Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

Slotducks: Oct 16, 2008; Nobody puts Phil in a corner.

https://www.youtube.com/watch?v=vyis-EmiZXI

there you go a nice little bite sized how to so we can go back to talking about how hosed the housing market is

# ? Mar 4, 2022 20:39

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# ? May 27, 2024 15:57

JawKnee: Mar 24, 2007; You'll take the ride to leave this town along that yellow line

https://twitter.com/Ayan604/status/1499841521025097729?s=20&t=e3LT6efmjLepMrmleLN15A

# ? Mar 5, 2022 16:26

Femtosecond: Aug 2, 2003

JawKnee posted:

https://twitter.com/Ayan604/status/1499841521025097729?s=20&t=e3LT6efmjLepMrmleLN15A

Lmao.

I forgot all about Bob Ransford. He used to be super, super part of the debate in the early days when things were more of a "public vs the real estate developers" where the main ask people were looking for was simply real estate data about how much foreign buying was going on, and the real estate industry absolutely did not want anyone to know what was going on. He was always a blowhard.

Seemed like he vanished for a while after that, but maybe he was always around and the twitter algorithm stopped sending his poo poo my way. I dunno.

# ? Mar 6, 2022 01:58

Philman: Jan 20, 2004

https://ici.radio-canada.ca/info/2022/03/etalement-urbain-densite-population-villes-transport-commun-changements-climatiques/en

a visual representation of where the urban sprawl is, and why every family needs 3 pickup trucks.

# ? Mar 7, 2022 13:35

Fidelitious: Apr 17, 2018; MY BIRTH CRY WILL BE THE SOUND OF EVERY WALLET ON THIS PLANET OPENING IN UNISON.

Philman posted:

https://ici.radio-canada.ca/info/2022/03/etalement-urbain-densite-population-villes-transport-commun-changements-climatiques/en

a visual representation of where the urban sprawl is, and why every family needs 3 pickup trucks.

Yeah, not much surprising here. Our council (Ottawa) rambles on about increasing density but they fold to the NIMBY's every single time. They are powerless in the face of the phrase "neighbourhood character" apparently.
And Ottawa-Gatineau is already a massive area, there is so much opportunity for density increase. Ironically, the lack of density growth perpetuates itself. Councillors for rural areas represent less people and yet have an equal vote on council. Over time, council representation has become heavily influenced by rural/suburban wards who continue to vote for their interests.
As noted in this article, all of these low-density areas cost more to run than they bring in and so our urban wards are subsidizing these people's single-family homes with huge yards as they continue to vote against any urban projects and vote for continued expansion.

It's been a disaster for decades now.

# ? Mar 7, 2022 14:45

Guest2553: Aug 3, 2012

I want to believe, but lol lamo etc.

Comedy option: It's true but they'll renege just to piss off both those for and against.

e. My landlord is selling the place I rent for a bit over 40% what I'd want to pay for it, having seen the states of disrepair some stuff is in. Alas! Well. Nevertheless,

Guest2553 fucked around with this message at 01:21 on Mar 10, 2022

# ? Mar 10, 2022 01:14

qhat: Jul 6, 2015

Cannot use borrowed money to borrow money (big one!!!)

# ? Mar 10, 2022 01:28

qhat: Jul 6, 2015

I mean I dunno it's almost like a borrowed downpayment is the same as no downpayment at all. But poo poo what does a simpleton like me know about anything.

# ? Mar 10, 2022 01:29

qhat: Jul 6, 2015

Bad: Millennial Robinhood user abusing infinite leverage glitch to trade options
Good: Boomer real estate investor using infinite leverage glitch to trade houses

# ? Mar 10, 2022 01:33

Number19: May 14, 2003; HOCKEY OWNS
FUCK YEAH

#2 there will be completely ineffective and will just add a required money laundering step to gifting/HELOC down payments

# ? Mar 10, 2022 04:23

Mandibular Fiasco: Oct 14, 2012

None of this will meaningfully change anything. The �controls� are so easily bypassed it�s not even funny. The notary asks source of funds and you self declare. All trust, no verify. What a joke of a country.

# ? Mar 10, 2022 05:42

Fidelitious: Apr 17, 2018; MY BIRTH CRY WILL BE THE SOUND OF EVERY WALLET ON THIS PLANET OPENING IN UNISON.

Guest2553 posted:

I want to believe, but lol lamo etc.

Comedy option: It's true but they'll renege just to piss off both those for and against.

e. My landlord is selling the place I rent for a bit over 40% what I'd want to pay for it, having seen the states of disrepair some stuff is in. Alas! Well. Nevertheless,

All this dancing around rules minutiae when the blatant solution is to ban the entire concept of "investment property". You get to own one home and it's the one you live in, that's it. Go gently caress around with commercial real estate, not people's homes.

