Dabills wrote:
why will the houses increase in value DTC? the demand obviously isnt there anymore as you stated with your friends village style home. will it go up because you think real estate always go up?
As I stated, my friends can't sell because everyone who was in the market already jumped in Q1, Q2 2010. They listed late when all the prospective buyers already bought.
Canada immigrates more people than any other country. Immigration has been feeding the real estate market for years. Just look at the influence of China on British Columbia.
Immigrants come to Canada and buy homes. Especially in and around major cities. Immigrants can be wealthy or not. It doesn't matter. It's North American's who want to have a house for their immediate family only. Immigrants from other areas of the world have no problem living 2-3-4 families per house and all contributing to the mortgage/bills. For this reason, as long as Canada keeps immigrating people, they will want to buy houses.
Next..
Dabills wrote:
why will the houses increase in value DTC?
The economy is based on house prices going up. Right or wrong, this is the fact. Majority of people in North America have no savings other than their house equity. If house prices don't go up or at least remain, the economy will collapse. This is the primary reason for the meltdown of the world economy with the United States housing crisis. Every sector of the economy tanked because people in the states all of a sudden had less money than they did weeks before. The world won't let this happen again. You see, they pulled out all the stops to prevent a massive depression. Those stops are all gone now. Money.. interest rates... it's been done. Now they will regulate the hell out of the industry and use other measures to prevent it from happening again.
If you were around in the late 60s, my business teacher used to talk about how my parents generation made so much money on their homes -- not because of real estate values per say -- but because of high inflation rates. They all bought homes with big mortgages (probably around 30k at the time lol) and the inflation rate was so high that as each year passed, the value of a dollar was devalued and the money they owed on the house became less and less and less of their income.
We are poised for that to happen now. They usually raise interest rates to quash inflation. Inflation is on the up. They can't increase interest rates because it will kill the economy and investment. Precarious position they are in.
If inflation goes up, the governments are devaluing their debt (all that money they spent on the recovery) and anyone with long term debt such as mortgages will be devalued as well -- provided that our employers give us raises to match the inflation rate.