interested
Senior Member
Here you are. Straight from Horse's mouth.
BMO does not expect house (condo as well?) prices to drop in the next 24 months. BMO is financing low-rate mortrgages for 5 and 10 year terms. There was lot of talk on this thread, sometime back, that individuals who bought R/E with 5% down and low rates soon will have to face reality. Unable to afford their investment at higher mortgage rates -- soon to come -- will have to dump them triggering a downward spiral in prices. Now the same investors will be comfortable for the next 5/10 years. And that means only 1 thing -- no bubble bust. Individuals who stayed on the sidelines during the past 2/3 years are now gonna regret their decisions.
Ka1; I would refer you back to the post regarding C1 area in which listings are up12%; expired listings 18% and sales down 12%.
These are true hard numbers representing the downtown mainly condo market. Is this not in your view the sign that the tide is turning? I might suggest that the reason BMO is competitively seeking mortgages are as follows: stable income; downloading a lot of risk to CMHC, picking up market share. The article that marsh quotes from the globe and mail pints out that the banks are only interested that one can pay the mortgage, and not that you are going into indebted servitude to do it.
The point is that in the US and Europe, the massive loans the banks made to cover the real estate have jeapordized their well being. I would not conclude that BMO and our Canadian banks are beyond doing the same.
that said, you are right in one regard.....this may keep the party rolling longer, even if the wiser ones have left the party already. I remind you the expression: you can't pick the top nor the bottom...all you can try and do is get out at the right time or hold off buying at the wrong time. I appreciate this is talking more about the stock market but unfortunately as the marsh quote in the article shows, more and more people are treating homes as an investment rather than as a place to live and as such it risks starting to behave as any other investment rather than as the staple of providing shelter it had in the past. Accordingly, it likely will become much more volatile as an investment in the future.