One Last Rate Hike From The Bank of Canada, Now What?
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- เผยแพร่เมื่อ 9 ธ.ค. 2022
- The Bank of Canada raised interest rates by another 50bps. However, they signalled they are now going to pause and assess whether more or are needed, a much different tone than in recent months. The 400bps move in interest rates is the fast tightening cycle in nearly three decades on top of a highly levered housing market.
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Honestly home prices were WAY over valued as far back as 2010.
The bubble that has been created by low rates fomo and MASSIVE amounts of speculation over the last 10 years is popping.
Unfortunately I won't be surprised if we see home prices drop another 30% or more form today's prices....
Labor market will be impacted when US sneezes
Unfortunately this is going to be the next chapter in this story
Issues are govt makes home building very very expensive, makes life very very expensive, makes it very difficult to have a business -having to carry so many lazy ineffective people. Seeing how communism/centralized control does not work all that well. plus immigration to prop up demand so people getting what it wants
@@NewYork0110J According to Black CEO there is a massive recession coming next year in the United States which means a lot people will lose their jobs. That is very very bad news for us. Canada is only 2 percent of the world economy. The impact on the Canadian economy will be huge.
@@carlgoldsmith6109 Yeah I agree and Tim is ensuring we go through that grind so that his masters can become richer and people slaves.
I cancelled my Disney Plus subscription to combat these rate hikes.
LOL
Freeland’s burner account? 😂
@@sharinglungs3226 nah. The disney plus meme is stronger than me
😂
Oh cool, did the government announce a full stop to inflationary policies like immigration and QE?
Nope - still enforcing policies which hinder our productive capacity, trying to import a city a year worth of mostly unproductive people, and spending money like pirates.
Inflation is well above the 2% target I would not be Surprised if the BOC rate is 5% by mid next year
Inflation rate you refering is annualized. It will come down fast.
@@NewYork0110J I would not hold my breath
@@Matt.k864 in realty inflation is trickling down except food guys are roaring due to crop losses and higher input costs. If you talk to manufactures their several costs are down but they are not passing it down yet.
You’re looking at headline CPI on a y/y basis. 3 month annualized inflation is running at like 3%.
Hiking the HST and income taxes can do the same thing. Let’s make everyone more poor.
Good opinion. Thank you.
They're not finished.
Hiking the HST and income taxes can also fight inflation. Let’s make everyone more poor. We will see rampant deflation for sure
This isn't the last rate hike I hope you all realize this.
Hiking the HST and income taxes can do the same thing. Let’s make everyone more poor.
Mexx indeed I agree.
I just cannot believe that a one-bedroom downtown Vancouver is now renting at $ 2600 per month YIKES! Inflation is still sky high, even for me making over 6 figures. I was at Safeway yesterday STEAK was $ 75 per KG, Butter was $ 8.99, Milk was $ 6.99 Chicken: was $ 24 for 2 pieces of organic chicken breast, and so on. This is RIDICULOUS. HOW DO PEOPLE AFFORD TO LIVE?
Yes but not everyone should be living downtown. It’s only so expensive because there’s demand for it.
@hmm1488 Calgary home prices sat flat for almost a decade. Still pretty affordable there
I don't think they're necessary done, we could see overnight rates as high as 5% next year.
They are way over the requried. They just need to give time. If they go above this or dont come down then they had unleased wat worse then ukraine Russia. People will revolt and we will have civil war.
Hiking the HST and income taxes can do the same thing. Let’s make everyone more poor.
BOC will continue to hike alongside of US and offset defaults through financial manipulation.
Looking forward to the general population learning what a full recourse mortgage means
They didnt say it was the last one
Probabilities suggest we are at or near the end for this cycle.
@@saretsky it doesn’t seem about probabilities anymore, this is part of a bigger plan, they are increasing rates without feeling bad for people’s mortgage payments while knowing it is not fighting inflation, increasing interest rates doesnt fix the supply chain issues, caused by covid restrictions, imposed by governments
Hiking the HST and income taxes can also fight inflation. Let’s make everyone more poor. We will see rampant deflation for sure
@@Observer168 that is if inflation was caused by overconsumption, they are indirectly fighting inflation, at the expense of people’s solvency
@@ShihabPersonalFinance yes, taxes will greatly reduce consumption.
