Borrowing costs going up soon

The Bank of Canada has announced that they are keeping the overnight rate at the record low of .25% for now but sent a strong message that rates will be going up sooner rather than later. Expectations that the Bank will raise rates on June 1st have sent the Loony up even higher, surpassing the US dollar.

The dollar jumped 1.58 cents to $1.0012 (U.S.) as investors bet interest rate increases in Canada will outpace those in the United States, where the Federal Reserve shows no signs of boosting rates any time soon.

With the timeline for a rate hike nearly set in stone, investors and economists are turning their attention to how fast rates will move.

Policy makers will end this year with a lending rate of 1.5 per cent, many economists believe, moving to between 2.5 and 3.5 per cent by the end of next year.

The level that most economists consider “neutral” is 4.5 per cent.

If you’ve got a variable rate mortgage now might be a good time to lock in.  If you’re over-extended now might be a good time to sell.  I suspect “neutral” rates won’t have a neutral effect on Vancouver house prices at this level.

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Jenny The Troll
Jenny The Troll
10 years ago

Alexcanuck ,Purp, Ultraman, Híppos Purrós, McLovin, vomitingdog, Casanova, Newcomer,

I realize the anonymity, but still how do you face yourselves.

How can you legitimize the garbage this pumping Re peddler spews?

How can you not find arguing with Rob, not demeaning to your logic, honesty?

WTF is wrong with you?

The Accountant
The Accountant
10 years ago

The important thing to remember about rising interest rates is that it does not only affect the cost of debt. The overall cost of capital is increasing too…Yes, even the cost of equity.

Literally about 80% of people on the street do not realize that equity has a cost too.

Best place on meth
Best place on meth
10 years ago

@VanRod:

We only do predictions here.

Speculation we leave to the dipshits buying real estate.

Wanderlei
Wanderlei
10 years ago

Today's listings minus sales is actually 152 for the day according to paulb. However, total tally today from yesterday only increased by 83. Does this mean there are many expired listings?

VanRod
VanRod
10 years ago

@me: "pretty soon, 100 sales will be an anomoly (by fall)"

pure speculation. You could say the same thing about listings and have the same credibility.

M-
10 years ago

@Vansanity_: They were processed today, and the sales occurred some maybe today, some maybe a few days ago, some maybe a week ago.

paulb fan
paulb fan
10 years ago

@paulb fan: oops I goofed. Sorry, I dint read the full quote properly. My bad.

Nero
Nero
10 years ago

@Peepers:

Peepers, to some extent I agree with you. Having a family, a dog and the freedom that ownership brings is very important, and we all want to be there (well at least I do).

That said, Wifey and I have saved up the downpayment, but it's just too stupid to jump in now (or the last 4 years IMO).

I told her I'd rather rent for $2000 than pay that much on a mortgage for the next year at least, since we'd be screwing ourselves.

paulb fan
paulb fan
10 years ago

@me:

we added 48 net listings since inventory’s 8:31pm update

Its 83 as the final listings tally is 16388, up from 16305.

Vansanity_
Vansanity_
10 years ago

Hey Paul,

Good to see you back. Are these sales for today? Or are they processed today and were finalized some time pre-today? Or is there no way of knowing?

I knew we went over this in 2008, but I don't remember what you said about it.

Cheers!

me
me
10 years ago

we added 48 net listings since inventory's 8:31pm update

not bad

not a 500 listing day though

wonder if sales are petering out, slowly…..

paulb, betcha we have a 500+ day yet this month, and won't see a stronger sales day than today for a while.

pretty soon, 100 sales will be an anomoly (by fall)

holy shit, this is real

real good that is

Sour Grapes
Sour Grapes
10 years ago

@paulb: So who the hell is BUYING today?

