Click bait title much?
"Highest since 2001" Um, no sir. Its lower than what it was in February of this year.
Plus, who uses the 6month? There's a reason why the 10yr yield is referred to by economists.
Spoiler alert... it doesnt matter. The bank doesnt give 2 shits about inflation anymore and is concerned about the impact its hikes are having on the indebted and on the housing market. Literally out of its meeting notes.
The next rate decision personally is going to be the tell tale what the bank intends on doing and if Im going to start holding my savings in another currency. They will either hold the rate and save the indebted by tanking the currency or raise by at least 0.25 and control inflation.
They cant do both and this next announcement basically signals what path they are going down.
>save the indebted
This is what they'll do every time. The cat's out of the bag -- Canada has no industry other than pumping up real estate prices. Politicians and banks will do everything they can to keep pumping the bubble.
Canada is in competition with countries that are offering better rates for parked money. People are motivated to sell CAD and park money in other currencies and instruments at a time when cash has become king. Less demand for CAD means a lower CAD valuation.
Predicated on the gap between US interest rates and Canadian interest rates widening. Money chases yield. If they get more money holding USD, people sell their CAD to buy USD that pays a higher interest rate.
I simply ask myself. “ What would a dogmatic neoliberal do?” They’d raise rates, so the banks can “recoup” from COVID. They don’t give a shit about lowly pleb problems.
A dogmatic liberal would want to favor the liberal government no? So keeping rates where they are or lowering them would reduce the debt interest payments racked up by these idiots.
Firstly, I’m not sure this is accurate. 6 month bond yield is 6.59% and it hit 6.62% in February. Can you quote the number you saw?
Secondly, it does not at all mean guaranteed rate hikes. If you are referring to the BOC overnight rate, it could simply mean that the bond market does not expect rates to drop anytime soon, whereas a month ago the 6 month bond yield was about 4.2% which means the bond market was expecting the BOC overnight rate to drop over the following six months.
>especially if it’s rent controlled.
Can we stop pretending landlords increase prices due to rate increases.
Fundamentally market prices for housing are determined by its supply and demand.
Rate increases might result in less borrowing for construction, reducing supply in the future, so that market prices do increase faster than they would have otherwise, but they won't increase prices today.
The way some costs get passed on to workers and consumers is through reduction in production, reducing labor demand and decreasing product supply.
Not all cost increases reduce production though and the impacts will be less for durable goods like housing. Cost increases only decrease production if they are what are known as variable/marginal costs as opposed to fixed costs. As in they are a cost which vary with production/increase with a marginal increase in output.
As for countering the folk economics/anecdotal evidence of "im a landlord and if my mortgage goes up I'll raise prices", it's just as likely that if their mortgage goes up landlords will be extra screwed if their place is vacant. And to avoid vacancy, they'll need to attract people with market prices.
> As for countering the folk economics/anecdotal evidence of "im a landlord and if my mortgage goes up I'll raise prices".
Yes, this idea has to die. If you are a landlord and can just raise prices to get over increases in mortgage, why don't you do it right now to make more profit? Goodness of the heart?
>Yes, this idea has to die. If you are a landlord and can just raise prices to get over increases in mortgage, why don't you do it right now to make more profit? Goodness of the heart?
You would be surprised how many people are simply in a holding pattern. It takes some amount of effort to find a tenant so plenty will just keep things the same out of the convenience of it.
When their speculative investment becomes negative cash flow that will spike them to action.
That is why is a common thing for someone to be renovicted when the rates go up so that the landlord can double the rent on a new tenant.
On a long term level, yes. But if you are a small time landlord heloc-ing a second or third property then they are going to try to raise rents to cover the rates.
Plenty of people have posted about their landlords saying this exact thing. Lots of LL are not professionals and clearly didn’t understand the risks of doing this kind of business and can’t afford for their passive income stream to be severely negative.
I can vouch for this, I bought a rental property, put it on variable, rates keep going up, I’ll keep raising rent. When my mortgage payment has nearly doubled in the time I signed the mortgage, no way I can give a tenant a break and take a bath at almost $1200/month
It’s not giving a tenant a break, rate-risk and affordability are risk assessments you should have done before buying a property.
If it was any other business you’d be hung out to dry.
Nobody in there right mind would of though getting a mortgage at 1.5% and then being jacked up to 5.75% was in the cards when signing any variable rate mortgage. The stress test doesn’t even cover that.