It's so funny how people keep forgetting about all the renewals that are going to be coming up over the next year or so as well. You can pick on the variable people all you want but wait till the renewals come. ( and I'm not saying that Steve is picking on the variable people LOL) I'm not sure if the boc is willing to see house prices come down 40% to accommodate the new six or seven percent interest rates. I'm not saying that these prices are realistic at all but we're here now so what do we do? Another funny one is the hot labor market, haha. So how much do these jobs pay in relation to how much it cost to live? Mmmmmm
@Bills Mafia my point exactly. Fixed rate mortgage holders are not safe
@Bills Mafia agreed
The reason why it doesn't appear to be a crash is because the sellers are trying to adjust to the new financial challenges. They dont want to lower their price so some are trying to get it rented(which is now creating increased rental supply so rents are going down), some are trying to turn it into airbnbs with the same effect, some are taking extra work and side hustles. The problem is this is unsustainable over the long run and is only creating pent up supply which is going to create an avalanche at some point in the future. The next hammer to drop will be layoffs. And layoffs are quietly happening right now. Just alot of hush hush as Canadians never like to publicize negative news. I know of a big 5 bank where layoffs are happening right now. Entire departments in some cases. Nothing in the news though. By the time media starts talking about these things it will already be too late. Sit tight. This is just the calm before the storm
The naivity in this video is increadible.
As always, great conentent Steve!
I like this channel and have a lot of respect for Steve's analysis. However, one should be very cautious about buying into the idea that the BOC is done with the rate hike cycle. There is little evidence to indicate the Fed is done with their rate hiking and while the BOC may diverge from them, they will certainly think about that course of action very carefully. There are some important points to consider. First inflation has not yet ended, we continue to have high inflation. Second the US/CAD $ is always impacted if the Fed raises rates and the BOC does not match. Third, the world is well aware of the fact that unlike most CB's the BOC sold it's gold reserves a while back and does not sit on much (if any) metal. Sure the housing market will undeniably weigh very heavily on the BOC with pressure to cut rates or stop increasing them, but it's a very tough call either way. Canada's economy is so closely tied to America's that moving away from them, in policy, is just very difficult to do.
Steve is still a real estate agent. He was a good trend follower during the bull market.
But now he's taking his book from a real estate agent perspective.
If the government has to choose between the bond market and inflation, I think they'll sacrifice the housing market.
Most Canadians who own a single property will be fine.
Only over leveraged Canadians and over leveraged real estate investors are in trouble. (a small subset)
Let them go bankrupt and take them out of the credit market for 7yrs an miss out in the next bull market.
@@sketchin6993 I am Dr doom in the industry and a pumper talking my book on TH-cam. You really can’t win 😉
Yes agreed. THERE ARE NO CERTAINTIES. Only probabilities.
I think the b.o.c has to see what will happen next recession or higher inflation maybe lower then expected inflation at the end of the day thereal reason is clear the rate hikes came so fast they have to see what effects they are having before making another rate hike decision...I don't expect much more hikes I expect recession to be much more harsh then some expect.....followed with sticky inflation on a global scale this one will be tricky.....they should have just let the housing market crash and offered covid support In a way more targeted way.....to many wealthy Canadians cashed in big on money they should have never seen....put aside the fact that Canadians are banking on the money from their home to retire off if your downsizing to a million $$ home you an only cash in so much....we should not be so sensitive to Canadians banking on the home equity to retire off of...I mean what was The retirement plan prior to 2017 when prices started to blast off out of control these people had nothing that's on them not the future Canadians to pay for their retirement
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
JK. Love your content Steve.
BOC is stuck with whatever path the Americans take. Canada imports a lot of food and a sinking CAD buys you less. IMO food inflation is a priority over housing market “action”.
I totally agree with you. There is very clearly going to be a further stress with the recession and continuing inflation in items such as food that aren’t included in the CPI.
What a joke these extremely low interest rate hikes are… In the last year I think rates have gone up 3-4%?
Yes it takes time for the hikes to show up in the economy but still these .50% are a joke! Yes, I speak from being a debt-free and heavy liquid individual. Not one entity makes any money from me!
Hiking the HST and income taxes can also fight inflation. Let’s make everyone more poor. We will see rampant deflation for sure
If you trust words you get in trouble, as we all saw. Better trust moves.
I've been watching your videos religiously for a good while now. Excellent content. Keep it up!
