Quote:
Originally Posted by accord1999
Using the Teranet house price index, the Calgary market had already peaked on August 2007 as higher interest rates began to have an impact. At its low, the Calgary market fell 17.6% and the 2007 peak was only surpassed early this year.
But oil prices were still going up in that time frame and didn't peak until July 2008. So while oil prices are important, I would say interest rates are even more so. The downturn would have been worse without the historically low mortgage rates at that time.
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Exactly. The drop in oil prices in the 80s had such a dramtic effect on house prices because people were paying 20% interest on their mortgages. More recent drops in prices in the last 6 years havn't had such a dramatic effect given people are paying less than a quarter of that.