Bank of Canada predicts a major correction in Housing (and other asset) prices

[OliverHeldens]

https://twitter.com/MarioNawfal/stat...55326986313734


"Some indicators of financial stress have risen. At the same time, the valuations of some financial assets appear to have become stretched.

This could increase the risk of a sharp correction that could generate system-wide stress.

The recent rise in the use of leverage in non-bank financial institutions could amplify the effects of such a correction.”

Canadian houscels on absolute nuclear suicide watch. I'd recommend selling now and taking the gains that still exist, and moving to the US and getting away from the Cold while you still can.

[blueberryboy]

Lmao at this fear mongering bs

A house 2 doors down from my parents house recently sold for like 100k + over in the span of a couple days

https://www.google.com/amp/s/www.cbc.ca/amp/1.7163761

[OliverHeldens]

Lmao at this fear mongering bs

A house 2 doors down from my parents house recently sold for like 100k + over in the span of a couple days

https://www.google.com/amp/s/www.cbc.ca/amp/1.7163761

Exactly. Now is the time to sell.

[WoofieNugget]

I don't think houses are going to drop significantly, but shoebox condos are starting to tank even though sellers seem to be hanging on for dear life. Houses are still considered valuable so can remain highly priced, although the amount of people that can afford them is dropping monthly. Plus once the renewals start pouring in between this year and 2027, there's a lot of people who are going to be pooched.

When everything is already expensive, an extra $1000-2000 of mortgage payment is impossible to make up unless you're more than 10 years into your mortgage already.

Everyone is saying BOC needs to reduce interest, but they literally can't - and shouldn't, honestly - people need to get used to the new normal of 4-6% interest (at a minimum) and suck up the fact they got FOMO and overpaid for assets all over the place.

"During this time, the pool of potential homebuyers grew through robust population growth, increased savings and higher incomes," the report said.

That report is by the CMHC, of course they are going to say house prices will increase. And it's a pipe dream that people are getting higher incomes and increased savings, that's a joke. The only truth is that there's a fresh flood of immigrants who don't mind combining four incomes to afford a house and moving twelve people into a three bedroom.

[ScrillaIsBake]

Houses won't drop much, condos will tho since nobody wants to own a fooking condo.

[blueberryboy]

Houses won't drop much, condos will tho since nobody wants to own a fooking condo.

Still condos going hot in my area

It's the location more - so , not the type of dwelling. Condos still appeal to a wide range of ppl

[Destor]

Here’s the full BoC report rather than a tiny snippet

https://www.bankofcanada.ca/2024/05/...y-report-2024/

Many of these conditions are shared between the US and Canada I’m sure. However, I’d be wary of rising taxes in the US with the government debt/deficit running at such a crazy clip — something is gonna need to give, and it will likely be in the form of higher taxes across the population.

[FAPhaggot]

The financial stress of rolling a 1% note over into a 5% note, in a time of negative real wage growth, is going to be severe.

[chalup]

My house is worth almost 3x its price from 2016, im extremely tempted to sell but on the other hand buying is just as brutal unless I can find a place for a year+

[OliverHeldens]

My house is worth almost 3x its price from 2016, im extremely tempted to sell but on the other hand buying is just as brutal unless I can find a place for a year+

Sell in Canada. Buy in Miami.

[OliverHeldens]

Here’s the full BoC report rather than a tiny snippet

https://www.bankofcanada.ca/2024/05/...y-report-2024/

Many of these conditions are shared between the US and Canada I’m sure. However, I’d be wary of rising taxes in the US with the government debt/deficit running at such a crazy clip — something is gonna need to give, and it will likely be in the form of higher taxes across the population.

Higher taxes also decrease economic output. None of this is good for housing prices.

They will raise taxes on the wealthy, and the wealthy will find ways to shelter. So the tax burden will then be places on the middle class, who then will decrease spending accordingly.

[Destor]

The government banks have a lot of policy rate easing they can do though if something bad happens in the market, that’s the beauty of not cutting anything yet. If and when something does happen, they can cut the policy rate to shore things up.

[OliverHeldens]

The government banks have a lot of policy rate easing they can do though if something bad happens in the market, that’s the beauty of not cutting anything yet. If and when something does happen, they can cut the policy rate to shore things up.

This is true, but usually by the time data is bad enough to force them to cut rates the damage is already done. Obviously they can make a correction shallower though.

[Anachron]

Just LOL @ beavercels srs.

[MEDITATE]

you seriously believe a twitter post? brah...


son , im disappoint

[MountainLion84]

Like others have said…. Maybe poverty 1br Condos

People who own real Real Estate like detached houses on prime land have nothing to worry about.

Pajeet and his family of 20 are looking for those rare big houses to move into

[SaltyDog920]

Exactly. Now is the time to sell.

I thought March '22 was the time to sell and the 30% correction would follow shortly after that.

[blueberryboy]

Like others have said…. Maybe poverty 1br Condos

People who own real Real Estate like detached houses on prime land have nothing to worry about.

Pajeet and his family of 20 are looking for those rare big houses to move into

Even condos in a good central location close to amenities aren't going down bro

[kusok]

And?

[yewotm8]

Housing prices will go down when they:

Stop trying to bring in a million Pajeets per year

Stop allowing foreign investment so Chinese rich people don't use Canadian housing as a way to hide assets from the CCP

Stop preventing builders from building houses. The amount of red tape and bullchit you need to go through to build a house on land you own is insane and it's clear they don't really want many new homes built despite the public demand

They can't just "predict" the price down when all of the factors driving it high are still there and accelerating

[Destor]

House prices across the board are doing nothing but going up in Alberta

But we’re still a loooong ways off from Ontario and BC, still a lot of room to go up if the conditions align

[TryingMen]

Bank of Canada?

This is like car advice from a female mechanic

[LogicalLifts]

Yes, a major 'correction'.

The *haves* will ensure that the 'correction' plebs hope for doesn't happen. Is that not yet clear?

[OliverHeldens]

Yes, a major 'correction'.

The *haves* will ensure that the 'correction' plebs hope for doesn't happen. Is that not yet clear?

They'll try. But can't make it last forever.