My Opinion : Massive CCP Money Laundering , people cant afford to live in the communities they live in !
The Vancouver housing market has been a topic of concern for many years, with skyrocketing prices making it difficult for many residents to afford a home. In 2018, the government implemented a slight rate hike to help correct these prices. In this essay, I will explain in 1000 words how this rate hike worked to address the issue of housing affordability in Vancouver.
First, it’s important to understand how the housing market in Vancouver became so expensive. A major factor is the city’s desirability. Vancouver is a beautiful city, with stunning natural scenery and a mild climate. As a result, many people want to live there. However, the city’s limited land supply has not kept up with demand, leading to a shortage of available housing. This shortage drives up prices, making it difficult for many residents to afford a home.
Another factor is foreign investment. Vancouver is a popular destination for foreign investors, particularly those from China. These investors see Vancouver real estate as a safe and stable investment, and are willing to pay top dollar for properties. This demand from foreign investors further drives up prices, making it even more difficult for local residents to buy a home.
To address these issues, the government implemented a slight rate hike in 2018. This rate hike affected the Bank of Canada’s overnight lending rate, which is the interest rate at which banks can borrow money from the central bank. When the overnight lending rate goes up, banks have to pay more to borrow money, and this cost is passed on to consumers in the form of higher interest rates on loans and mortgages.
The goal of the rate hike was to slow down the housing market by making it more expensive to borrow money. With higher interest rates, fewer people would be able to afford mortgages, and this would reduce demand for housing. This, in turn, would put downward pressure on prices, making homes more affordable for local residents.
The rate hike had an immediate effect on the housing market. Within a few months of the rate hike, home sales in Vancouver began to slow down. This was due in part to the higher cost of borrowing, but also to new mortgage rules that were implemented at the same time. These rules required borrowers to undergo more rigorous stress tests to ensure they could afford their mortgages even if interest rates rose further.
The combination of the rate hike and the new mortgage rules made it more difficult for many people to qualify for a mortgage. This reduced demand for housing, and as a result, prices began to decline. By the end of 2018, the average price of a home in Vancouver had fallen by about 6%, and sales had dropped by over 30%.
The rate hike also had a ripple effect on the economy as a whole. When housing prices fall, people feel less wealthy and tend to spend less money. This can slow down the economy, as fewer people are buying goods and services. However, the rate hike was designed to be slight, so as not to cause a severe downturn in the economy.
Another positive effect of the rate hike was that it helped to cool down the foreign investment in Vancouver’s housing market. With higher interest rates, foreign investors would receive lower returns on their investments, making Vancouver real estate less attractive. This reduced demand from foreign investors, which helped to put further downward pressure on prices.
Overall, the rate hike in 2018 was successful in addressing the issue of housing affordability in Vancouver. By slowing down the housing market, the rate hike helped to make homes more affordable for local residents. The rate hike also had a positive effect on the economy, as it helped to prevent a housing bubble from forming. Finally, the rate hike helped to reduce the impact of foreign investment on Vancouver’s housing market, making it a more stable and sustainable market for everyone.
In conclusion, the 2018 rate