyone. Freakin loblaws dude made like 2 million in payroll profit last year for himself. Now he stepped aside to a sideways position after he was brought in for questioning from parliament. Omg I could go on. But you right. Stop buying. Let them keep all their rotten inventory for themselves. All near expired food that is overpriced goes to food banks and church pantries because no one can afford 6.99 for a loaf of bread or 3.99 for 2 lousy bagels. They get donated and the poor who know this eat better than those who are lucky to have jobs( if they paid right)
“They” don’t set prices…..the buyers do! That’s why they go up…..buyers bid it up through the supply chain.
but people do want to pay double to live here. you're not the target demographic anymore.
Free money and idiots talked up the prices.
the thing about that is, ppl need housing....its not a want for most but a NEED, and renting is just insane now
Thanks to Trudeau!!
Trudeau has to go.
Maybe, maybe not. This has nothing to do with him though.
Stop giving people false hope
Houses are for living not for investments 😒
Said the poor socialist.
Can't have prices going down. Next thing ya know working people will be owning them.
People need to understand the basics of economics. There are a myriad of reasons for high prices but the main culprit is the devaluation of the dollar. Things aren't getting more expensive, the dollar is worth less. This is the result of cheap credit and printing more money whilst being in debt, they are killing our dollar. people like the women who sold her house in Calgary and many others used this cheap credit to buy up the market artificially raising prices on everything. $100.000 dollar pickup trucks anyone. The real problem is that it hurts the average John and Jane doe who haven't seen a corresponding rise in wages compared to inflation further putting everything into the hands of the few.
Nope the main driver was and always has been lower and lower rates. Inflation doesn’t account for a doubling of house prices in a year and a half. It was overnight rate of .25%. With mortgage rates around 1% that allowed all these bozos to bid prices to the moon.
Maybe you need to learn more economics. Housing is largely a resell market, entirely priced in domestic currency, and therefore largely shielded from forex related issues. You need only look at the complete lack of correlation between housing prices and exchange rates to see that.
It's not nothing, but it's of relatively minor importance.
Economics 101.
Infinite economic growth with finite resources.
Now that all the baby boomers have retired, we can now call it "aging population".
This doom and gloom scenario was once applied to Japan 20 years ago, predicting their economic collapse.
Japan number 3 economy in the world. Still.
Oh but we must replace an aging population by replacing retired workers.
But we do more than that.
We double and triple populations in cities using the same excuse.
Replacing retired populations is a false narrative.
carbon tax and every dollar castro gives away is why interest rates are going up. money gets printed...money value goes down. Buy power is gone.
Not even a bit.
got a feeling you don't actually know how the carbon tax works
@@klnrklnr4433 no one does...trudeau collects and send it away to help kill. Yes save the plant to save peoples future but help buy more weapons to kill.
What about the low CAD? This hurts us more than high interest. When are investors going to come back to Canada?
They will start to come back after Trudeau The Economy Killer is voted out.
When blackface sock puppet is voted out.
When they have a reason. U know this country freezes bank accounts... Right?
Investors are the reason why housing costs are too high. Well one of them anyway.
Low cad means more foreign money coming in and is good for the economy. Interest rates actually hurt us
If cities could actually lower the price for permits. Maybe we could put out more house and it would not only be the big companies. Why is it so unacceptable to own a tiny house? Cities and provinces need to find solutions.
What I absolutely don’t think that should happen… is that people be taxed to save people who bought houses at the wrong price. Or worse people who own 3-4 houses. Yes, just like everything houses should increase with time. Following the salary and inflation rate (not investment)
What is happening here in Canada is that we are not building enough houses for everyone coming in. Sadly, I know too many people
Skipping meal and working 2-3 jobs. you shouldn’t be spending 80% of your salary for a place to stay.
We need higher mortgage rates. Not lower. Only way to reduce housing prices
Speaking like someone who isn't in the housing market.
House price would drop but payment will go up.
How does a higher rate make owning a house more affordable?? Prices wont drop lower then what the higher rates are costing you
@@tylerh8275i think these people are professional, paid trolls. I mean that seripusly
@@tylerh8275 It stops speculators from bidding up prices. Why do you think Vancouver introduced an empty home tax a few years ago.
I can't stand real estate agents
They truly are the biggest scammers out there
low interest + cheap loonie = pouring gasoline on fire.
