Quote:
Originally Posted by photon
Why isn't there? Inmigration to the province hasn't really dropped off from what I'd last seen.
EDIT: Though I can't really remember last time I looked into it, it might have been 4-5 months ago.
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The main argument against the longer term prospects of the market relates to interest rates. Rates right now are as low as they will get. This has drawn a lot of people into the market. It has also altered the rent-vs-buy equation substantially. But the economics of buying a home on a 2.5% (variable) mortgage versus a more normal rate of 6% are quite dramatic. The interest-only cost of a $400,000 mortgage goes from $10,000 per year to $24000.
The question is, how long can rates stay this low? I wish I had the answer myself. After Japan's property bubble collapsed in the '90s, the bank rate there stayed low for years. The same may happen here.