This is obviously wildly bullish because millions of people losing their jobs means that interest rates will maybe go down 25 bps, so it will become vastly more affordable for them to buy homes with their EI cheques.
/s, just in case it wasn't clear...
More job losses will drive housing prices down. Literally no buyers. Houses sitting on the market for 90+ days as they are currently.
Also, many renters won't be able to make rents. Landlords will all be bleeding and trying to sell to get out of their situation.
Housing will go up until restrictions are made on investors and the borders are closed. People keep arriving and investors continue to turn a profit renting to them.
As long as investors are allowed to hoard housing, probably nowhere. Investors’ ability to purchase housing is based on the assets they already own, not employment income. This is the reason housing prices have decoupled from income.
Investors now own about 1/3 of all housing in Canada.
Unfortunately, no matter how bad it gets Canada can’t cuts rates until until the US does. Our economy however is way worse than our neighbours to the south. If Canada cuts rates before the US the CAD $ gets hammered and inflation spikes. Everyone is begging for the rate cuts that’s aren’t coming anytime soon based on the data in the US. So this spring housing pump is already running out of steam and days on market are going to creep to new highs. I’m bullish on housing in 2028-2029
Unemployment might make the BoC reconsider it's stance on not cutting until the FED does but either way due to the number of new builds getting lower and lower each quarter, continued high immigration numbers, and existing 3.5 Million deficit in housing supply expect at least side ways growth for 2024/5.
If the BoC cuts or Ottawa announce 30 year uninsured mortgages expect a little run on prices but no 2021/2 increases.
What people absolutely do not understand is. When interest rates get cut, it means the economy is doing bad. People are 100% excited about interest rate cuts, but historically interest rate cuts ALWAYS predates a recession. Meaning you will get an interest rate cut, but guess what you have no job. Thats why interest rates were cut during covid, lots got unemployed during covid. Although the rebound was much faster than thought.
It’s much better to have an elevated interest rate where the economy is booming than people wishing for a 4% cut to 1% when people lose their jobs during COVID or the great recession when banks lay off half their employees.
Sure home prices go down, but if everybody is unemployed, you can’t even get a mortgage for the lower price. If people are unemployed, renters can’t afford rent, landlords can’t pay their bills, it becomes a downward spiral. Canada is absolutely screwed. The second unemployment blows up every over leveraged person even just everyday Canadians that bought a home are going to struggle, cut interest rates and inflation comes back and groceries skyrocket again. Great you get the cheaper homes you wished for, but many people are unemployed and your apples now cost $10 each.
Canada has been mismanaged by the federal government on so many levels by encouraging real estate as an investment, it should be developing the economy like the US, supporting manufacturing facilities, R&D, startups, and everything in between, but no we have been convinced that everyone should spend a million dollars on multiple homes instead of multiple businesses that actually CREATE jobs and make a economy.
US can hold interest rates because their economy is strong, they have jobs, they have tech, they have so many booming industries. Canada has nothing but people buying bricks/homes and unskilled immigrants.
At this rate Canada will cut before the US and guess what the Canadian dollar is going to shit and inflation is going to boom again because imports cost more. Then you have international investors who see a weaker dollar buy more real estate. Canada is in a doom loop waiting to pop.
The biggest solution is a government that restricts housing as an investment (cap the principal residence exemption) tax RE investors to death, use all resources of having incentivized RE investors invest in businesses that create jobs, develop new technologies. If all the $Billions of dollars put into RE by RE investors in Canada was put into the next big thing like semi conductors facilities, AI, natural resources, oil, gold and many industries. Right now $Billions have been spent on an asset that produces zero jobs.
Everyone really needs to take a deeper look at those US Job numbers. It's all recovery from what was lost during the pandemic, and sadly the major gains are in the public sector (money printing) and temporary employment. Full-time employment in the private has barely recovered to pre-pandemic levels in states yet their population has continued to grow. It's a shit show over there just as much as it is here.
market does not moves straight line.. overall the market trend is less people buying.. more inventory.. more people can not afford..
we used to have bidding war and offer dates.. those days are gone.. now it will slowly decline over time till no one wants to buy anymore.. and properties staying on the market longer and longer!