Guess who will eventually pay the price? It's us, the vast majority of Canadian and the upcoming generations. Canada cannot move forward with such heavy debt and high basic living cost.
I am paying more then triple times interest, and can not sell it because it will hurt me more then now.
Great! My taxes are going to help homeowners. I wish I had a house. Who's going to help me?
Do you think home owners dont pay taxes themselves ?
This is a Socialists and communist fundamental. What do you expect. Wait for the dental and pharma programs to kick in. You will have zero disposable income.
Did you vote for Trudeau? If so you reap what you sow.
Homeowners pay ridiculous amount of property tax every year. We all pay taxes. Stop whining. You want help? Go to the church
@@ThangPham-xv9by I had a house for 36 years. It makes no sense to buy one now. Enjoy your enormous taxes, by saying nothing and doing nothing.
1 mil for a condo is a deal. People lost touch with reality
Hey I got my popcorn and beer, watching all those FOMO who contributed to these messed up prices sweat
1.4 mill? It’s not worth it! Why does Vancouver think a drug filled garbage dump is worth that much?
Who is buying any houses at this time? These prices are insane, four times more expensive than the US home. It makes no sense.
Reducing rates won't do any good. It will have the opposite effect of what we want.
Robert thinks he’s got a crystal ball. More like a ball head
Blah blah blah..just like used car sales. Ridiculous. Selling a 2010 hyundai accent hatch for 6400.00 with no ac when ypu could buy the car new in 2010 for 9999.00 plus freight and tax. Capitalist greed just like grocers, loblaws. Dealerships making huge interest off new immigrants with no credit who need cars. Shame on the entire world.
YUP - the government will make it easier to renew or get mortgages by people who cannot afford them in the first place. Only going to create a bigger problem down the road!
Her profession is a property owner? Useless human being
The high interest rates are excellent for mutual funds and term deposits. Not everyone is complaining.
Realtors are so useful and important to society.
Lol, excellent joke 😂
😅
Joke heh, my father was a realtor and he said to me some 55 years ago that there are 2 professions that you cannot trust, realtors and lawyers
😂
🤣😂😁😄😁😁😁😁😅😅
With Government spending, you actually think interest rates will go down. Good luck.
What about the people who can’t even buy a home. So the people who already have enough get a boost. This is a gift to the business people that own all the property
Middle class are always screwed around with
I thought they were trying to solve the housing crisis. How so when you’re putting more folks out of the market? Duh
Why would they do anything? If you can't afford a home don't buy one.
As long as we have high inflation (hopefully the government will give up a true inflation rate) the interest rate will rise or at least stay constant for the foreseeable future.
Stop building suburbias!
Housing prices and rents cannot come down without a surplus. Tens of thousands of units are constructed each year. More than a million are required. A variety of spurious pretexts are employed in order to deceptively justify placing a halt on the further use of land, deliberately keeping housing in short supply. Rising interest rates that force those that cannot meet mortgage payments to sell merely changes ownership further consolidating supply.
Those that come out in protest are the unwitting victims of a _con job_ that falsely believing will secure their future ensures their demise. Canada has 895,000,000 acres of forest that is a fraction of its total territory. None may be spared for housing.
Halting outward expansion does not save farmland, as it escalates in price to the million dollar per acre level, is unfeasible for growing crops, farm houses are replaced with mansions, the land becomes fallow and returns to nature.
Fifteen square miles allocated to housing that in a relative sense is the equivalent of a molecule in a football field would eliminate the shortfall and bring housing prices back to a normal level. Citizens of a democracy will not allow that to happen.
A home used to be a place to live in and traded in a free market like that for cars (until it was turned into a financial instrument in a monopoly) and persons at each income level could afford to buy one as homeowners whose income increased moved upwards to more expensive homes leaving their old homes to be acquired by new entrants. (You can purchase a three-bedroom home in Detroit for $15,000).