The problem with low interest rate is that it creates a false impression on how much debt the average consumer can handle, which in turns drives huge demand for a lot of big ticket items including housing using paper money. Although the low rate was not the only factors responsible for the sky high/ out of control prices that we have seen in the housing market, it was certainly one the main ones. Now the central bank realized that they made a huge mistake by allowing interest rate to stay that low for that long, they have no choice but playing catchup and raising rate mercilessly to fight the runaway inflation. Now the average consumers have no choice, but face the grim reality of high interest rate. All I can see on the horizon is mounting bankruptcies and mortgage defaults, specially for those who recently bought houses at high cost using viable rate when interest rate was low as well as the ones with mortgage due for renewals. I don't foresee that the rate will go down anytime soon. My prediction is that high interest rate will stay elevated and may even go higher in the next 7 years. THE ERA OF FREE BORROWING COST IS LONG GONE. WELCOME TO THE NEW ERA WHERE HIGH DEBT SERVICING COST IS THE NEW NORM. Keep up with the payment by working 3 or 4 jobs with no sleep my friends!!! Otherwise, the bank will knock on your door asking for their money! Not a joke by the way!
In my view another rate hike in January 2023 0.25 then hold little bit longer.
Maybe real state sales down 60% December let's see next Month.
Inflation refutes Saretsky narrative. Also can't disengage from USD peg. Stray to far and CAD will fall below $.70USD. In turn will move debt service to insolvent ratios.
What narrative lol they are the banks comments not mine.
@@saretsky Narative? expecting a pivot in 2023 is hopeful desperation.What do you think your viewers would cling to in this episode. Remember well no warnings of the Ponzi pricing of the past 8 years. As for unwinding of the BOC increase. No data to back this up. Tiff knows along with USA CEO’s we are heading into a hard landing. Add up TDS of Canadians and watch as the debt service crushes. No way Maklem can pivot and take his rate down without Powell leading. Watch as BOC and Trudeau issue MORE USD denominated bonds to try to float the treasury. The Canada Titanic finance system has hit the iceberg and is taking on water. If you want to see the end , watch what Decaprio clings to. Even your ICEcap buddy is prophetically warning at the end of your last Looney hour, because he fears/knows the probabilities.
@@CANWESTTECH pausing rate hikes is a pivot? A pivot would be CUTTING rates which I did not say is happening anytime soon. It should be noted that MARKETS are pricing in rate cuts in Q4 of 2023. Whether that happens or not remains to be seen.
@@saretsky Misheard? Will re-listen. Apologies. Will note to what markets are pricing in Q4 pivot? Sources? Analysts? Bloomberg terminal? Bonds? Equities? CNBC? BNN Bloomberg? I don’t see it? Have a good week.
I've given up on this country. Housing is montreal hasn't even budged since the rates starting rising.
I'm just going to find a job in US and move
Wait until next spring. All hell will break loose
10+ years of very low rates, and hundreds of billions of "free money" poured to the economy within months... and people think there is no price to pay or that inflation will just suddenly vanish like nothing happened. Gargantuan amounts of cheap credit went to realestate and that money will slush around for a decade before permanent losses have been realized and the realestate beast has been slain. You will just end with stagflation if that largesse is not burned out and investments are not redirected to productive channels. There will be many "support levels" of people capitulating, and many rounds of "not believing" it could happen.
I remember when Steve was saying that the BoC is practically handing free money when rates were so low and you can't go wrong getting a mortgage. Such a great idea eh.
Home prices are still up by 60%. When is it going to pop ?
Agree that this should be the last hike, if anymore they would be minimal. Gas prices are down, the next inflation report dec 14 should be very interesting but January 14 I think will show inflation coming down quite a bit. Meaning the rate hike announcement Jan 25 will follow with no hike at all
Even if they pause now, keeping rates at that level for a prolonged period of time will crush most families
Families that fell for the real estate Ponzi scheme
I agree
you mean crush those who over levered? Dont take on what you cant handle? Dont gamble?
it will; crush those greedy and delusional gamblers who thought everything only goes up. Gamblers fallacy
"The gambler's fallacy, also known as the Monte Carlo fallacy or the fallacy of the maturity of chances, is the incorrect belief that, if a particular event occurs more frequently than normal during the past, it is less likely to happen in the future (or vice versa), when it has otherwise been established that the probability of such events does not depend on what has happened in the past. Such events, having the quality of historical independence, are referred to as statistically independent. The fallacy is commonly associated with gambling, where it may be believed, for example, that the next dice roll is more than usually likely to be six because there have recently been fewer than the expected number of sixes."
Your real estate people still havent accepted rate hikes? Inflation needs to come down, get over it and stop the whining.
Indeed, three month annualized inflation running at 3%.
I posted on one of your older videos that I believed the BoC would hike to 4% by E.O.Y.. People though I was NUTS. And would you look at that.. BoC hiked higher than that.
