Harbourwalk condos.Raise interest rates or cause house prices to plummet by 40%? According to a report released by the Canadian Center for Financial transactions and reporting Analysis (FINTRC), C $43.6 billion of funds from Asia alone entered Canada in 2020.Please Visit: harbourwalk condos to Get Your VVIP Registration Today!
And this statistical caliber does not include company-to-company, financial institutions to financial institutions, encrypted currency transactions, and individual transfers of no more than C $10,000. The actual amount of money transferred from Asia to Canada is expected to be steady over C $50 billion.
Considering the capacity and status of the Canadian financial market, the Canadian media believe that the vast majority of Asian capital entering Canada will eventually flow to the real estate market.
Therefore, real estate agency Dexter Realty pointed out in a report that the warm real estate market will continue to heat up, and the real best part is yet to come.
Brendon Ogmundson, chief economist of BC Provincial Real Estate Association (BCREA), pointed out that in February 2021, only 1.4% of residential transactions in BC province were bought by overseas buyers, accounting for as little as 0.56% of the total transaction volume. Once Canada opens its borders, the real estate market will usher in a strong increase in purchasing power.
Sotheby’s (Canada) International Real Estate Company report also shows that a large number of Canadian luxury home buyers are waiting for Canada to open its border, this part of the purchasing power is almost certain, just waiting for Canada to lift entry restrictions.
Dexter Realty stressed that Dawen Real Estate is not only a necessity for residents, but also has the function of capital safe haven and asset safe deposit box.
With almost no external force, house prices in the Greater Wen region and the Feisha Valley are booming, and once foreign funds and buyers re-enter Canada, there will be a second buying spree.
Of course, the above information is provided by institutions that support Canada and Dawen house prices will continue to rise. And the power to be bearish on Canadian house prices is also strong.
A few days ago, credit rating agency Fitch Ratings (Fitch) released a report that Canadian house prices are overvalued by 32%.
Adam Major, CEO of Zealty.ca, said more bluntly that at current highs, house prices will fall by at least 40% in the future!
Adam Major pointed out that the subprime mortgage crisis in the United States began when financial institutions lowered the loan threshold and interest rates to allow more people who could not afford to pay for their homes to enter the real estate market. The industry term is “Teaser Rate”, which can be translated into Chinese as temptation interest rate, which is equivalent to fishing bait.
Now, Canada is in a very similar situation, with many people getting real estate mortgages at an interest rate of about 1.5 per cent in 2020 and 2021, which is actually inverted to lenders compared to the fact that inflation is likely to reach more than 3 per cent.
Borrowing money to buy a house has become a means of financial management in the eyes of many people, but every cheap commodity secretly marks the real price.
With the end of the epidemic, the Bank of Canada will sooner or later return to the interest rate hike cycle, when homeowners who sign up for 25% of their loans will find that 1.5% of loan rates are likely to be 3.5% or higher.
Historical experience shows that Canadian mortgage rates were as high as 6% in 2007 and 3.5% in 2018-2019.
In fact, the judgment of most commercial banks is that future interest rates are likely to rebound to a range of 3% Murray 5%.
Adam Major said that when the loan interest rate rises from 1.5% to 3.5%, the actual monthly repayment will increase by 30%, that is, the original monthly repayment will increase from 3000 yuan to 3900 yuan; if the interest rate rises to 5.5%, the monthly repayment will increase to 4900 yuan.