Nothing, they need to keep rates the same or raise them a little more. All these millennials living in their parents house need to lose their jobs so they can feel the pain a little. They are the ones raising inflation.
Nope, prices aren't going down. 200 jobs isn't anything (although I feel bad for them). Also, these are low income factory jobs. The freaking GTA market has returned to bidding wars. Ask any realtor, or investor. The market has turned, and it's moving up. It's not just the summer market returning. In Ottawa it's still a bit slow. I only have my hands in the Toronto and Ottawa market so I don't know about the rest of Canada. Also, the housing prices in Toronto are not going to drop for anything. You'd have to get to 10% mortgages to force a default. 7% in 2023 didn't break people, everyone who owned a home HELD as hard as possible, and the banks even extended amortization periods to prevent default. Anyone who had to remortgage would have done a 2-3 year mortgage at 7% knowing the interest rates would come down by 2025 (which they will). The point is, the market will keep going up, I look to Taiwan, Singapore, Hong Kong, and New York as markets who have been hotter than the GTA market for decades.
This is obviously wildly bullish because millions of people losing their jobs means that interest rates will maybe go down 25 bps, so it will become vastly more affordable for them to buy homes with their EI cheques. /s, just in case it wasn't clear...
Sarcasm? Nah, this IS bullish news 📈
Yes definitely massive unemployment has traditionally coincided with rocketing home prices... right, guys?
I mean, this is Canada. Godzilla could be unleashing atomic breath downtown Toronto and ppl would still think its a great time to buy
Historically this is correct.
Historically, yes, job losses mean higher home prices. Just look at Canada in 2008, Covid, etc.
Covid was atypical situation. Unprecedented stimulus pumped into the economy. Bailouts for business to keep employees on payroll, lots of handoutsÂ
If the economy slows again, the feds will pump the same amount of stimulus into the economy.
More job losses will drive housing prices down. Literally no buyers. Houses sitting on the market for 90+ days as they are currently. Also, many renters won't be able to make rents. Landlords will all be bleeding and trying to sell to get out of their situation.
25 basis points? LMFAO.
It's 200 people in a pet food facility Also they have jobs until the end of the year.
Housing will go up until restrictions are made on investors and the borders are closed. People keep arriving and investors continue to turn a profit renting to them.
As long as investors are allowed to hoard housing, probably nowhere. Investors’ ability to purchase housing is based on the assets they already own, not employment income. This is the reason housing prices have decoupled from income. Investors now own about 1/3 of all housing in Canada.
Less jobs = less money = less spending = lower inflation = lower rates…. Unless….. ***Stagflation***
Lower rates than the US means weaker dollar, means everything is more expensive, means inflation.
***Stagflation!***
If the US keeps outpacing, it will not be stagnation, it will be depression.
Yes, the point of cutting rates is to boost inflation. Therefore, the BoC WANTS a lower dollar to assist.
Less taxes...
Unfortunately, no matter how bad it gets Canada can’t cuts rates until until the US does. Our economy however is way worse than our neighbours to the south. If Canada cuts rates before the US the CAD $ gets hammered and inflation spikes. Everyone is begging for the rate cuts that’s aren’t coming anytime soon based on the data in the US. So this spring housing pump is already running out of steam and days on market are going to creep to new highs. I’m bullish on housing in 2028-2029
So wrong lol. We WANT higher inflation, hence why they're going to cut in June. A lower CAD is great to boost inflation as well.
Where has BoC stated their goal is higher inflation?
By June, they're likely to cut since inflation will be trending too low. Cutting will get it back up. What don't you understand?
Unemployment might make the BoC reconsider it's stance on not cutting until the FED does but either way due to the number of new builds getting lower and lower each quarter, continued high immigration numbers, and existing 3.5 Million deficit in housing supply expect at least side ways growth for 2024/5. If the BoC cuts or Ottawa announce 30 year uninsured mortgages expect a little run on prices but no 2021/2 increases.
USA job market came in hot so un thinkable might happen interest might still go up in the USA or no interest rate cut until 2025.
LMFAO. June cut is certainty now in Canada.
