Is the housing bubble about to burst
- Thread starter K Douglas
- Start date
What is the average rate of those mortgages and what rate do they renew at? From what I am reading payments for those renewing in 2025 will be up 10% and in 2026 6%. That should not be problem unless you lost your job.
If there is no induced Trump-tastrophe, I see things going along as they have been. There is a possibility of a temporary slow down in housing sales and stagnant prices when the Ukraine war ends. Refugees will be streaming back to Ukraine from countries around the world. No matter what kind of shit hole people are from, home is home and it is what they know. Ukraine is not such a bad place, so many would prefer to return. With the majority of the 300,000 just from Canada returning home. There will suddenly be a temporary housing glut. Most effected will be rental properties, less so for single family houses.
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Pre-pandemic, 5 year was ~3%, in 2021 5 year was as low as ~1.4%, right now it is probably ~3.75%. With 3 rate cuts, I can see ~3% for 5 year in 2026.
If you already have a home paid off and a decent stock portfolio, can you get a loan at the same interest rate as a mortgage if you put up your home and stock portfolio as collateral? If interest rates get to near 2% that is cheap money, I would want to take out a 50% loan on my assets just to invest it.
If you already have a home paid off and a decent stock portfolio, can you get a loan at the same interest rate as a mortgage if you put up your home and stock portfolio as collateral? If interest rates get to near 2% that is cheap money, I would want to take out a 50% loan on my assets just to invest it.
thats leverage at its best. My HELOC is about 4.75% which is generally 2 points above the bank rate. i use some of it to invest. late last year when it was 8%, i rebalanced to pay it off.
Many of these mortgages were at rates of 2%, some even lower. Even with the recent decrease in the BoC prime lending rate mortgage rates will still be around 4.5%. On a $700K principal amount, payments would rise from $2,965 to $3,875 per month. That's a 31% increase.
the numbers I quoted were the net impact of monthly payments, which is what really matters as long as you remain employed. Thus the Carney tax cut, just to give those people a bit of help to hang on to their homes.
What would be you prediction for the year 2026 / 2027. I see very difficult 2-3 years for many.
One thing that I can confirm --that AI is going to automate a lot of jobs in coming years. We already have the tech -its just most people don't know how to use it
It's very difficult for me to understand without incomes --how will people buy houses.
I keep hearing all types of crazy delusional narratives all the time. Like 2027/2028 --we will have mass immigration from other parts of the world (due to geo-political chaos). Some friends calls about people moving from US due to chaos there.
After Trump's H1B move -new narrative is that --all those tech workers will move, and Mr Carney also made a statement.
To provide other side's view --We already had scarcity of homes and no developer is building right now due to high rates so that will further alleviate the problem of scarcity of homes
One thing that I can confirm --that AI is going to automate a lot of jobs in coming years. We already have the tech -its just most people don't know how to use it
It's very difficult for me to understand without incomes --how will people buy houses.
I keep hearing all types of crazy delusional narratives all the time. Like 2027/2028 --we will have mass immigration from other parts of the world (due to geo-political chaos). Some friends calls about people moving from US due to chaos there.
After Trump's H1B move -new narrative is that --all those tech workers will move, and Mr Carney also made a statement.
To provide other side's view --We already had scarcity of homes and no developer is building right now due to high rates so that will further alleviate the problem of scarcity of homes
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The world was changed by the pandemic, which is a naturally occurring even approximately every 100 years. Then immediately after the pandemic came the Trump plague. The lower classes of America backed Trump because he promised what they wanted to hear. Just as life change after WWII we will probably see life change for us in the near future, but not for the better. The average guy here on TERB will probably not see the worse of times as the world deteriorates.
Well if things get worse for everyone then it will be worse for the poor probably (always is) so all I need to is really decent food. I am quite confident I can remain housed. And deflation should make people with some money richer. I think globally they will have to reduce the work week to maintain employment, so its not all dark.
I logged in to terb today not to check on SP but just to hear your views. Thank you for sharing your insights.
Stocks as investments are for the rich to get richer.
The poor and the not-so-rich (roughly 80--90% of the population)
represents only a small proportion of ownership of all stocks trading
in the market.
With Donald Trump in charge more money will flow from the poor
into the pockets of the rich.
Just follow the rich on where to put your money. You can count
on President Trump for a few more years of handsome returns
from the stock market.
The poor and the not-so-rich (roughly 80--90% of the population)
represents only a small proportion of ownership of all stocks trading
in the market.
With Donald Trump in charge more money will flow from the poor
into the pockets of the rich.
Just follow the rich on where to put your money. You can count
on President Trump for a few more years of handsome returns
from the stock market.
The biggest plague in history is Trudeau. His out of control immigration policy caused prices of houses and rents to go sky high. Carney takes over but follow Trudeau's agenda. The Liberals got an obsession with never ending GDP growth. Trudeau wanted that seat in the UN security council. He drove Canada to the ground. There is a severe imbalance between demand and supply and this is not something that will be fixed over night. The Liberals want to keep prices high because they also want the votes of homeowners.
That is what Trudeau's mass immigration policy did plus his wealth redistribution plan. Since Trudeau Canada has the biggest gap between rich and poor since the last one hundred years. Rapid population increase benefit the rich the most.
In Canada you can pass down your primary residence without capital gains tax but other assets are taxed as capital gains before it is passed down. Housing gets too big of a tax advantage so it becomes the best investment.
In the US all assets including housing gets a 10 mil exemption for taxes when being passed down. So housing and investments are on equal footing in terms of tax treatment.
We should adopt the US style. The Canadian stock market would rise and housing investment would be a less attractive investment.
In the US all assets including housing gets a 10 mil exemption for taxes when being passed down. So housing and investments are on equal footing in terms of tax treatment.
We should adopt the US style. The Canadian stock market would rise and housing investment would be a less attractive investment.
If we allow principal residences to become taxable as a normal investment then we should be able to deduct property taxes, mortgage interest etc. for income tax purposes. This just complicates our tax system further. I get what you're saying but I'm not sure I'd be on board with it.
The thing that is driving prices so far up is the lack of development of new homes (other than small condos). This has been pervasive for at least past decade if not 15 years. Developers margins are too tight and the process is too long so the risk capital isn't being deployed like it should be.