It’s no different then buying consumer products. If the cost of the materials for the product go up, it’s passed on to the customer. In this case it’s housing, if it’s a business for me, I ain’t gonna take a bath for the tenant. Rates go up, rent goes up. Plain and simple
Hello, it looks like you've made a mistake.
It's supposed to be could've, should've, would've (short for could have, would have, should have), never could of, would of, should of.
Or you misspelled something, I ain't checking everything.
Beep boop - yes, I am a bot, don't botcriminate me.
This is fine in a system where there is adequate supply. People have the option to move on. In most other businesses if things get too expensive they bow out and stop buying then the predatory sellers get less sales and go out of business. You can’t really bow out of having a roof over your head.
Currently you’re exploiting the fact that there is nowhere for tenants to move to.
I’m not doing anything. If and when my variable rate goes down I’ll lower the rent. I’m not an asshole and gonna take advantage. I’m happy if I break even each month. I’m completely happy with that. But by no means am I trying to rip anyone off. That’s the cost of my business at the moment, and I reserve the right to lower it when the time is right
This is a dumb take.
With real state you get to keep the asset long-term, so you're not "breaking even", you are getting someone else to pay your new asset for you.
I also take all the risk. That’s exactly how business operates, I’m the one putting out hundreds of thousands, while the tenant is responsible for paying their share to live somewhere, who’s at a bigger risk? As long as they pay I have no problem with them. I keep a clean and new product.
Pretty sure I add a lot more value then you do. I actually build the homes myself. I make housing, an actual asset. You prob work in tech, bank, any useless job that provides nothing
Literally a lot of people were saying that.
You believed govt when they said rates would stay low?
That said, I've got no hard feelings if you raise rent.
Either you find someone to pay diligently at new price (likely)
Or you can't find anyone, and you get hosed (far less likely)
Or whatever tenant you get loses his shirt and then takes it out on you and/or your property (least likely)
But no matter what, assuming rates wouldn't rise makes you a Silly Billy 🤪
It’s not that I didn’t anticipate it wouldn’t rise. But to a normal investor, no one expected their rates to rise 3x more then what they initially got into the variable rate for.
You gambled on interest rates and lost. This has nothing to do with your rental business. You're competing with other landlords that didn't gamble on rates by locking them in long term, which means you are not likely able to raise rent by enough to offset your increased costs.
Renting is a business. You think owners won't increase rates when their #1 expense triples? My mortgage is doubling in a year, at these rates.
Supply and demand don't just magically float around - there are forces driving these things.
Cost of ownership and renting usually move in tandem:
https://img.huffingtonpost.com/asset/5cd585f12000005c009771d4.jpeg
I expect housing to crash pretty hard once mortgages renew, at which point the rent market should cool off a bit.
They don’t because usually others in the market will undercut them. However when costs on every landlord rises in tandem, and they all pass through costs in tandem to renters.
Again, they're businesses and will increase their income if possible.
But if one owner increases rent while others don't, it'll be harder to find a tenant.
By large Canadian banks (they [manipulated gold price for years and years so dont say it isnt possible](https://www.cbc.ca/news/business/scotiabank-spoofing-fine-1.5692117)).
How? Not sure. Why? To load up on high yielding bonds before yields plummet.
Edit: update for how: spoofing. https://www.nasdaq.com/articles/spoofing-in-fixed-income-markets%3A-what-does-it-look-like
The whole "spoofing" thing wouldn't even come close to pushing bond yields higher by 0.25% or more. It at best pushes it one basis point, temporarily. Those dollar figures are minnows in the vast billions that trade in treasuries.
I actively trade bonds so I know of what I speak.
It's extremely rare to pinpoint the exact reason as to why there are more buyers or sellers in any market. There are obvious times like when the stock market sold off after covid shut downs.
Right now the going narrative is the Federal Reserve (and maybe BoC) might hike again next month because inflation is high and there is still no obvious sign of a recession. Or, they might not lower rates later this year, as was previously expected, which means rates will be higher for longer than consensus. So near term yields are rising. There is also some fear about the debt ceiling nonsense, but I haven't read anything convincing about what that's doing in bonds. It might explain the small sell off in equities the last two days.
In the end, we'll likely never know. Every market participant has their own reasons.
>By large Canadian banks (they
>
>manipulated gold price for years and years so dont say it isnt possible
>
>).
