Quote:
Originally Posted by _Q_
The last decade has seen historically low interest rates. The 2.1% fixed rate mortgage of the last 18 months is certainly not the norm. A family may be able to barely pay $4200/ month for their $1million home, how about when interest rates go up to 5 or 6 percent, or even higher?
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The BoC is going to be in a very interesting spot - never have Canadians had more debt. They are going to need to raise these interest rates significantly to combat inflation, but they are going to find themselves between a rock and a hard place. Interest rates won't be able to come up too quickly or they risk imploding the financial system. They will have to be comfortable with a moderate increase to interest rates and higher inflation rates. My two cents at least.
The stress tests have been doing their jobs and should cushion real estate enough not to see massive corrections. Foreign investment is agnostic to the interest rate increase in Canada as well.
I think you will be sitting in the corner waiting for this so called correction to happen for a while yet if ever...