Steve you've been betting twinkies on 25bps hikes since September. You said it yourself on the Loonie Hour this week.. this is a "RUG PULL". You guys gotta dig deeper and realize that this was engineered. These officials are not as stupid as you think.
ML, well done
A realtor's job is to give confidence (illusion?) to buyers no matter what the reality is.
Hiking the HST and income taxes can do the same thing. Let’s make everyone more poor. We will see rampant deflation for sure.
@Mexx not sure you'd want them to hike HST.. you know if they do that, it'll stick.
I thought GST was just temporary post-WWII?
@steve , what’s the benefit of the rate hikes if people are still putting their houses on the market with a very high price tag? When do you expect prices to actually go down? Thanks
Hey Steve, how does this look from the perspective of a new buyer entering the market? We know rates resetting to todays number is killing current “owners”. New demand simply can’t qualify to borrow enough money at anything close to todays rates without a deep discount to prices.
7 percent by summer next year.
Underground banks like Silver International in Richmond allegedly laundered as much as $220 million a year. This is just one small operation in Canada. The triads have taken advantage of tight currency restrictions in China and turned it into a business. The amount of money laundered into Canadian real estate each year is in the hundreds of billions from all over the world. Where do you think all the drug money goes? It’s the worlds most profitable business.
Attacking real estate with high interest rates might not even put a dent into housing prices. I am sure some honest hard working people will be forced to sell their homes but it only creates an opportunity for people with lots of cash.
Renters hoping that homes will become affordable again will be disappointed. This is just another buying opportunity for people with deep pockets.
Deputy Governor Sharon Kozicki, in a speech Thursday in Montreal, said policymakers expect adjustments to monetary policy will be “more data-dependent,” but kept the possibility of larger hikes on the table.
"If we are surprised on the upside, we are still prepared to be forceful,” Kozicki said. “But we recognize that we have raised interest rates rapidly and that their effects are working their way through the economy.”
Yes I watched the full 30 minute speech. They are likely done or very close to it. Swaps markets pricing in another 25bps then done and cutting in Q4 2023. Let’s see
@Steve Saretsky yes I agree. The BoC should be more transparent though.. Powell seems to be more forthcoming with the Feds plans.
Just wanted to say thanks Steve for the content - It is not about being right or wrong, but about starting a conversation, and that is what you do with this and the Loony Hour. If I ever meet anyone who is always right, I am dragging him off to Santa Anita!
have they tried restarting it?
As monthly payments for mortgages rise rapidly, consumer discretionary spending will slow sharply. This has the knock on effect of rising unemployment as business sharpen their pencils and start to lay off staff (a lagging economic indicator). It is the combination of rising unemployment and the financial squeeze of higher mortgage payments that will drive forced selling of homes. This is what will drive down prices further - a lot further. First shoe to drop - the speculator who is 100% leveraged.
Hey Steve, look after yourself! This is life, up, down, and everything in between..the jungle..lol, gotta learn to laugh at the ridiculousness, it keeps you sane!🤣
They might do another one as the Fed isn't going to stop. He literally just said he is more worried about not raising rates enough than the collateral damage.
You should do a video showing average sale price to assessment price in BC I think that's the best judge of what the markets doing pricewise and you can see the last three months it's actually stabilized if you talk about stocks, no one cares if the volume is way down for a few months if the price is holding steady so we're not in a crash right now we're just in a very low volume. Which is bad for real estate agents I get it but not necessarily disaster for the market.
Lol
@@davidkania3720 Im not saying the assessments are accurate what I'm saying is the price places are selling vs the assessment is mote accurate then price per sqft or price average in general. Take maple ridge my town. Aug 102% price to assessment sep 102.5% oct 102% nov 99%. Now that from a high of 133% in feb. Now dec so far 97% so it could be falling again now. This is all detached
They’re doing 40 year amortization and interest only to try offset some of it. I called the 40 year amortization years ago
Why does it really matter how long the mortgage is? You either rent, buy or live with your parents since you need a roof over your head. anyway.
@@Observer168 extending the mortgage gives you more time to pay off the loan which will bring your monthly payment down that’s why it’s a positive. It’s a negative because it costs you more money in interest payments in the long run. So to answer your question why does it matter, I hope one of the two answers helps you understand.
@@b-rare I know, I mean you need a roof over your head anyway. The mortgage should end up cheaper than renting in the long run.
I don't think so !
Hi Steve, great video.
Do you think prices will go lower in the lower mainland?
I have noticed they are coming down and wondering my time frame to purchase.
