Re:Bank of Canada raises its interest rate to 5%
by voisin on Wednesday July 12, 2023 @03:16PM
(#36700225)
Canadians can’t walk away from their mortgages the same way as Americans. Mortgages are recourse to all your assets.
Re:Bank of Canada raises its interest rate to 5%
by oliwarner on Wednesday July 12, 2023 @05:47PM
(#36702136)
Canadians can file for bankruptcy. That's essentially the at-scale risk of what we're talking about here.
The IMF says Canada is the highest risk market for this collapse right now too. It's going to be a rocky few years.
https://financialpost.com/news/imf-warns-canada-highest-risk...
Re:Bank of Canada raises its interest rate to 5%
by oliwarner on Wednesday July 12, 2023 @05:26PM
(#36701917)
Investment firms are already facing massive holes in their books as office space around the world goes unlet and devalues.
In my area we're already seeing people trying (and failing) to sell at reasonable prices. The average mortgage repayments are set to rise by £6kpa. It won't be afforded for long.
Yes, I'm sure someone will clean up, but it won't buoy prices and it'll only make the long term picture worse.
I think there's a good chance investment firms buy up everything. If people are walking away from their mortgages that means the properties can likely be bought below market rates, especially if they can do bulk or quick deals with banks.
As supply consolidates the market rates will keep going up, so the smart choice for anyone with a huge investment in the market is to just keep buying until they own everything, right? Don't let the market crash. Instead, prop it up until you own so much of it that you effectively make the rules and set the market rates.