Absinthe
Absinthe
10 years ago

@Peepers: I agree on the pet issue – we've definitely put off having a dog until we can buy. Or until the rental churn calms down a bit. I also know it has been a more limited and unstable market on the lower end during this boom, in part due to flipping, construction, boomboxes, and gentrification of traditionally cheaper neighbourhoods or buildings, and so I'm pretty clear that not every price range or community has experienced the boom in the same way. So I do hear you that there's been a boom-time cost to renting that's not necessarily reflected in the average rental prices: that it's been a more vicious rental market, in some ways. Although I must say I'm not sure how getting in the market would be better or even doable, because equivalent rent to mortgage gives you… Read more »

jesse
10 years ago

@Peepers: "So then the whole theory of renting being better is flawed."

It's no flaw. It's your personal preference. These days, based on the number of rental listings, landlords can't be as picky. The current game of reverse musical chairs ensures someone gets the dope fiend with the mutt.

Having a dog is more risk from the landlord's POV so IMO you should be prepared to pay more for rent.

paulb
10 years ago

That's about it.

New Listings 481

Price Changes 157

Sold Listings 329

16,388 all in all, solid day. 2 days in a row with 480+ listings.

painted turtle
painted turtle
10 years ago

Kids are not such a big problem when renting, as long as they don't behave hyper active on a first floor, i.e. they have some manners.

As for a small pet, I know many people who have a clandestine pet…

Dogs are a real issue though (and I speak as a tenant AND as a landlord).

Overall, having 2 kids and a cat did not have any weight on our decision to rent, and renting (not ranting…) forever is not a problem: we could then adapt the size of our home(s) to the growing, then shrinking, needs of our family.

Peepers
Peepers
10 years ago

Yes, rents are coming down, but it has been tough, VERY tough for people to find places to live in Vancouver. Sensible friends of mine bought because it was cheaper than renting (long term, not a good idea). I agree with so much of the posts on here, but I feel like on this issue, there are so many people out of touch. Just because something is listed on craigslist doesn't make it real. Go out and actively look for something decent to live in. It wasn't pretty, and if you throw a pet or a baby in the mix, you are hooped. I have been told here before that "well of course you are going to get dinged for having a dog". Uh, what? So then the whole theory of renting being better is flawed. If I can't just… Read more »

domus
domus
10 years ago

The flow of listings is astonishing. This is a complete debacle, there is an incredible rush to the exits. Everybody wants to sell.

I really wonder how buyers can justify their purchases, but i guess time will be a gentleman and will show us who was right.

paulb
10 years ago

New Listings 470

Price Changes 157

Sold Listings 329

Still coming… 500 lets go!

Best place on meth
Best place on meth
10 years ago

@Inventory:

Only a net gain of 40 inventory today?

I'm outraged!

Inventory
Inventory
10 years ago

Apr 19, 2010 = 16,088

Apr 20, 2010 = 16,305

Apr 21, 2010 = 16,340**8:30pm

Absinthe
Absinthe
10 years ago

@Absinthe: (Of course, we have very good credit and no criminal background and don't smoke. We do have a cat and kids, which did take some quick talking. I agree that there was competition out there, and that landlords were picking on lifestyle considerations more than they can afford to now – not that many of them have noted this.)

Absinthe
Absinthe
10 years ago

@freedom: I got the top two floors of a house for $1400 last summer. There weren't tons of options, but I certainly wasn't looking at moldy basements, and I capped my search at $1500 and it had to be IN Vancouver.

Plus, I was doing extensive market research the year before on behalf of advocacy work and finding all sorts of inventory below $1800. If you're really constrained to location (ie: Dunbar), you might have a hard time – but even still, we looked at a place in Dunbar for $1650; main floor of a Vancouver special (tenants upstairs, but nothing underground) because I'd hoped utilities might be all in.

me
me
10 years ago

thanks paulb

my take is that listings are still trailing in from last weekend and will all week

also, lots of fools still trying to cash in their low rate pre approved rates, will keep sales strong, but on a downtrend

listings – i expect more 500+ days ahead

17000 next week

paulb
10 years ago

New Listings 431

Price Changes 157

Sold Listings 329

Listings are unstoppable! Huge sales day also.