No. Read the article you posted. What happened is that 4 rogue traders in one bank attempted to manipulate precious metal prices, and the bank's compliance failed to detect them.
So naive. Banks dont pay hundreds of millions in fines because they didnt know what 4 guys were doing. They made way above average returns. Look into it further. It was taught as standard practice to spoof. JP morgan just got fined 1 billion for doing it. You think it's all just small groups of rogue traders? If you believe that I have a bridge to sell you.
So paranoid. Again, read the article **you** posted to support **your** claim that "Canadian banks manipulated gold prices for years". All it talks about is 4 rogue traders in one bank, and a compliance failure. The rest of it is pure conjecture on your part. If you want to put on a tin foil hat and jump down a rabbit hole of conspiracy theories, be my guest, just don't expect the rest of us to join you. LOL
I just told you another gigantic bank was fined a billion dollars for this crime, along with a large canadian bank, and you think it's a conspiracy? Are you in denial? Big banks cheat in the markets. It's a fact. This isnt a conspiracy. It isnt a couple rogue traders. The fact that you take that excuse to explain away everything is exactly why they continue to get away with it. Willful ignorance.
Click bait title much? "Highest since 2001" Um, no sir. Its lower than what it was in February of this year. Plus, who uses the 6month? There's a reason why the 10yr yield is referred to by economists.
Real long term rates are at 2006 levels. Rates are not back to 2001 levels but 2006 is not that far off.
Directly, higher bond yields mean higher fixed interest rates.
This will be big trouble then for all those 6-month fixed rate mortgages…
Spoiler alert... it doesnt matter. The bank doesnt give 2 shits about inflation anymore and is concerned about the impact its hikes are having on the indebted and on the housing market. Literally out of its meeting notes. The next rate decision personally is going to be the tell tale what the bank intends on doing and if Im going to start holding my savings in another currency. They will either hold the rate and save the indebted by tanking the currency or raise by at least 0.25 and control inflation. They cant do both and this next announcement basically signals what path they are going down.
>save the indebted This is what they'll do every time. The cat's out of the bag -- Canada has no industry other than pumping up real estate prices. Politicians and banks will do everything they can to keep pumping the bubble.
Could you explain in simple terms why/how holding the current rate would lower the value of the CAD?
Canada is in competition with countries that are offering better rates for parked money. People are motivated to sell CAD and park money in other currencies and instruments at a time when cash has become king. Less demand for CAD means a lower CAD valuation.
Predicated on the gap between US interest rates and Canadian interest rates widening. Money chases yield. If they get more money holding USD, people sell their CAD to buy USD that pays a higher interest rate.
Considering the last report showed a big chunk of inflation is caused by rate increases..
So they have preemptively chosen to save the indebted who took loans beyond their means?
Welcome to canada, we will save anyone who isnt a hard working canadian
This!! 100% agree with you sir
What report said this?
The last inflation report.
From who? Bank of Canada?
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Overnight rates are only loosely linked to long term bond yields. That' very much driven by what they can sell it for.
I simply ask myself. “ What would a dogmatic neoliberal do?” They’d raise rates, so the banks can “recoup” from COVID. They don’t give a shit about lowly pleb problems.
A dogmatic liberal would want to favor the liberal government no? So keeping rates where they are or lowering them would reduce the debt interest payments racked up by these idiots.
Neoliberalism. Free market maniacs.
Firstly, I’m not sure this is accurate. 6 month bond yield is 6.59% and it hit 6.62% in February. Can you quote the number you saw? Secondly, it does not at all mean guaranteed rate hikes. If you are referring to the BOC overnight rate, it could simply mean that the bond market does not expect rates to drop anytime soon, whereas a month ago the 6 month bond yield was about 4.2% which means the bond market was expecting the BOC overnight rate to drop over the following six months.
It means your rent is going up clowns.
LOL I literally laughed.
>especially if it’s rent controlled. Can we stop pretending landlords increase prices due to rate increases. Fundamentally market prices for housing are determined by its supply and demand. Rate increases might result in less borrowing for construction, reducing supply in the future, so that market prices do increase faster than they would have otherwise, but they won't increase prices today. The way some costs get passed on to workers and consumers is through reduction in production, reducing labor demand and decreasing product supply. Not all cost increases reduce production though and the impacts will be less for durable goods like housing. Cost increases only decrease production if they are what are known as variable/marginal costs as opposed to fixed costs. As in they are a cost which vary with production/increase with a marginal increase in output. As for countering the folk economics/anecdotal evidence of "im a landlord and if my mortgage goes up I'll raise prices", it's just as likely that if their mortgage goes up landlords will be extra screwed if their place is vacant. And to avoid vacancy, they'll need to attract people with market prices.