I have yet to figure out the part where existing residential landlords get expropriated but I'm sure something could be figured out.

# ? Mar 10, 2022 14:52

tagesschau: Sep 1, 2006; D&D: HASBARA SQUAD
THE SPEECH SUPPRESSOR

Remember: it's "antisemitic" to protest genocide as long as the targets are brown.

There's no real way to enforce #2.

# ? Mar 10, 2022 15:22

yippee cahier: Mar 28, 2005

Strict rent control + rules about the level of maintenance that must be done + punishing empty house and land value taxes. We can make them giant money pits and let the free market handle the rest.

# ? Mar 10, 2022 16:17

Hubbert: Mar 25, 2007; At a time of universal deceit, telling the truth is a revolutionary act.

Fidelitious posted:

All this dancing around rules minutiae when the blatant solution is to ban the entire concept of "investment property". You get to own one home and it's the one you live in, that's it. Go gently caress around with commercial real estate, not people's homes.

I have yet to figure out the part where existing residential landlords get expropriated but I'm sure something could be figured out.

why do you hate wealth creation

the federal housing minister is a mom and pop landlord who depends upon these investment properties, you should be more considerate of their needs

# ? Mar 10, 2022 16:17

Shofixti: Nov 23, 2005; Kyaieee!

Pamela Heaven, The Ottawa Citizen posted:

Posthaste: Canada's housing boom has been unprecedented; the fallout will be too, say these economists

Most agree that Canada�s housing boom during the pandemic has been unprecedented.

Low interest rates, pandemic shifts in homebuyers� preferences, excess household savings, ever higher price expectations and speculators and investors piling in have worked together to send home prices 50% above pre-pandemic levels as of February.

Now Oxford Economics argues that the aftermath of this boom will be unparalleled too.

In a report that goes beyond other forecasts of a cooling market, Tony Stillo, director of Canada Economics at Oxford, predicts that a housing correction beginning this autumn will see home prices decline 24% by mid-2024.

Oxford sees three triggers for the correction. First, and perhaps foremost, is the market itself. By late 2021, home prices were 19% beyond the borrowing capacity of median-income households in Canada, the report says, and the gains since then have just made it worse. Oxford expects by mid-year home prices will be an unprecedented 38% above what the average household can afford.

�We believe this will cause the housing market to reach a breaking point and crash under the weight of its own success before year end,� Stillo said in the report.

Second is higher borrowing rates. The Bank of Canada began its hiking cycle with a 25 basis-point increase earlier this month. Oxford expects a cautious path with three more hikes this year, a pause to assess the economy, and then gradual increases that will lift the rate to 2% by mid-2024.

Fixed-rate five-year mortgage rates are expected to rise to 4.25% by the end of this year and then climb gradually to 5% later in the decade.

The third trigger is new government housing policies. Some of the proposed national initiatives in the pipeline include a house-flipping tax, temporary ban on foreign ownership and a tax on non-resident-owned vacant homes.

A 24% drop in home prices sounds scary, and in normal times it would be.

But it would still leave prices 15% higher than before the pandemic, and lead to a healthier market, argues Oxford.

Home builders should have enough incentive to keep building and with a new government focus on increasing the housing supply, 2.35 million new units could be constructed this decade, outpacing the projected 1.9 million new households in Canada by 2030.

If that happens, Oxford forecasts home price growth would slow to about 0.7% a year between 2025 and 2030, less than inflation and income gains, gradually bringing homes back to a price Canadians can afford.

There are risks. While a 24% fall in home prices will knock near-term economic growth, it is unlikely to cause a recession or stress the financial system, said Oxford, though it adds that can�t be entirely ruled out.

However, if home prices continue to rise at the pace they have been there is a growing risk that prices won�t just correct, they will crash, the economists said.

�Although unlikely, a crash could see home prices plummet by 40% or more, with dire consequences for the broader economy and financial system,� Stillo wrote.

�The fallout from a housing crash would look a lot like the U.S. housing meltdown during the global financial crisis, despite a minimal role for subprime lending in Canada.�

Any reasonableness to this analysis? Feels very mildly hopeful which means it�s probably not accurate.

# ? Mar 21, 2022 19:36

Slotducks: Oct 16, 2008; Nobody puts Phil in a corner.

