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Victoria's housing market, home prices and values


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#4601 Nparker

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Posted 23 November 2022 - 09:12 AM

The current rise in interest rates is a direct result of Trudeau's actions too. Has he accomplished anything worthwhile since 2015?

*legalizing marijuana has been a bust, since I doubt it's generated any significant tax revenue



#4602 dkuitu

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Posted 23 November 2022 - 09:12 AM

New data released by the bank (of Canada) on Tuesday shows that half of all variable mortgage holders with fixed payments now owe more than those fixed payments.

https://www.cbc.ca/n...ittis-1.6660112


"We estimate that just about all variable rate mortgages taken about between May 2020 and July 2022 are now in this position," said economist Royce Mendes in a Desjardins research note Tuesday.

 

Those hybrid mortgages are like ticking time bombs in the situation we find ourselves in, and the rates aren't topped out yet.



#4603 Victoria Watcher

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Posted 23 November 2022 - 09:17 AM

It’ll all work out. Like it always has.

#4604 dasmo

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Posted 23 November 2022 - 09:20 AM

I’m enjoying living in my ticking time bomb. Even if it means I’m renting it from the bank for a bit.
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#4605 max.bravo

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Posted 23 November 2022 - 09:21 AM

I may have already told this story here, but... 

 

A couple months ago I decided to lock into a fixed rate. (Figured I'd done well enough over the last 10 years with a variable discount.)

 

When I called the bank to discuss options, it was clear the young gal working the mortgage desk had no idea where rates were headed.

 

I asked her to confirm the trigger rate where monthly payments wouldn't cover interest and monthly payments have to increase.

 

She assured me, "oh, you don't EVER have to worry about that happening" as if it wasn't even a remote possibility.  I guess that in her short career at the bank, it had never been a consideration. It was only when I strongly insisted she calculate and confirm it, that she hesitatingly said she'd call me back...

 

When she finally called back, it was like she couldn't believe what the calculator was telling her. I was already one or two BOC rate hikes away from hitting the trigger, and once she realized this, she sheepishly advised that maybe it's best to lock into a new 5 yr fixed rate now while rates below 5% are still available. 

 

She said she'd never seen this before... I said she'll be seeing it a lot more often in the near future.


Edited by max.bravo, 23 November 2022 - 09:30 AM.

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#4606 Mike K.

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Posted 23 November 2022 - 09:21 AM

Whatever it takes to keep people in their homes is what will be done.

Try building a new house right now. It’ll be $300k in just basic materials, nothing flashy. Double that for labour. Add another $450k for the cheapest L ot. House prices generally reflect what it costs to build one, so anyone expecting any sort of magic downward pressure on real-estate well below that cost might find themselves disappointed.
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#4607 dasmo

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Posted 23 November 2022 - 09:29 AM

I think they are rapidly pumping rates up so they can then bring them back down again. 


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#4608 max.bravo

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Posted 23 November 2022 - 09:33 AM

I think they are rapidly pumping rates up so they can then bring them back down again. 

My hope too. but if it doesn't to curb inflation quickly then they have to stay high for a while, no?



#4609 Victoria Watcher

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Posted 23 November 2022 - 09:35 AM

If low rates (the last 5 years or more) didn’t cause any inflation, how/why does high interest rates curb it now?

There are significant amounts of economists that say this raise isn’t a great or necessary idea.

Edited by Victoria Watcher, 23 November 2022 - 09:36 AM.


#4610 dasmo

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Posted 23 November 2022 - 09:38 AM

I may have already told this story here, but... 

 

A couple months ago I decided to lock into a fixed rate. (Figured I'd done well enough over the last 10 years with a variable discount.)

 

When I called the bank to discuss options, it was clear the young gal working the mortgage desk had no idea where rates were headed.

 

I asked her to confirm the trigger rate where monthly payments wouldn't cover interest and monthly payments have to increase.

 

She assured me, "oh, you don't EVER have to worry about that happening" as if it wasn't even a remote possibility.  I guess that in her short career at the bank, it had never been a consideration. It was only when I strongly insisted she calculate and confirm it, that she hesitatingly said she'd call me back...

 

When she finally called back, it was like she couldn't believe what the calculator was telling her. I was already one or two BOC rate hikes away from hitting the trigger, and once she realized this, she sheepishly advised that maybe it's best to lock into a new 5 yr fixed rate now while rates below 5% are still available. 

