How to prepare for interest rate hikes.

We should be well and deep into the ‘boy who cried wolf’ territory by now.

How long have you heard warnings that interest rates may be going up?

We’ve all become so used to hearing that it’s going to be a big surprise if they do.

The CBC has an article that says interest rates will go up this year and here are 4 ways Canadians should prepare.

#3 is ‘don’t rush to buy a home’:

Higher interest rates could also lead to a correction in the housing market.

“The big issue as far as I can see is that people panic and think they have to get into the housing market before interest rates climb. But they have to recognize the overall long-term impact of interest rates actually climbing,” says Laurie Campbell, CEO of Credit Canada Debt Solutions.

Homebuyers who rush out to purchase homes to beat a spike in rates could end up with homes dropping in value.

“I think people have to be vigilant about any big purchases they may be making in the next little while. Housing in particular,” Heath says. “If someone is considering purchasing a house, they have to really look at more normal interest rates during their budgeting.”

Read the full article here.

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Oracle @ 147

don’t see how you could pull that off – most couples struggle with getting a first class mortgage from decent lender showing dual income – with just single income to show – they wouldn’t be able to afford to buy. Most spouses would have to have good credit history and guarantee the mortgage to get a decent mortgage.

If the market turns bear – mortgage lenders will also turn bear and loan conditions will be tougher – so even more difficult to get finance on a single verifiable income.


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Here’s an idea.

Let either the wife or husband buy a house. If the market tanks, let whoever owns the home declare bankruptcy. Divorce if you have to. Let the state and banks deal with the losses. Then the other half can buy when the dust clears. Then get remarried.



Yes but the ‘it’s always been like this’ or ‘unaffordable is unaffordable’ line – is a lazy, defeatist, or (when used by bulls, RE industry. etc) disingenuous argument that simply gives bulls room to explain away the RE insanity, or more importantly, allows our elective representative the slack to do nothing.

“What can we do. It’s always been expensive.”

Well 8 x income in the 70’s or 80, or 90’s isn’t the same as 20x plus income in 2015. Particularly East of Main.

It simply ISN’T the same as historical pasts.


‘Historical expensive’ is still too expensive for almost all families to buy a SFH in Vancouver proper as a first time buyer. That is not going to change. Even with a 50% correction and normal interest rates at say 6% you can do the math on what is affordable and a SFH is in Vancouver is still not affordable for most.


Oh, I tried to open an account in India last time I was there…turned down because I was born in Canada..

Damn I wish I was a permanent resident. $1 Million earning me $90,000 per year would be sweet.


Canadian Dollar falling of a cliff vs the Indian Rupee. This gov should be tried for treason…they’re making everyone here poorer. Meanwhile I know many Permanent Residents here in Canada earning 9% interest in bank accounts in India. One family just sold their land for $2 Million Canadian, now in the bank earning almost $200,000 per year.

Yes report it blah, blah, blah. But half of the south Asians in Surrey are doing the same thing. Unbelievable the corruption this gov allows.


Globe and Mail: Cooling Calgary real estate adds to fears beyond energy sector

it goes to show that things can change very quickly. no one saw the collapse of the oil patch coming


@ 140Ah the predictable ‘Well it’s always been like that post’.

Well, there’s expensive (historical expensive) vs expensive – things are out of control astronomically untouchable 20 x income for even an East of Main house expensive. Forget about any house West of Main expensive.

It ISNT ‘like it always has been’. You do the math.

Do you not get that?


It says that the picture is very bad, saying that the majority of sales (which are tiny condos) are under isn’t much comfort for woking families, and doesn’t really paint a true picture. I don’t know how you draw the conclusion that things aren’t that bad. They’re terrible. Something needs to be done. Obviously housing prices are in a bubble and ridiculously priced in Vancouver and everywhere else in the Lower Mainland. Having said that even if prices were cut by 50% and interest rates were normal a Vancouver SFH would still not be affordable for a typical working class family. They never were. My parents prior to having kids lived in Vancouver renting an apartment. In 1968 upon starting a family and wanting to purchase a SFH they moved to Surrey because that is all they could afford. Vancouver… Read more »

@ renters rule

“Paul B’s numbers show that listings are surging ”

Listings went from a peak of 17000 this fall to 10200 and now its at 10500
so this is what you call surging? only if you look at the graph with a microscope, the same microscope you try to find your dick with.
You think I’m smug? If real estate tanks, its ok because I am retired in my 30s from other investments. boom

UBC in Crisis Mode

According to BC Assessment, Van West average 50′ property value increased from $1.6 mil to $1.8 mil:

Joe Mainlander

@RobertJ #135. Unfortunately, 65% of Metro Van are homeowners, think they’re millionaires now, and don’t want prices to fall. Thats is the biggest incentive for politicians not to act.