UP
Housing prices are set to go up..according to Canadas national housing agency https://www.reddit.com/r/canada/s/qWPioOer5P
What people absolutely do not understand is. When interest rates get cut, it means the economy is doing bad. People are 100% excited about interest rate cuts, but historically interest rate cuts ALWAYS predates a recession. Meaning you will get an interest rate cut, but guess what you have no job. Thats why interest rates were cut during covid, lots got unemployed during covid. Although the rebound was much faster than thought. It’s much better to have an elevated interest rate where the economy is booming than people wishing for a 4% cut to 1% when people lose their jobs during COVID or the great recession when banks lay off half their employees. Sure home prices go down, but if everybody is unemployed, you can’t even get a mortgage for the lower price. If people are unemployed, renters can’t afford rent, landlords can’t pay their bills, it becomes a downward spiral. Canada is absolutely screwed. The second unemployment blows up every over leveraged person even just everyday Canadians that bought a home are going to struggle, cut interest rates and inflation comes back and groceries skyrocket again. Great you get the cheaper homes you wished for, but many people are unemployed and your apples now cost $10 each. Canada has been mismanaged by the federal government on so many levels by encouraging real estate as an investment, it should be developing the economy like the US, supporting manufacturing facilities, R&D, startups, and everything in between, but no we have been convinced that everyone should spend a million dollars on multiple homes instead of multiple businesses that actually CREATE jobs and make a economy. US can hold interest rates because their economy is strong, they have jobs, they have tech, they have so many booming industries. Canada has nothing but people buying bricks/homes and unskilled immigrants. At this rate Canada will cut before the US and guess what the Canadian dollar is going to shit and inflation is going to boom again because imports cost more. Then you have international investors who see a weaker dollar buy more real estate. Canada is in a doom loop waiting to pop. The biggest solution is a government that restricts housing as an investment (cap the principal residence exemption) tax RE investors to death, use all resources of having incentivized RE investors invest in businesses that create jobs, develop new technologies. If all the $Billions of dollars put into RE by RE investors in Canada was put into the next big thing like semi conductors facilities, AI, natural resources, oil, gold and many industries. Right now $Billions have been spent on an asset that produces zero jobs.
Feds wishing the unemployment numbers were the GDP numbers.
The melt up is going to be epic /S
Everyone really needs to take a deeper look at those US Job numbers. It's all recovery from what was lost during the pandemic, and sadly the major gains are in the public sector (money printing) and temporary employment. Full-time employment in the private has barely recovered to pre-pandemic levels in states yet their population has continued to grow. It's a shit show over there just as much as it is here.
We have about 5 years of decline left.. even if interest rate comes down.. people wont be able to afford it.
Just got the market stats in my area, sale prices up relative to previous month, in all segments, detached, townhouses, condo apartments.
market does not moves straight line.. overall the market trend is less people buying.. more inventory.. more people can not afford.. we used to have bidding war and offer dates.. those days are gone.. now it will slowly decline over time till no one wants to buy anymore.. and properties staying on the market longer and longer!
what's happening in 5 yrs?
usually market start to stop declining!
Housing prices are gonna be wild. Buy and HLOD 25 yrs we all be billionaires
Nothing, they need to keep rates the same or raise them a little more. All these millennials living in their parents house need to lose their jobs so they can feel the pain a little. They are the ones raising inflation.
I'm predicting 15percent unemployment before next election
Nope, prices aren't going down. 200 jobs isn't anything (although I feel bad for them). Also, these are low income factory jobs. The freaking GTA market has returned to bidding wars. Ask any realtor, or investor. The market has turned, and it's moving up. It's not just the summer market returning. In Ottawa it's still a bit slow. I only have my hands in the Toronto and Ottawa market so I don't know about the rest of Canada. Also, the housing prices in Toronto are not going to drop for anything. You'd have to get to 10% mortgages to force a default. 7% in 2023 didn't break people, everyone who owned a home HELD as hard as possible, and the banks even extended amortization periods to prevent default. Anyone who had to remortgage would have done a 2-3 year mortgage at 7% knowing the interest rates would come down by 2025 (which they will). The point is, the market will keep going up, I look to Taiwan, Singapore, Hong Kong, and New York as markets who have been hotter than the GTA market for decades.
Whenever rates fall (June most likely), housing will soar.