 

She said she'd never seen this before... I said she'll be seeing it a lot more often in the near future.

Did you do it? Did you lock in? 



#4611 dasmo

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Posted 23 November 2022 - 09:40 AM

My hope too. but if it doesn't to curb inflation quickly then they have to stay high for a while, no?

They are pumping up immigration at a rapid rate. This will bring down the true inflation. Wage inflation. They want to house all the newcomers because our GDP depends on construction and real-estate. 8% interest rates will not facilitate that. What goes up must come down. Typically at similar rates. Pun intended. 



#4612 max.bravo

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Posted 23 November 2022 - 09:42 AM

Did you do it? Did you lock in? 

yes. took a hit on an increased monthly payment, but also got a new 5 year term. the certainty is worth it to me.

 

a quirky side effect: from this position, every further rate increase (selfishly) makes me feel like I did the right thing. So maybe that's worth something psychologically, if not financially. Time will tell if it was the right move..



#4613 max.bravo

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Posted 23 November 2022 - 09:47 AM

They are pumping up immigration at a rapid rate. This will bring down the true inflation. Wage inflation. They want to house all the newcomers because our GDP depends on construction and real-estate. 8% interest rates will not facilitate that. What goes up must come down. Typically at similar rates. Pun intended. 

Is there an unlimited supply of immigrants? I have Ukrainian friends who tell me they advise their friends not to come to BC, if they come to Canada at all. My friends looked at several countries before deciding on Canada. It's possible we could degrade our international reputation and economy to the point where we become less attractive to immigrants, no? In a sense we compete for immigrants with USA, and there's chance we won't be competitive forever.



#4614 Victoria Watcher

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Posted 23 November 2022 - 09:49 AM

Don’t most attractive countries have a longer wait list than we do?

#4615 dasmo

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Posted 23 November 2022 - 09:53 AM

Is there an unlimited supply of immigrants? I have Ukrainian friends who tell me they advise their friends not to come to BC, if they come to Canada at all. My friends looked at several countries before deciding on Canada. It's possible we could degrade our international reputation and economy to the point where we become less attractive to immigrants, no? In a sense we compete for immigrants with USA, and there's chance we won't be competitive forever.

With UBI yes. 



#4616 dkuitu

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Posted 23 November 2022 - 10:12 AM

With UBI yes. 

 

That'll do wonders for inflation /s



#4617 davidN

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Posted 23 November 2022 - 10:27 AM

Is there an unlimited supply of immigrants? I have Ukrainian friends who tell me they advise their friends not to come to BC, if they come to Canada at all. My friends looked at several countries before deciding on Canada. It's possible we could degrade our international reputation and economy to the point where we become less attractive to immigrants, no? In a sense we compete for immigrants with USA, and there's chance we won't be competitive forever.

Would be interested to know why your Ukranian friends do not advise their friends to come to BC. Have they had a particularly bad experience here?



#4618 Victoria Watcher

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Posted 23 November 2022 - 10:49 AM

Today:


The average long-term U.S. mortgage rate edged lower for the second time in as many weeks, though it remains more than double what it was a year ago —- a significant hurdle for many would-be homebuyers.

Mortgage buyer Freddie Mac reported Wednesday that the average on the benchmark 30-year rate fell to 6.58% from 6.61% last week. A year ago the average rate was 3.1%.

The rate for a 15-year mortgage, popular with those refinancing their homes, fell to 5.90% from 5.98% last week. It was 2.42% one year ago.

#4619 max.bravo

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Posted 23 November 2022 - 10:50 AM

Would be interested to know why your Ukranian friends do not advise their friends to come to BC. Have they had a particularly bad experience here?

They said it's much harder to get ahead here than they expected. For all the reasons you'd expect. But perhaps not surprisingly, some of their friends are disregarding advice to go to other provinces and are coming here mainly because of good weather, despite cost of living / low salaries. 

 

It sounds like much the same story you hear from locals -- too expensive here, yet we wouldn't live anywhere else :)



#4620 dkuitu

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Posted 23 November 2022 - 11:16 AM

I saw this coming after the QE of 2020. I locked into a 5 year fixed at 1.81%. I had to argue with the guy at the bank. He insisted that I get a variable because the interest rate was 0.4% lower. I told him that I expect interest rates will have to rise in the future and I was expecting maybe 2%. He assured me that would never happen.



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