And I didn’t say not to worry. The fact that most sales are less than a million IS reason to worry. Not sure where you got that 80% from, probably just hyperbole. It appears that most working families ARE choosing to buy. And go into huge debt to do so. Certainly the ones I work with are. That is more worrying than the 10% of rich folk buying those plus million $ homes.


good point Shut It Down Already – but i am talking about families – that is couples with kids – who didn’t jump into housing earlier – so, yes, technically they are first time buyers – even though they maybe in their thirties or early forties. For them there is no concept of a housing ladder – starting with a one bedroom condo and then eventually moving up to a decent sized home.


Yes the HUGE trouble is that a Condo isn’t housing. It isn’t housing for ANY family with just one child over 5.

And expensive isn’t just expensive no matter what. There’s expensive which is relative to historical norms re income. And there’s insane expensive where 80% of working young couples can’t even begin to consider ever buying a house.

We have to draw distinctions and not resort to too many generalizations. If there’s a rapid increase in the severity of the ‘expensive’ to the point of it being potentially a sociological problem then we cannot say ‘well It’s always been that way (expensive)’ or ‘don’t worry because 71% are still under a million’ (condos!)

That kind of narrative just gives our elective representative an escape route to not act.

Joe Mainlander

@#129 I wasn’t inferred things aren’t bad. I made no inference, just presented stats so that the context is understood, because the Sothebys infomercial in the Sun was presented without the context of total sales. PersonalIy, I don’t think i can buy a home better than the one I rent and also save enough to retire. That’s not a lot of comfort for me either. I’m countering Sothebys (and others) inference that the market is driven by mostly wealthy buyers. It appears to be driven from the bottom, by people taking on a lot of debt to buy crappy condos. Removing a portion of the market does not give a total picture. Yeah, sure, if you remove condos, then houses are expensive. And yeah, remove homes nearer to the city centre then the ones in the suburbs are cheaper. Those… Read more »

Shut It Down Already

CanucksBoy, if the home costs $900k and the mortgage is for $900k then you’re forgettting that most move-up buyers would have a sizeable downpayment. Or do you really think that a first timer buyer should be able to buy a SFH in the city?


115 MikeS.. ideas…

My g/f mother is sellling her trailer in Langley cheap. Not on the market yet, but if it does list youve got a place for the inlaw.

My email

Happy to be an Ex-Vancouverite

Birth tourism from China on the rise in Richmond BC. Hong Kong banned expectant mothers from China in 2013.


Interesting blog.

I also think the real estate market is at a peak ( although i have been saying that for over 5 years now).

Prices in Vancouver are getting ridiculous – most families i know couldn’t afford the repayments on a $900,000 home even if interest rates were Zero ( amortized over 30 years, the monthly on 900k is $3,000 a month add to that taxes, insurance and upkeep and the average home in this city is clearly out of reach of the majority.

How much longer will this idiocy last?



127 wrote: “So, if typical, even in City of Van vast majority of sales are still for homes less than $1million.”

You use the word even. But doesn’t those COV sales stats also include Condos? If so, then that’d be the other 71% vs 29% of house – which would = pretty much 90-100% of houses? That is inane.

It says that the picture is very bad, saying that the majority of sales (which are tiny condos) are under isn’t much comfort for woking families, and doesn’t really paint a true picture.

I don’t know how you draw the conclusion that things aren’t that bad.

They’re terrible. Something needs to be done.

renters rule

oh, and mayor moonbeam, and the pop singer…hilarious deflection! what a joke!

Common knowledge these days, the mayor does not play for that team — and before you’all get p*ssed about that insinuation, it is not about the gender, it is about the WHO….. the optics are awful, and yes, corruption is the inevitable conclusion.

google it and become informed. what has happened to this city?!

Joe Mainlander

Re # 123

Here’s some stats on CoV only. Can’t find yearly stats, but here are some snapshots for March 2012 and February 2013.

Summary CoV;

March 2012
Totals Sales; 952, sales over $ 1mil; 255 (27%)

February 2013;
Total sales; 385, sales over $ 1mil; 112 (29%)

Other monthly stat packages for 2012 & 2013 also in this link, by price range. Didn’t do math for all of them, but glancing at all, it appears that majority of sales also tend to be in under $ 1million range.

So, if typical, even in City of Van vast majority of sales are still for homes less than $1million.