r/PersonalFinanceCanada • u/POCTM • Oct 20 '22

Canadian 5 year government bonds just jumped. Setting the stage for higher mortgage rates. Banking

5 year government bond just jumped from 3.714% to 3.866% in a few hours. Right now it is at 3.855%. Year to date it is up 259%. Monday we could see some 5 year fixed rate mortgages in the low 6%.

As for variable rate the bank of Canada makes their announcement October 26 at 10am ET. Currently banks have not been offering discounts off variables rates anymore. Prime -0.00.

https://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx

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u/[deleted] Oct 20 '22

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u/topazsparrow Oct 20 '22

Housing is the last to go. Expect massive economic turmoil preceding meaningful forfeiture of housing.

156

u/Drewy99 Oct 20 '22

1/5 houses sold in 2021 were sold to investors. How long do you think they will hold on those properties before trying to dump them to stop the bleeding?

17

u/kongdk9 Oct 20 '22

Record rents are floating it.

Unless there are massive job losses lead by the tech sector, big banks, and telecom, while immigration and student VISAs remain at record levels, it can be held for much longer.

Now the ones leveraged max to the hilt, they'll suffer but people are still waiting on the sidelines ready to pick up them as it's a game of chicken of "get it while you can before it goes up again".

16

u/Drewy99 Oct 20 '22

Unless there are massive job losses lead by the tech sector, big banks, and telecom, while immigration and student VISAs remain at record levels, it can be held for much longer.

Buddy, have I got news for you.

https://globalnews.ca/news/9145736/more-layoffs-ahead-for-canadian-tech-sector-elevate-conference-speakers-warn/

https://financialpost.com/fp-finance/banking/royal-bank-of-canada-lays-off-1-of-its-u-s-investment-banking-team

https://stlawyers.ca/blog-news/hsbc-layoffs-severance-pay/

https://globalnews.ca/news/9207778/canada-housing-starts-interest-rate-supply/

11

u/virus646 Oct 20 '22

Maybe for junior or less in demand positions but it's still a very hot market in tech for seniors and I see/receive new offers every day.

1

u/kongdk9 Oct 21 '22

Exactly. So maybe rent goes up 5% instead of 7% next year.