Quote:
Originally Posted by blankall
So the young family should just throw caution to the wind and take on a half million dollar debt that they can't possibly afford to maintain unless the interest rates stay the way they are? And they won't go back to historical norms....ever? This basically strips the BoC of their power to regulate the economy.
The fact that our economy is dependent on out of control housing prices, foreign investment, free borrowing, etc... is ridiculous. What a mess.
The whole system also horribly favors high income earners and children of the rich. Perhaps the median family in Calgary can afford the median house, but the wag gap is growing substantially. What about the social worker earning $20/hr? What do they afford?
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This is where we are at. The BoC really can't raise rates beyond 3-5% without causing a huge drag on consumer spending. Best they can hope for is flat home prices for a decade so wages and real incomes catch up. Anyone in the bottom 40% is going to be hard pressed to afford a home in a major metro area country wide.