What happen to Vancouver home owners if interest rates goes up?
I was watching an economic debate among the European countries on Friday(Oct 2nd). The topic was the question "when should the world consider exiting the stimulation package?" Well, the conclusion is that China and India is moving forward on their own with signs of economic improvement. The rest of the world is very much in different pace. Although US is the biggest economic driver in the world, the power is now shifting to China and India. It will balance out the power and it would be a good thing to the world politic.
Do we worry about interest rate hikes. Well, Since March,
The euro has jumped 21 percent against the dollar,
The Canadian dollar has gained 17 percent,
The British pound has risen 16 percent,
And the Japanese yen has climbed 11 percent.
Even though we might want to hike interest rates to control the high Canadian dollar as well as inflation, we cannot because of the US situation. The US cannot hike the rates due to the trillions dollars they have in debt and because their economy has not seen a signifcant recovery yet. Therefore, in my opinion, the interest rates will stay low for quite a while. I can't see the interest rate going up more than couple basis point difference.
I therefore, would not worry about high interest rates causing future foreclosures. Even with HST potentially coming next July, developers would have a marketing strategy reflect on their pricing. I know people bought into downtown presale at low $500 per sf in todays market. The sensitive price point is between 300k & 400k in Vancouver Condo market. If u can get one within that price range. You are just doing fine. I've known quite a few pre-sale projects going to come up for sale within the next few months. Should u be interested, pls call me at 604-412-5860 or email me at tinamak@tinamak.com. I'll put your name on my list & call u back when I get more solid confirmation.
Click here to the Podcast version for the above material in Cantonese