I feel like I have about a year before things might turn around.
Things aren’t turning around. They are headed in a different direction.
Buying real estate is buying a falling knife. Rents will implode as landlords go underwater for their debt service not covering costs.
If rates stay here, yes.
@@saretsky thanks Steve!
won't stop until the unemployment rate is high so they can QE through Employment Insurance
Employment insurance doesn't work like that, that money is paid in by workers and is part of the money supply already.
@@quixomega are you sure how that work?
The 700K immigrants will help increase the unemployment rate
Hiking the HST and income taxes can do the same thing. Let’s make everyone more poor.
You also said rate hikes in Q2 of next year lol. Common steve
BOC has to keep up with the fed....or our dollar tanks..
It’s a relative game. There are more than two currencies.
It is, but we import a lot from the US. Will add to inflation. The world is so intertwined.
Following her speech she took questions, and someone asked her opinion about falling bond yields. She dismissed this as being only a single signal and a volatile one.
Also, Carolyn Rogers specifically said that house prices “need to come down” on November 22. This would seem to contradict your belief that they wish to protect the housing bubble.
I think housing is definitely a leading indicator when it happens to be a deflating bubble.
I think prices are going to keep grinding lower man.... They got a grind until they reached the aggregate affordable level of buyers...
There's going to be some great opportunities coming up but it could take a few years before they actually get here
Deflation is coming...
What worry the most central banks is a prolonged high inflation period because that diminishes their ability to react to a future crisis as tools such as QE and ZIRP are highly inflationary.
Hiking the HST and income taxes can also fight inflation. Let’s make everyone more poor. We will see rampant deflation for sure
Central bank will hike rates as long as inflation is above target rate. Decades of ultra low interest has led to these incredibly high debt levels. So its backwards to argue that rates need to be cut cause debt is high. No rates need to be atleast neutral and there should be real rates(interest rate >= inflation) to prevent debt and asset bubbles
Hi Steve. I'm from Yellowknife NT and just wondering if you ever come across any data or predictions of housing market in Canada's North. Great show and look forward to every episode.
I know building there is difficult, and you guys have a hard time completing projects
@@donm2067 yes there is limited almost no land to build on and construction costs are 25 percent higher than in the south. Very challenging housing environment.
I wish but not really much data or coverage there
Steve I think you been wrong on every prediction. Do not say this is the last rate hike it's data dependent. I understand your optimistic given your a Realtor. Face the facts, with the pandemic central banks have essentially kicked the can down the road. It's time to face the music for a number of years now.
Now high interest rate for a while.
Yeah lookinga guns ban liberal were planning for this. So they are in rush to ban arms. As civil unrest is on the cards.
Until things break like 2008. Hiking the HST and income taxes can also fight inflation. Let’s make everyone more poor. We will see rampant deflation for sure
They will finish at the same predicted rate as the U.S at 4.75% - 5%
Yeah they lick US Fed.
There's a few 25 bps increases in the gas tank for the first half of next year. In the medium term, housing affordability will moderate to reasonable levels versus a housing crash, interest rate cuts, and wage growth.
What's happening now is borrows are finally feeling the affordability crisis alongside what new buyers have felt for the last two years
Hiking the HST and income taxes can do the same thing. Let’s make everyone more poor. We will see rampant deflation for sure.
Far far far more than one mon ami!!!
Looks like this housing market is making Steve loss his hair.
Yep, best way to boil a frog, nice and slow....
I’m glad I live on a boat and am not a bank slave
The CEO of Black Rock states that there is a deep recession coming. If what is correct this recession will greatly impact us since Canada is only 2% of the world’s economy.
A recession can’t happen without unemployment.
Keep that in mind as we move into 2023.
I think the housing deflationary period will last a few years.
House inflation depends on money supply.
The government has to step in and help central bank to solve the problem that they both created. Here is what they can do:
1. Increase HST to reduce consumption.
2. Reduce corporate tax to increase production.
3. Make overtime hours exempt from being taxed in a higher tax bracket to increase productivity.
To prevent this kind of disaster from happening again:
1. Balance the budget, period.
2. Restrict central bank from reducing interest rate below rate of inflation + 1%.
3. Let interest rate float freely to reflect risk.
4. Use sales tax to balance the budget and to manipulate economy if you absolutely have to, but I would live it alone.
Call these rate hikes for what they are, a cash grab! Remember that time our leader said the government would be taking on debt so Canadians didn't have too? It's sad we are at this point and those responsible for getting us here need to have Canadians take a long hard look at thier job performance...
they have to crush the markets first to get the INFLATION rate down ... pivot maybe by 2024 or at earliest Fall 2023 ... there maybe will be major breakdowns by 2024?