Before persons are admitted to public office, whether elected or employed at any level, they should be placed under oath and required to swear to the truth of their response to these questions: _Is your ulterior motive in becoming a public servant to place a halt on the use of the land resource? That was not promised to Canadians? That will cause home prices to skyrocket and shunt the lifetime earnings of citizens exacted through rent directly into the pockets of the chosen few? Unjustly enriching them and leaving residents impoverished and homeless?_
The surplus is all the investors that loaded up when rates were near zero. Math doesn’t math on rental properties at 6% interest. Most of them are cash flow negative and will be dumping properties over the coming years. One corporation announced they are selling off 30% of there there single family homes in the next year. The main driver of insane prices was and always will be rates. The supply of people able to get approved at 7-8% with stress test is small at current prices.
@@jamesj2212 In 1969 I earned $7284 per annum that increased to $9180 eighteen months later. A home in Point Grey was on the market for $29,000. An offer of $27,500 was finally accepted. An equivalent home in Winnipeg cost $11,000. Vancouver was an expensive city. Prior to 1972 it was difficult to sell a home and might take two or more years. Then legislation that placed a stop to the use of land turned home ownership into a financial instrument and created a virtually monopoly market with monopoly prices.
(Average sales price of houses in Vancouver in 1969: $23,939.)*
$27,500/$7284 = 3.8. In 1969 a home cost the equivalent of 3.8 years earnings.
Today that home is worth $5,000,000 while an equivalent salary is about $60,000.
Wage rise due to inflation: $60,000/$7284 = 8.2 times.
Cost of home now in terms of equivalent earnings: $5,000,000/$60,000 = 83.3 times or the equivalent of 83.3 years earnings.
A price comparison yields: $5,000,000/$27,500 = 181.8 times its former cost.
The home should cost $60,000 x 3.8 = $228,000.
With both earnings and inflation taken into consideration $5,000,000/$228,000 = 21.9 times its normal value.
The market for homes used to be a free market like that for cars and persons at each income level could afford to buy one as homeowners whose income increased moved on to newer, more expensive homes leaving their old homes to be purchased by new entrants. (You can purchase a three-bedroom home in Detroit for $15,000).
Home prices may be verified from actual transactions for those years at the public library. My example is for Point Grey. A home in East Vancouver cost about $12,000 or less at that time.
I want to see the interest rates go through the roof.
I would like to see them maintained. I hope that prime rates for Canada are 4-6% for the next 10 years.
Same here...people have had it too good for too long.@@dougpatterson7494
Good morning, folks. Have a nice weekend.
No no no stop enabling the screw ups to keep screwing up its time to buckle down and pump those interest rates sky high! No pain no gain baby!
Hmm who was the PM last time this happened?
Build affordable, not for sale housing. People should not be buying second properties and renting them out.
Because the media says it. Its not true. You really think rates are coming down in 2024? Unlikely. Just paid off a variable and crushing a 1.6 fixed. Taking 15 years of amortization down to 3 yrs.
The prices are going to rise again in Spring, just like last Spring. Does nobody follow the trends at all??
Prices will be determined by the rates. If rates stay higher prices will crater further in the spring. Because a ton of people are pulling listings to wait until spring. When all those people flood the market with listings at same time, there will be a glut of inventory and prices will tank once they realize there competing with thousands of other sellers and capitulation finally sets in.
jamesj nailed it. Plus the 7.5% stress test puts so many people out of range
@@jamesj2212 they wont tho, maybe in Alberta but nowhere else
@@BuccaneersBliss only ppl priced out are first time buyers working crap jobs
@@tylerh8275lol, the average price of single family home in GTA is close to a million dollars. Let’s say you even have 20% down of $200k. To get approved for $800k mortgage at current interest rates with stress test, you would need income of over $200k, with absolutely no other debts. The average income in Ontario is around 65k. The math doesn’t math.
So we're adding billions to intrest payments. Where do these billions go. Profits for the banks?
Let it crash. That's the only actual solution. Yeah it will hurt but we got no other choice. If housing/rent doesn't drop ppl won't have disposable income and we will go into recessjon anyways
I own many homes at this point. I hate being so rich.
Saying it could be is not good enough you are not sure you are just speculating .
Trudeau needs to step down so Pierre Poilievre can take over.
Pierre has his housing paid for by US the taxpayer, he won't change the system
What is PP grand plan beside axe a small carbon tax?
@@joeisawesome540 watch his speeches and learn.
@@joeisawesome540you haven’t been listening. Smaller government. You need to learn the fundaments of conservative governments vs Socialism and communism.
@@speciallevo3170 Smaller government such as what? what is going to be cut? police? Healthcare? what else?