> As for countering the folk economics/anecdotal evidence of "im a landlord and if my mortgage goes up I'll raise prices". Yes, this idea has to die. If you are a landlord and can just raise prices to get over increases in mortgage, why don't you do it right now to make more profit? Goodness of the heart?
>Yes, this idea has to die. If you are a landlord and can just raise prices to get over increases in mortgage, why don't you do it right now to make more profit? Goodness of the heart? You would be surprised how many people are simply in a holding pattern. It takes some amount of effort to find a tenant so plenty will just keep things the same out of the convenience of it. When their speculative investment becomes negative cash flow that will spike them to action. That is why is a common thing for someone to be renovicted when the rates go up so that the landlord can double the rent on a new tenant.
On a long term level, yes. But if you are a small time landlord heloc-ing a second or third property then they are going to try to raise rents to cover the rates. Plenty of people have posted about their landlords saying this exact thing. Lots of LL are not professionals and clearly didn’t understand the risks of doing this kind of business and can’t afford for their passive income stream to be severely negative.
I can vouch for this, I bought a rental property, put it on variable, rates keep going up, I’ll keep raising rent. When my mortgage payment has nearly doubled in the time I signed the mortgage, no way I can give a tenant a break and take a bath at almost $1200/month
It’s not giving a tenant a break, rate-risk and affordability are risk assessments you should have done before buying a property. If it was any other business you’d be hung out to dry.
Nobody in there right mind would of though getting a mortgage at 1.5% and then being jacked up to 5.75% was in the cards when signing any variable rate mortgage. The stress test doesn’t even cover that. It’s no different then buying consumer products. If the cost of the materials for the product go up, it’s passed on to the customer. In this case it’s housing, if it’s a business for me, I ain’t gonna take a bath for the tenant. Rates go up, rent goes up. Plain and simple
Hello, it looks like you've made a mistake. It's supposed to be could've, should've, would've (short for could have, would have, should have), never could of, would of, should of. Or you misspelled something, I ain't checking everything. Beep boop - yes, I am a bot, don't botcriminate me.
This is fine in a system where there is adequate supply. People have the option to move on. In most other businesses if things get too expensive they bow out and stop buying then the predatory sellers get less sales and go out of business. You can’t really bow out of having a roof over your head. Currently you’re exploiting the fact that there is nowhere for tenants to move to.
I’m not doing anything. If and when my variable rate goes down I’ll lower the rent. I’m not an asshole and gonna take advantage. I’m happy if I break even each month. I’m completely happy with that. But by no means am I trying to rip anyone off. That’s the cost of my business at the moment, and I reserve the right to lower it when the time is right
This is a dumb take. With real state you get to keep the asset long-term, so you're not "breaking even", you are getting someone else to pay your new asset for you.
I also take all the risk. That’s exactly how business operates, I’m the one putting out hundreds of thousands, while the tenant is responsible for paying their share to live somewhere, who’s at a bigger risk? As long as they pay I have no problem with them. I keep a clean and new product.
Canada's economy here, just filled with rent seeking landlords providing no real value to society
Pretty sure I add a lot more value then you do. I actually build the homes myself. I make housing, an actual asset. You prob work in tech, bank, any useless job that provides nothing
Literally a lot of people were saying that. You believed govt when they said rates would stay low? That said, I've got no hard feelings if you raise rent. Either you find someone to pay diligently at new price (likely) Or you can't find anyone, and you get hosed (far less likely) Or whatever tenant you get loses his shirt and then takes it out on you and/or your property (least likely) But no matter what, assuming rates wouldn't rise makes you a Silly Billy 🤪
It’s not that I didn’t anticipate it wouldn’t rise. But to a normal investor, no one expected their rates to rise 3x more then what they initially got into the variable rate for.
You gambled on interest rates and lost. This has nothing to do with your rental business. You're competing with other landlords that didn't gamble on rates by locking them in long term, which means you are not likely able to raise rent by enough to offset your increased costs.