For a central banker inflation is #1 concern. Real Estate is a concern, but # last.
Hiking income tax and HST can do the same thing as rate hikes.
@@Observer168 Exactly right. HST is the best vehicle. It is actually better to increase it to Euro level and decrease corporate tax. Less demand more production less price pressure.
@@klrrafman HST could be used to lower countries debt and there would be more money for social services. Rate hikes only benefit the BOC. You should find out who really started and owns the BOC
@@Observer168 Healthy interest rate set by the market is important too. It should never be lower or equal inflation. It should never have gotten below 3%. They did it against their statutory responsibility. They wrecked everything in the process. Nevertheless tax should be on consumption and not on production. This simple fact never been clearer in this situation, of their own making.
All bank of Canada needbs to do is give the USA Federal Reserve were to set interest rates.
Forget any other signs on the economy that an side line distraction.
They will keep raising until the real estate market capitulates and you see the same type of scenario play out in Canada that did in the the US housing bubble. Only Canada's bubble is much larger and consumer debt is much larger. Trudeau will push UBI in the spring election ...
More rate hikes to come in the new year! The interest rate should be higher than the inflation rate to have any material affect on the economy! Read some Milton Friedman and get educated!
Reset = Inflation won't go down 2%. Keep raising rates, to slow down Mortgage Home Prices.
Hiking HST and income tax can do the same thing.
Steve the eternal optimist
He's a realtor, of course lol
I’m often called doom and gloom. Can’t keep up 😂
@@saretsky This comment really goes to show how delusionally optimistic the vast majority of realtors often are, in fact most sales people in my experience. And there's no negative consequences to that in a bull market. But I think you have a well balanced view overall. Sorry for insulting your trade lol
@@saretskyyour perspective is very realistic, ppl just want a crash 😂
.5% is already way too far, they should have paused. Cadiandians will suffer for more months i guess, recession imminent after christmas spending
Only Canadians that borrowed or gambled too much will get hurt. It’s a very important but basic life lesson that a lot of Canadians and investors need to learn and probably haven’t yet.
They’ll learn the hard way like Americans did in 08 and then most won’t make the same mistakes again
@@jmela1370 Morality checks are indeed important in maintaining healthy markets!
Hiking the HST and income taxes can also fight inflation. Let’s make everyone more poor. We will see rampant deflation for sure. Instant results with a HST hike
@@jmela1370 so only retail borrow money? Not businesses/ private sector? Municipalities? Federal government ?
The debt:gdp will take everyone down. Even you.
@@Observer168 hiking interest rates only hurt people that borrowed way too much. For people that controlled/limited their borrowing to a decent level and save money it’s beneficial to them since they can make more money on conservative savings, and higher rates will stop/limit inflation within 12-18 months once interest rates are higher than the inflation rate.
Certainly raising sales tax will hurt everyone but an alternative is to just raise property taxes on investors that own 3 or more properties in the same province at the same time. Should be easy info to track since numerous US cities do that to tax the investors double or even triple the regular property tax rate so regular citizens that use their homes to live in don’t need their property taxes increased.
Wishful thinking from a RE agent. Better send out those job applications
Are you hiring ?
Inflation is being created by Foreign buyers and REITs with all cash transactions .
They don't need loans to create inflation.
Canadians are being priced out.
Actually it was free money by USA and BOC “QE” . Watch as the stock market desperately collapses from zombie companies being revealed. Result should be mass layoffs in tech and financial sectors. The QT dieting is just beginning.
@@CANWESTTECH We need an inflation tax on Commodities and Real Estate investors.
99% of homes are bought by Canadians. The foreign tax is 20%, they arent paying that, theres loop holes
lol, and foreign buyers also bought all gas and food
@@ghungroo3850 I don’t see how we stop a complete hard landing collapse. There is no math and no central bank tools to prevent the decline. Any interest rate pause will inflame inflation as it did in 70’s . There is no capitulation . Also interest rates at present levels will bleed out economies. The FED has to drop rates so other CB’s can react
Steve, if BoC pauses and the US Federal Reserves continue to hike, wouldn't that once again create more inflation in Canada?
Yes, the currency will tumble so we pay more for imports. Hiking the HST and income taxes can also fight inflation. Let’s make everyone more poor. We will see rampant deflation for sure.
