The Bank of Canada is expected to raise interest rates again this week as forecasters say the economy has not softened enough for the central bank to back off.
Prices need to drop more than slightly to make buying a home feasable, and my partner and I combined make six figures. Rates have been incredibly low over the past decade and it’s led to wealthy speculators and companies buying everything up, and it’s completely unsustainable. This is correcting things to be closer to where they were historically when housing was affordable.
Yes I understand all of that. My point is that this “correction” isn’t actually going to make it more affordable for you. So far the market is holding quite steadily even as rates have doubled recently.
Unless you’re paying in cash, any price drop due to higher interest rates won’t make it easier for you because you’ll have to pay those higher borrowing rates.
Maybe as millions of regular people come up for renewal over the course of the next few years, and the higher rates force some to sell, you will somehow be able to snap up your dream home in cash, beating out the wealthy who have more than enough cash to compete with you.
Repeat after me: higher rates will not make it more affordable for you. The rich will still have more cash than you and will be far less affected by higher rates, and they will be buying up property in even higher proportions now. Because those of us who aren’t rich still need to borrow, and borrowing rates are much higher now.
I understand how the problem was created and I share your frustration but simply raising rates at this speed is not going to solve the issue of affordability .
Housing is unaffordable along with many other essentials because our governments refuse to adequately tax the rich, leaving them more than enough capital to seize markets and in fact giving them financial tools to avoid taxes which drive up prices.
Prices need to drop more than slightly to make buying a home feasable, and my partner and I combined make six figures. Rates have been incredibly low over the past decade and it’s led to wealthy speculators and companies buying everything up, and it’s completely unsustainable. This is correcting things to be closer to where they were historically when housing was affordable.
Yes I understand all of that. My point is that this “correction” isn’t actually going to make it more affordable for you. So far the market is holding quite steadily even as rates have doubled recently.
Unless you’re paying in cash, any price drop due to higher interest rates won’t make it easier for you because you’ll have to pay those higher borrowing rates.
Maybe as millions of regular people come up for renewal over the course of the next few years, and the higher rates force some to sell, you will somehow be able to snap up your dream home in cash, beating out the wealthy who have more than enough cash to compete with you.
Repeat after me: higher rates will not make it more affordable for you. The rich will still have more cash than you and will be far less affected by higher rates, and they will be buying up property in even higher proportions now. Because those of us who aren’t rich still need to borrow, and borrowing rates are much higher now.
I understand how the problem was created and I share your frustration but simply raising rates at this speed is not going to solve the issue of affordability .
Housing is unaffordable along with many other essentials because our governments refuse to adequately tax the rich, leaving them more than enough capital to seize markets and in fact giving them financial tools to avoid taxes which drive up prices.