Canada To Raise Interest Rates Sooner Because Of High Inflation

[Blastertoyo 22,734]

2 minutes ago, Economy said:

Again tho, i dont know all the details of BCs housing market thats why im asking. Do they kniw that for a fact that forein buyers are making it expensive or is it just a general belief still to be proven as it is here in Toronto?

The evidence is mostly anecdotal but the fact that the majority of ppl I know that are renting have foreign landlords that don’t live here is enough for it to not just be dismissed as speculation, I also have friends who who work in real estate who can support that their clientele is mostly foreign.
there isn’t really a housing shortage since new apartment buildings townhouses literally keep popping up and selling like hot cakes (more often than not with foreign advertising banners showing their target clientele). There’s plenty of housing, but none of it is actually affordable.

[Economy 52,838]

2 minutes ago, Blastertoyo said:

The evidence is mostly anecdotal but the fact that the majority of ppl I know that are renting have foreign landlords that don’t live here is enough for it to not just be dismissed as speculation, I also have friends who who work in real estate who can support that their clientele is mostly foreign.
there isn’t really a housing shortage since new apartment buildings townhouses literally keep popping up and selling like hot cakes (more often than not with foreign advertising banners showing their target clientele). There’s plenty of housing, but none of it is actually affordable.

Oh that im not totally surprised of

 

However If they have landlords it means they are still occupying the place. Regardless of who owns it, a foreign buyer doesnt make housing supply worse if hes renting it out and still having it occupied. If its rented out still and someone living in it it shouldnt affect vacancy rates and competiton in rental market (however if they have more buying power it could still affect selling price in a tight market with bidding wars if locals cant compete)

 

What I mean tho is, many are making the claim foreign buyers are buying up places as investments and leaving it sitting empty as a speculative investment

 

Homes and supply being bought off market to sit empty is what would truly inflate the market especially rents. But the data so far hasnt vindicated such claims (at least here in Central Canada anyway)

[Blastertoyo 22,734]

10 minutes ago, Economy said:

What I mean tho is, many are making the claim foreign buyers are buying up places as investments and leaving it sitting empty as a speculative investment

They did put in the empty property tax so regardless of if the problem was actually there or not, it’s “solved” now that people are more or less “occupying” the properties 

[Economy 52,838]

2 minutes ago, Blastertoyo said:

They did put in the empty property tax so regardless of if the problem was actually there or not, it’s “solved” now that people are more or less “occupying” the properties 

We put in the same tax right after u guys. Same rate too (15%). Didnt seem to really do anything here

[Blastertoyo 22,734]

2 minutes ago, Economy said:

We put in the same tax right after u guys. Same rate too (15%). Didnt seem to really do anything here

Tbh I don’t know enough about any of this stuff to really be able to tell a difference, I just know everything here is expensive af and there’s constantly more people and less places to rent for reasonable amounts of money. It’s like we just accept that there’s no places for less than 2000$ 

I don’t really grocery shop so I can’t tell if bananas are more expensive ( I don’t even eat bananas )  but my mom tells me stuff got more expensive 

[Economy 52,838]

6 minutes ago, Blastertoyo said:

Tbh I don’t know enough about any of this stuff to really be able to tell a difference, I just know everything here is expensive af and there’s constantly more people and less places to rent for reasonable amounts of money. It’s like we just accept that there’s no places for less than 2000$ 

I don’t really grocery shop so I can’t tell if bananas are more expensive ( I don’t even eat bananas )  but my mom tells me stuff got more expensive 

Well that i can comfirm. Groceries literally hurt to buy these days

[gumzy3000 7,898]

So raising interest levels is going to cool down the market because less people will be able to buy houses? 

I doubt this would work in a city like Toronto. I actually think it would make things worse here unless you have a bunch of money/high income. We have way too many people coming in and a very limited supply of houses.

Housing is already so expensive here, I can’t even imagine how much more difficult it will be to buy with higher interest rates.

[PunkTheFunk 125,703]

1 hour ago, LaLa said:

today I went to buy a grocery staple for us... the absolute ledged $5 lunch meat

and it was $6 now 

anyway, not into it lol

 

[LaLa 19,898]

17 minutes ago, PunkTheFunk said:

 

[Chuckles 2,549]

Isn't QE the govt buying its own debt?

Also isn't the govt stimulus "coming back to the economy" as in spending in rent, groceries, etc?

 

[Economy 52,838]

21 hours ago, gumzy3000 said:

So raising interest levels is going to cool down the market because less people will be able to buy houses? 

I doubt this would work in a city like Toronto. I actually think it would make things worse here unless you have a bunch of money/high income. We have way too many people coming in and a very limited supply of houses.

Housing is already so expensive here, I can’t even imagine how much more difficult it will be to buy with higher interest rates.

Interest rates dont really make buying a house more or less affordable in the long term. Raise rates and the principal drops but interest payments rise... lower rates and its cheaper to borrow but principal rises...

 

Ultimately in a tight real estate market some ppl basically have to get bid out of it if demand exceeds supply. So ppls purchasing power stays relative to where rates go

 

But interest rates and inflation isnt about real estate specifically (even tho its a particularly sensitive sector to rates)... interest rates affect inflation in the economy as a whole in general

 

Thats why when inflation is low or economy weak (both often go hand in hand) rates are lowered. If economy strengthens or inflation rises, usually rates are increased to fight it

[Economy 52,838]

15 hours ago, Chuckles said:

Isn't QE the govt buying its own debt?

Also isn't the govt stimulus "coming back to the economy" as in spending in rent, groceries, etc?

 

Yes... by buying its own debt with printed money it doesnt have to borrow it from existing cash thus its not taken from the system via bonds purchased by investors, institutions or pension funds and so the deficit spending thats purchased by QE becomes pure added money to the system

 

And yes it comes back to economy. More currency for the same amount of goods and services available

 

Inflation was inevitable. Now that were reopening we gotta deal with the aftermath. There was no way to deal with a pandemic with 0 economic pain. One way or another we pay for it. The way we did it inflation is part of the cost