Jeff, a super bearish view and rather contradictory. not sure where you’re getting your facts, but for such a scenario to play out and CDN RE to rise another 20% is hard to accept because Canadian’s are already stretched with the debt-to-income ratio around 170% (the highest it’s ever been). Plus for the CDN economy to contract so much in a such a short amount of time that yields will go negative may actually signal businesses to scale back production. That leads to unemployment, and then who’s got the money to purchase houses at even higher prices (take on even more debt)? You should take a look at the price history data from the Greater Real Estate Boards, there you’ll find that RE has not consistently doubled, contrary to your statement. The 80’s and the 90’s were years were RE growth was nominal at best and actually pulled back for a few years in the Vancouver area. To close, suggesting an ultra low yield environment in Canada would further appreciate RE prices in the next two years is not a sound view, in my opinion.

Hi Chad. Thanks but no I’m not a Realtor. I am suggesting the Canadian Economy will slow down caused by raising rates unnecessarily. This will happen over the next 1-2 years. Higher rates (3%-4% CDN Bond) Yields will cause a hard recession. Bond Yields will then go Negative (world Wide G7) to Stimulate Growth. Wealthy Pension Funds, Soverign Wealth Funds will buy Government Bonds as the least risky Asset to invest in with No Growth. Mortgage Rates will fall to .5%-1%. You will have to pay larger fees to hold your Capital on deposit with banks. Banks will not be as Profitable with interest rate spreads and make Profits on higher Fees. In Victoria and Vancouver there are charts out there somewhere that show the price of Residential Real Estate has consistently doubled every 10 years for the past 80 years. Cheers.

Jeff, are you a realtor? What are you basing your 20% appreciation on? And with a likely rate hike tomorrow (with the charter banks already hiking their rates a month or two before) how are you seeing that we will see ability to borrow less 1%?? At that rate, are you suggesting that the Canadian economy is going to slow down in the next 2-3 years, enough to get policy makers to slash our lending rates even further?

If you had a little extra room in your budget, and you can absorb the $200/month hike, good for you. I hope you do something constructive with that money right now. If you can’t, hopefully you sell and make a little profit before the debt reaper catches up to you.