You’d be surprised how many people think this isn’t how monetary policy works. Some clown economist is now using entirely fictional numbers “the estimate of households that would have been made!”

Now that there’s no demand, what about the imaginary demand‽

However, if a central bank were to slash interest rates to deeply negative territory in real terms and promise to keep them “low for long” with a goal of boosting asset prices… this would cause a rapid and ubiquitous increase in demand of people fighting to borrow money at negative rates to get a piece of that stimulus asset growth. And this is what happened… investors rushed the market and anyone remotely thinking of buying a home that understood what was happening did too, which caused FOMO and turbo charged demand further

Makes a lot more sense than every town in an entire country having a supply shortage hit at the exact same time, no?

Pretty tough to sell little 2 bedroom condos at >$1M to households earning 85k, regardless of mom and dad remortgaging their house. And as an investment, unless you’re making a bunch on the market increase or need to launder the cash, it’s an absolute trash proposition.

To my mind, BoC will have to quickly drop interest rates to avoid a full-on meltdown in Canada’s two biggest markets, if not, a 30% drop from the peak will have looked highly optimistic in retrospect. DOM is much worse than official stats suggest.

they have clearly never heard of say what you do and do what you say