@Supraboy:

"I don’t think"

Exactly.

There are so many bears here, it goes to show you that the RE market will continue to rise. Until there's a flood of bulls on bullboards and a swarm of buyers lining up for condos, I don't think we're even close to topping out on RE in Vancouver.

@Chilled:

Yeah but, yeah but, Chilled, don't diss this guy(?)cos he deserves respect man, now that he's an "owner". You are clearly just a bitter renter. It 5 years he will own 15 properties and be the talk of all the cool cocktail parties.

@91 Thanks for the video. LOL a masserati show – are those cars 50% too!

I was at Daiso $2 shop to buy toilet brushes and brooms all @$2-$3 each. And I overhead a conversation. A guy just bought a house with a mortgage and was checking with his friends if the bank would lend him another $6K for CHMC insurance.

@flip_this: Hi flip_this: that's a very good question. In normal times mortgage rates are set equal to the interest on long-term (usually 10 to 30 years) bonds, plus a premium which compensates for transaction costs and other middle-man costs. Notice: the premium usually goes up as your risk-category goes up. So, in normal times, if you have low down-payment your premium goes up. However we are not in normal times: CMHC is allowing high-risk people (with very little downpayment) to have access to really low premiums. This means that these guys get mortgage rates close to the 10-to-30 years bonds rates, which are still rock bottom (although slowly rising). CMHC is basically interefering with the market for pricing risk: it buys all the extra risk associated to these guys, so that they have access to the same low rates as… Read more »

@domus:

I think you are making very good points, and to me the inflation seems to be the most probable outcome. Can you please clarify for me one thing: you state that "when the inflation hits hard, interest rates jump up." I can see that interest rates will rise on debt securities traded in a free market such as commercial credit market (bank credit, corporate bonds, etc.). From what I can see, the Canadian mortgage market is not really a free market, it is manipulated by the CMHC, BoC and the Canadian government. What in your opinion can force them to raise the mortgage rates?

Here is an easy equation. Mortgaged to the hilt raise in the interest rate = Foreclosure . It doesn’t get much simpler than that.

When it comes to bulls(the beast of burden) they are not a particularly smart animal but when led to slaughter they begin to smell the blood and begin to panic. Wait til they smell a little blood in the street when their neighbours or friends can't refinance. That's when we'll see who's swimming naked.

@Vancouverite:

YEAH!!!! Boowha,Another Bull join our battle against those stupid bear

,and soon this forum will be ours.

@flip_this: Excellent point. When talking about inflation/deflation, I am in the inflation camp for these reasons: 1) inflation is, and always will be, a monetary phenomenon: to say it with Milton Friedman, if you print/issue enough monetary instruments, you get inflation down the line. No buts, nois; 2) FED/BoC know this full well: they argue that, when the time comes, they will be willing and able to withdraw excess liquidity from the system. The two operating words are “WILLING” and “ABLE”. Let’s assume they were willing: how do you go about withdrawing liquidity at a really fast pace? Ask the FED/BoC to sell off all the government-derived debt they purchased over the past few years? In a matter of a few months? I believe it is not possible: it would take a few years, not a few months, to do… Read more »

pricedoutfornow: Why do you think mortgage rates in Canada will go higher? It seems to me that if Bank of Canada wants the mortgage rates to stay low they can certainly keep them low by buying mortgages from the banks. This is what they've been doing for the last several years. From the BoC actions it is evident that they are more then willing to create enough money to keep the bubble inflated. It appears that they want inflation. The low mortgage rates is nothing more then a subsidy for the homeowners (the banks, of course, profit the most), so what can make the government stop this subsidy? There is a common feature of all entitlements: once started they are very hard (politically) to get rid off. This particular entitlement affects about 70% of Canadian population, so I don't see… Read more »