@@Observer168 Hiking HST and income taxes? Ooof....The avg. CDN worker faces so much taxes already. I don't see that flying without massive backlash. I don't see prices of food dropping year over year at all.
@@sandyraymondlowewong9705 I can tell this would work extremely well just by your reaction. People won’t like it but you will see instant result because it will force people to save instead of spend.
@@Observer168 I don't know if it would force people to save. I can see people getting more credit since CDNS are so used to just borrow. I can also see if that happens, PM JT would print money to so called help people.
@@sandyraymondlowewong9705 South Korea did something similar with austerity measures during the Asian Financial crisis. People were forced to save when they had less money. There is always a limit to the amount of credit you can get otherwise everyone would just apply for a thousand credit cards and never work. There are shopaholics but many end up in bankruptcy because of debt.
It is ironic how much joy some on here take on ripping on people who have bought in the last 5 years and have variable.
What they’re forgetting is anyone on fixed has to renew too. My neighbour just renewed his previous 5 year fixed at 2.4 to 5.75…is he a greedy over leveraged idiot too? I don’t think so….when you are stress tested at 5.25% and then the Bank increases rates above the stress test in 9 months…who’s fault is that? A prudent buyer would’ve said okay I can afford payments at 5.25% versus my entry rate of 2ish% but then the Bank increases above that at the highest pace ever in history - don’t take joy in others suffering - this isn’t a fair outcome for anyone who holds a mortgage and was stress tested at 5.25% because the system told them that’s the ceiling they should be prepared to pay and the system chose to go above that level in a matter of months…that’s pretty unprecedented.
You can still get 5 year fixed at 5.25% so what’s the problem? Lock in your variable get a 5 year and all is good. Ohhhh wait it’s not about that is it. The speculation on condos, townhouses, dog houses don’t work with fixed rates does it? Anyone that complains is just a speculator and should just buck up and pay. Plain and simple.
Tell your banker speaker who predicted his 0 point hike to keep his mouth shut going forward!!
If they pause now..
Inflation will settle much higher than the 2% target.
BoC needs to get the rates to the level of the core cpi asap or else we pay the price later with stagflation and a depression. Those that are overleveraged in debt need to be sacrificed for the good of the whole.
Canadian's should not be expected to deteriorate their living standards via high inflation over a long duration.. Just to save the overleveraged and financially illiterate. It will still end up in a disaster.. Keep pushing off the recession and it will lead to depression.
Steve just doesn't want rates to go up because he is a real estate investor. Do you think he cares about families or those priced out of the housing market?
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this is not the last rate hike
@ Sugar123 they can lower interest rates tomorrow. Your discussion is insignificant. The are already raising motorization to 40 years from 25 years. This almost completely covers for the interest rate hikes?? They can do a lot.. They printed a lot of $. Prices of everything is way down. House prices going up soon.. sorry to be telling you life is good. You can be as negative as you want.. it just hurts you.
this looked interesting too ... Bubble? Canadian benchmark housing prices could fall to 4 or 5 hundred thousand ... ? Interesting comparisons? th-cam.com/video/eF5PCcnN93I/w-d-xo.html
Real-estate is Canada's too big to fail. If it comes down to sacrificing the currency, bond market or housing market, I wonder which they'll pick?
I think the order of importance is bond market, housing market and then currency.
But high inflation is the wildcard. Maybe this time around they'll sacrifice the housing market. Most people are liars and will always say they're being squeezed.
Anecdotally I have a coworker who's family income is well over 200k/yr. He's always crying how he has no money. But the reason is because he has a 1 million mortgage and a $$$$ leased luxury car, dropped over 15k on a couple of nice road bike an just generally has a low financial aptitude.
My guess is that 100% of employed Canadians making combined family income over 100k and over leveraged fall into this category. Liquidating assets or going bankrupt is a good way to punish them and take them out of the credit market for 7yrs.
Can't save housing if USA FED doesn't trend with TIff’s BOC. Spread will crush CAD. Probably create a “UK “ bond moment for Canada.
Hiking the HST and income taxes can also fight inflation. Let’s make everyone more poor. We will see rampant deflation for sure
1 last rate hike? LOL! More to come. Don't keep deluding yourself into a calm trap. Wake up and be ready for the fallout. Stop the head tricks and deal with reality.
The more I watch this segment, the more I LMAO. Expecting the CAD housing market to collapse. The FED is going to dictate BOC and Canadian government debt servicing costs. Canadians don’t realize how many of their fellow citizens are Ponzi schemer victims.