Gotta take taxpayer money from renters and give them to home owners. That's Trudeau's plan.
That's the banks motivation, higher interest rates only make bankers richer in dividend payments
Criminals in action.
Soon will see what happens when home owners start loosing their 5-20% down
Interest rates are no question a factor. Home prices also play a role. More homes need to be built. How that is going to happen any time soon is anyone's guess. What if there is a change of government? Will that change the course of the housing crisis? Yes, that's right, I said housing crisis.
Copy Singapore the govt invested on new houses to compete with private. It did pull the prices down
Why did you not lock it in when it was 1.5%? Drop 0.5 and increase 1.
Next time they come down selling to a rich foreigner and moving
so I got 2 years to get out the bank
Sure
1.4 mil deal. Lol
People that have rental properties are thinking about selling them and cashing out not worth such huge monthly mortgage every month it’s better just to put that money into index funds and the S&P 500 rather then looking after a rental property and dealing with tenants less hazel. It was worth it when I bought my rental properties apartment building in 2013 not anymore Thinking about off loading my rental properties and selling them slowly one by one the high interest rates are killing me . I will make more if I just dump all that money in theS&P 500
this would be great
Realtors using housing as investment. Whod of thought. If the Government bails out all the idiots who over spent your just screwing everyone else over. Let the ones who over leveraged suffer, its their own fault.
It wont cut for next 1year and then it start coming down to 4, so overall it will take 2 years to come to 4.
it WON"T come back down for at least another 2 to 4 years.
Yeah right
borrowing money SHOULD cost you extra money, period. I'm tired of people whining about current interest rates thinking the current rates are remotely high. Go and look back at interest rates history in this country. My parents were paying 13-14% interest rate on their mortgage back in the 80's. As a saver, I would LOVE to see interest rates that high. I could actually earn some good money back on investments. I know full well about living below your means, and budgeting responsibly. I make minimum wage, I'm living just fine.
Or it could go higher
Pretty girl turned realtor who would have thought
No relief is coming unless markets crash down for more than 30%. There is no cheap money available in North America. So whoever gets out of the markets quickly will win.
1:50 talking like 3.5 - 4 percent is high???? Lol. Clowns that's low
Get the goverment out of the way and BUILD MORE HOUSES. Let competition into Canada so prices lower. QUALITY OF LIFE WILL VASTLY IMPROVE.
my rate precovid was 3.4 percent .....
Remember folks, rates don’t go down unless jobs are lost. Be careful what you wish for. High rates are meant to break the economy when it gets too hot. Have a wonderful Sunday.
BoC bout to dial kids with a made up game
Rent forever, you will own nothing. Houses back up to 2 million next
66% of people own a house, Maybe you need to try harder.
@@mikeforcerer8537 yet the majority of people under 35 feel they will never own one. Are you Trudeau or trolling us?
most people i know have owned property since they were 25. and are now 35. I guess it depends if you hang around adult
children or not.@@ericb7937
I just bought a house for double the asking price and I'm willing to cut you a similar deal
we need to stop subsidizing people's investments at the expense of others, and Canada as a whole needs to actually become productive and not rely on real estate as the main economic driver. Cut out airbnb, rein in speculative retail investments that do nothing to increase availability or affordability, and build build build--steamroll NIMBYs without any expense. Everyone is progressive and for the people until it means their property values may take a hit. Why? Because "my home(s) is my only source of value in this unproductive economy and home ownership and affordable rent are not rights but an investments"
you think house prices are crazy now?
watch what happens the second they lower rates.
to the moon.
Thank you Justin !! Your doing great 🎉😂😂
you're
People should not have bought beyond their means or others should not have bought 2 or 3 homes
I didn't purchase beyond my means. I purchased well within my income, but horrific interest rates is making it nearly impossible to keep up. Many people did buy a home within their means. By the way, I only have one home.
Move to prince george
hii kangshifu
If Canadian home owners are to be saved, interest rates must be lowered immediately and dramatically. God bless Canada.
💯💯💯👍👍👍👍👍💯💯💯💯💯👍👍👍👍
pfft, that would be a disaster.
unless of course you love high inflation.
majority of home owners don't even have mortgages
House price may soon be surging again once the interest rate drops. 😅
LOL
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