Quote:
Originally Posted by blankall
This is true when the real estate levels are in line with the market. When you have things like foreign investors, generational wealth transfers, etc... the prices fall out of line with the actual market. The bidding wars then become based on who can/will put together the most capital up front. Detached housing is not being proportionally bought, even in Calgary, in relation to people's incomes. It's largely people inheriting large amounts of cash from their parents and people coming in from already more expensive markets that are driving the current boom.
It's not middle class families who are scrimping together down payments. These are the types of people who are affected the most by interest rates. These are also the types of people that "cooling" the market is supposed to help, but a massive negative affect of increasing interest rates is that these people get driven out of the market.
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Okay, you are referring to a specific subset of the market (and largely in Vancouver and Toronto), for which what you say is true.
For normal home buyers (i.e. most people), monthly costs matter a great deal.