m city 5 condos prices.Real estate speculation group Hold no longer live? The governor of the Bank of Canada said a number of indicators showed that Canada’s economy was growing strongly this year and that the previous policy of stimulating growth with low interest rates had fulfilled its historical mission.Please Visit: m city 5 condos prices to Get Your VVIP Registration Today!
The central bank is confident about the continued growth of the Canadian economy. The central bank forecasts that Canada’s gross domestic product will grow by 2.8% this year, up from the 2.6% forecast in April.
In recent years, Canadian house prices have gone crazy: Canadian house prices have soared to the second place in the world in terms of price-to-income ratio, and Canada has become one of the largest bubble markets in the world by rent-to-price ratio. In May this year, house prices in Vancouver hit another record high, and all kinds of home prices broke through record highs, confirming the title of the biggest real estate bubble in history.
For a long time, Canada’s low interest rates have become a big fat in the eyes of overseas real estate speculators. Overseas real estate speculation groups swept through Canada, leading to a sharp rise in Canadian house prices. In view of Canada’s high housing prices, many locals believe that Chinese real estate speculation groups are the “culprit” of Canada’s skyrocketing house prices.
The interest rate hike by the Bank of Canada means that years of low-cost borrowing may be coming to an end. Although real estate is not mentioned in the interest rate hike statement, the interest rate hike will seriously dampen the enthusiasm of Canadian home buyers, resulting in a sharp fall in house prices.
The Canadian people unkindly threw this pot to the Chinese real estate speculation group, but they also have to admit that the rising house prices in Canada do have the power of the Chinese real estate speculation group.
According to statistics, from 2010 to 2015, more than US $90 billion of Chinese capital flowed into Canadian real estate. By 2016, 33% of Vancouver real estate was foreign-owned, and 19% of Canadian real estate was foreign-funded. The continued inflow of money has pushed up house prices, which rose by as much as 30% in Vancouver in May 2016 over the previous year and 15% in Toronto, according to the Bank of Canada.
The Fed’s rate hike is negative for risky assets such as the stock market and the property market. Then Canada has raised interest rates, and the Chinese real estate speculation group has suffered heavy losses!
Canada’s interest rate hike is a wind-oriented event that marks the beginning of the process of currency normalization in big countries other than the United States. After raising interest rates, the Canadian dollar was boosted by more than 200 points all the way!
Looking back at history, after the 2008 financial crisis, major central banks began to cut interest rates, even the emergence of negative interest rate monetary policy. In the case of currency devaluation and interest rate cuts, a large number of assets poured into the gold market to hedge, and the price of gold rose to an all-time high. But will monetary policy be endlessly abnormal? The root of banknote lies in the credit of the country, and the embodiment of national credit lies in the purchasing power of banknotes. If a banknote continues to depreciate or its purchasing power decreases, people will choose to abandon banknotes, which will shake the stability of the country. So abnormal currency normality will end sooner or later. When the currency normalizes, the wisest thing to do is to invest in a strong currency with higher interest rates, and the safe-haven demand for gold will fall rapidly.
The Bank of Canada’s policy of raising interest rates can serve as a bellwether for monetary normalisation, proving good expectations for the global economic outlook and hitting gold prices in terms of exchange rates.