Excuse me, those ain't your bugs.
You can eat all the electricity that solar panels make at midnight on the first day of winter.
You can eat all the electricity that solar panels make at midnight on the first day of winter.
Joking aside, a big part of what's going on right now is likely related to housing. Housing in Canada has been insane for many years, but has gotten particularly insane in the last five or so. During the pandemic, the price of a single family home across the country was over $800,000. Now that is in canuckistani kopecs, but even in freedom dollars that's a lot of money to live in the hinterlands. Toronto's been over a million for many years, and Vancouver has been over 2 million for many years. By the time you start talking about that kind of money, it doesn't matter whether you're talking kopecs or freedom bucks.
So another thing to understand about Canada is that mortgage interest terms are extremely short. In the US you can get a 30 year mortgage with a fixed rate, in Canada and overwhelming majority of mortgages are 5-years or less.
So if you go back 5 years, interest rates were quite low. The lowest interest rates ever were four years ago during the peak of covid. So you have these people who bought million dollar houses with a 5-year fixed or 5 year variable rate mortgage, and now they need to renew what was 2% at 5%. Those mortgages are rolling over. When you're dealing with such a large mortgage increasing in interest rates that much, suddenly people just can't afford it anymore.
It will be really bad over the next 2 years, because by then 92% of all mortgages will have flipped over, a lot of variable rate mortgages that had 100 year amortization to keep the payments manageable will be reset back to acceptable amortizations, and the process of people using up their credit to stay afloat which means a lot of people will take some time to reach the end point.
I really think this is just beginning.
So another thing to understand about Canada is that mortgage interest terms are extremely short. In the US you can get a 30 year mortgage with a fixed rate, in Canada and overwhelming majority of mortgages are 5-years or less.
So if you go back 5 years, interest rates were quite low. The lowest interest rates ever were four years ago during the peak of covid. So you have these people who bought million dollar houses with a 5-year fixed or 5 year variable rate mortgage, and now they need to renew what was 2% at 5%. Those mortgages are rolling over. When you're dealing with such a large mortgage increasing in interest rates that much, suddenly people just can't afford it anymore.
It will be really bad over the next 2 years, because by then 92% of all mortgages will have flipped over, a lot of variable rate mortgages that had 100 year amortization to keep the payments manageable will be reset back to acceptable amortizations, and the process of people using up their credit to stay afloat which means a lot of people will take some time to reach the end point.
I really think this is just beginning.
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