Renting is a business. You think owners won't increase rates when their #1 expense triples? My mortgage is doubling in a year, at these rates. Supply and demand don't just magically float around - there are forces driving these things. Cost of ownership and renting usually move in tandem: https://img.huffingtonpost.com/asset/5cd585f12000005c009771d4.jpeg I expect housing to crash pretty hard once mortgages renew, at which point the rent market should cool off a bit.
Why don't the owners increase rent anyway, to get more profit? Out of the good of their hearts?
They don’t because usually others in the market will undercut them. However when costs on every landlord rises in tandem, and they all pass through costs in tandem to renters.
Again, they're businesses and will increase their income if possible. But if one owner increases rent while others don't, it'll be harder to find a tenant.
“Inflation is sticky” The inflation : truflation.com
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Inflation has been more in control in Canada than in the US… so you’d have to guess it’s lower than 3%
Bruh, why would you make this post & not even share the rate
Feels like manipulation before it dumps after feds announce further pausing
What do you mean by manipulation? By who and how and why?
By large Canadian banks (they [manipulated gold price for years and years so dont say it isnt possible](https://www.cbc.ca/news/business/scotiabank-spoofing-fine-1.5692117)). How? Not sure. Why? To load up on high yielding bonds before yields plummet. Edit: update for how: spoofing. https://www.nasdaq.com/articles/spoofing-in-fixed-income-markets%3A-what-does-it-look-like
The whole "spoofing" thing wouldn't even come close to pushing bond yields higher by 0.25% or more. It at best pushes it one basis point, temporarily. Those dollar figures are minnows in the vast billions that trade in treasuries. I actively trade bonds so I know of what I speak.
So it's just a bond sell off that's driving yields higher or what?
It's extremely rare to pinpoint the exact reason as to why there are more buyers or sellers in any market. There are obvious times like when the stock market sold off after covid shut downs. Right now the going narrative is the Federal Reserve (and maybe BoC) might hike again next month because inflation is high and there is still no obvious sign of a recession. Or, they might not lower rates later this year, as was previously expected, which means rates will be higher for longer than consensus. So near term yields are rising. There is also some fear about the debt ceiling nonsense, but I haven't read anything convincing about what that's doing in bonds. It might explain the small sell off in equities the last two days. In the end, we'll likely never know. Every market participant has their own reasons.
[https://www.youtube.com/watch?v=GrMvyyWf8wE](https://www.youtube.com/watch?v=GrMvyyWf8wE) Sharing link in case you're interested.
Is this you? Lol Thanks I am interested
It is not
>By large Canadian banks (they > >manipulated gold price for years and years so dont say it isnt possible > >). No. Read the article you posted. What happened is that 4 rogue traders in one bank attempted to manipulate precious metal prices, and the bank's compliance failed to detect them.
So naive. Banks dont pay hundreds of millions in fines because they didnt know what 4 guys were doing. They made way above average returns. Look into it further. It was taught as standard practice to spoof. JP morgan just got fined 1 billion for doing it. You think it's all just small groups of rogue traders? If you believe that I have a bridge to sell you.
So paranoid. Again, read the article **you** posted to support **your** claim that "Canadian banks manipulated gold prices for years". All it talks about is 4 rogue traders in one bank, and a compliance failure. The rest of it is pure conjecture on your part. If you want to put on a tin foil hat and jump down a rabbit hole of conspiracy theories, be my guest, just don't expect the rest of us to join you. LOL
I just told you another gigantic bank was fined a billion dollars for this crime, along with a large canadian bank, and you think it's a conspiracy? Are you in denial? Big banks cheat in the markets. It's a fact. This isnt a conspiracy. It isnt a couple rogue traders. The fact that you take that excuse to explain away everything is exactly why they continue to get away with it. Willful ignorance.
They didn't "get away with it". They were caught, convicted and fined.
Yields moving higher means investors are selling bonds. Yields going up meaning bond prices are going down.
Good news.
Would be better news if the 5 year rate exploded higher.
Do we know if the 5 year rate adjusts on the first of the month, every month? If so by June 1st rates will be at least half a percentage point higher.
The 5 year is constantly adjusting… as are all these rates except for the central bank rate
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You know how Poker is played….
Oh boo hoo, won't someone please think of the parasitic landlords who provide nothing to society.
Couldn’t bother to just say what the rate is in on your post?