Quote:
Originally Posted by Johnny199r
http://https://www.bnnbloomberg.ca/c...ices-1.1905914
tl:dr - As a reaction to higher interest rates, banks changed the rules and now allow people to have mortgages for longer than 30 years and are also tacking on unpaid interest onto the mortgage's principal instead of paying full every month. This is creating a floor under home prices in Canada.
If banks didn't change the rules in response to recent rising interest rates, real estate prices likely would have continued downward, leaving overstretched homeowners in trouble, but provided more of an opportunity for young people/first-time home owners to enter the market.
In Canada, home owners are the golden goose. Gov't, banks, and any other entity you can think of will do everything in their power to keep home prices going up.
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I don't think banks are the issue. It's lack of supply. Canada needs immigrants, but there's no plan to housr all the new immigrants.
Prices will continue to rise, largely because there's no shortage of baby boomers willing to give their children massive cash gifts to assist their children in buying property.
We have both artificial supply and demand that detached prices from wages. If you don't earn 2-3x or more of the national wage average or have wealthy parents... Then you're just out of luck. That's the country we live in now.