It’s funny to see a lot people just get angry when you are saying inflation peaked or central bank pivot. As a regular people, inflation peaked is a good news to everyone . Whoever not wanting lower inflation is poor one with no assets, they just want everything crash and wiped out so that they can start over and back on the game. 😂 unfortunately this is not gonna happen, they will stay poor if they continue to have this toxic mentality
Your mentality is the toxic one, families are just trying to afford a home and live a decent life.
@@donm2067 Yeah but even if you buy an asset right before a crash, if you hold it through the crash, it'll typically be worth more than when you bought it.
You can really tell who the renters are and feel “entitled” to owning a home.
Last rate hike for 2022. Plenty left for 23 and 24
Hiking the HST and income taxes can also fight inflation. Let’s make everyone more poor. We will see rampant deflation for sure.
@@Observer168 hiking interest rates only hurt people that borrowed way too much. For people that controlled/limited their borrowing to a decent level and save money it’s beneficial to them since they can make more money on conservative savings, and higher rates will stop/limit inflation within 12-18 months once interest rates are higher than the inflation rate.
Certainly raising sales tax will hurt everyone but an alternative is to just raise property taxes on investors that own 3 or more properties in the same province at the same time. Should be easy info to track since numerous US cities do that to tax the investors double or even triple the regular property tax rate so regular citizens that use their homes to live in don’t need their property taxes increased.
@@jmela1370 Their main goal is to control inflation rapidly. Setting a high HST would be much more effective. They have increased interest rates multiple times but inflation is still high.
Bahahahaha you were a perma bull until it started to crash. What a BStter
Get tp 10% MINIMUM
Delusional
Still recall when we were paying 18% on our mortgage! Years ago…..
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We might get a short pause in interest rates, they might even dip a bit early next year
But they are going to go up
We will see 50% interest rates and inflation will hit 600%
Welcome to your central bankers hyper inflationary depression
😂
Hahshs in nuclear war scenario.
Last? Hahahaha
Rates increased beyond expectations so they should come down before expected
A temporary 20% nation wide HST would be far more effective and less destructive. Some provinces already have a 15% HST. Every province should be paying the same amount.
This will also help decrease the country’s debt and help fund programs that are in desperate need of cash. I rather see my money go towards the medical system than going to the BOC. Guess who owns the BOC…. Most Canadians don’t even know! 😂
income tax was a war tax, nothing is more permanent than temporary, government can spend any amount of taxpayer's money with little benefit for taxpayers.
@@petermelnikov682 Yes but taxes are used to fund government programs. Many programs are way under funded. You need to wait 8 hrs at the hospital just to get stitches… the government is broke!
you are apparently a real communist. do you not see that the commies that take the money are completely incompetent and will just use funds for their own benefit. communism has not worked well and is the cause of this
@@Feedback4Utoday The government needs taxes to function. Canada is not a communist country and ranks very low in corruption. I would rather see my money go towards healthcare than the BOC. Waiting 8 hours at a hospital for stitches is really messed up. American companies are offer our best doctors and nurses more 50%-100% in salary. Government needs taxes to function properly unless we stop offering free education and healthcare.
It’s doesn’t matter from here that whether there will be any future rate hikes, what matters will be how long they keep these rates. The present rate are enough to break the back bone of flipping, presales, bidding wars etc etc. If they keep these normal rates for next 5-6 years this will be best for this country. Short term pain but long term gain.
Well Said
Agree! Right of the bat, real investors, which made a big portion of the-out of control buyers, got kicked out of the market as a result of the rate hike. No one can have positive cash flow by investing in single family homes with this level of interest rate. The central banks (specially the one in the G7 including Canada) have made a huge mistake by allowing interest rate to stay that low for that long. They are catching up now with unprecedented rate increase, which is a bit painful for many, but this is the medicine that we need at this point to put a break on the lawlessness/ out of control state of the housing market that we have seen in the last few years. Another hidden impact from the rapid increase price of housing that no is talking about is the societal negative impact; I can assure you that you will see more homeless people in the streets, more prostitutes in your neighborhood as a lot of parents will not be able to care for their daughters using average incomes so they'll have no choice but marrying them early or leave them to be pimped out as sugar daddy, also more law breakers to name a few. Meanwhile, government officials (who supposed to be the ones looking out for the average citizens) simply stay on the sidelines and let things run by real estate agents and real state board. I feel so bad for the new generation; they will suffer the most from this carnage.
They should have never done Quantitative easing. Its not fair for younger workers starting out. We pay older people handsome returns on investments on these overpriced houses