Maybe people have realized that paying 1 million dollars for a shithole townhouse in waterloo might be a little loving insane

https://housesigma.com/web/en/house/XRla7gxA14G3jEvL/386-LAUREL-GATE-Drive-Waterloo-N2T2S6-40223972-40223972-X5534190

# ? Mar 21, 2022 20:47

Mandibular Fiasco: Oct 14, 2012

Shofixti posted:

Any reasonableness to this analysis? Feels very mildly hopeful which means it�s probably not accurate.

Reasonable? Sure. However, the strategy clearly is to inflate prices to infinity. All policies at all levels of government are designed to inflate prices.

My recent letter to the BC Finance Minister about the homeowner�s grant and the property tax deferral was met with policy non-speak. They refuse to recognize the perverse incentives of the practices making the likelihood of real action nil. Disappointing to say the least, but this is the consequence of governance failure.

# ? Mar 22, 2022 01:54

Fidelitious: Apr 17, 2018; MY BIRTH CRY WILL BE THE SOUND OF EVERY WALLET ON THIS PLANET OPENING IN UNISON.

Shofixti posted:

Any reasonableness to this analysis? Feels very mildly hopeful which means it�s probably not accurate.

I suppose, but to me it just reads like "wow, home prices are out of control, surely they'll drop this time!" which is not exactly a novel thought.
We have been in an extended low-interest rate environment for quite a while so perhaps if there are actually significant increases there it will have some impact?

I feel like I would more expect growth to slow a bit as opposed to an actual 20+% cut, that sounds pretty crazy.

# ? Mar 22, 2022 13:47

MickeyFinn: May 8, 2007; Biggie Smalls and Junior Mafia some mark ass bitches

Mandibular Fiasco posted:

Reasonable? Sure. However, the strategy clearly is to inflate prices to infinity. All policies at all levels of government are designed to inflate prices.

My recent letter to the BC Finance Minister about the homeowner�s grant and the property tax deferral was met with policy non-speak. They refuse to recognize the perverse incentives of the practices making the likelihood of real action nil. Disappointing to say the least, but this is the consequence of governance failure.

The incentives seem pretty good for people who currently own a house.

# ? Mar 22, 2022 15:13

Professor Shark: May 22, 2012

I have a house

# ? Mar 22, 2022 17:23

Baronjutter: Dec 31, 2007; "Tiny Trains"

My house went up in value 300k just this year. 300k. One year. And that's simply the assessed value. I don't like that it did that, I don't think that's good. But most people who see "gains" like that get very excited and happy and start to bank on it and plan their finances around it, then they become dependent on it. Suddenly they care deeply about "solving the housing crisis" but in a magic way that doesn't slow their housing gains. Perhaps some bigger first time buyer grants? Perhaps 50 year mortgages? Affordable housing for the poors maybe, just nowhere near me of course and not paid for with my precious tax dollars.

# ? Mar 22, 2022 17:28

Precambrian Video Games: Aug 19, 2002

CBC had a handy portrait-orientation minute video on renting vs owning:

https://www.youtube.com/watch?v=S3pY-9aX7Xk

Nothing in it is really glaringly wrong, but it feels slightly out of touch to reassure Millennials (let alone Gen Z) that renting is a good choice as if ownership is actually a reasonable option for most.

# ? Mar 22, 2022 18:20

Hubbert: Mar 25, 2007; At a time of universal deceit, telling the truth is a revolutionary act.

Baronjutter posted:

My house went up in value 300k just this year. 300k. One year. And that's simply the assessed value. I don't like that it did that, I don't think that's good. But most people who see "gains" like that get very excited and happy and start to bank on it and plan their finances around it, then they become dependent on it. Suddenly they care deeply about "solving the housing crisis" but in a magic way that doesn't slow their housing gains. Perhaps some bigger first time buyer grants? Perhaps 50 year mortgages? Affordable housing for the poors maybe, just nowhere near me of course and not paid for with my precious tax dollars.

SLAMMING AND HAMMERING THE "PARETO EFFICIENCY" BUTTON WITH BOTH HANDS AS VIGOROUS AS POSSIBLE WITHOUT ACTUALLY DOING ANYTHING MEANINGFUL OR EVEN REMOTELY POLITICALLY CONTENTIOUS AS A GOVERNMENT

# ? Mar 22, 2022 18:58

Femtosecond: Aug 2, 2003

Backtracing the talking points back to 2014:

"People Just Want To Be Here"

quote:

Vancouver and Victoria rents jump 20% in 6 months as thousands move to B.C.
18,000 people moved to B.C. from other countries, 5,000 from other provinces in last financial quarter alone

Canadians migrating from other provinces to the West Coast are putting even more pressure on B.C.'s already strained housing supply, driving rents even further out of reach.

The average rents paid by tenants in Vancouver and Victoria have increased by more than 20 per cent in the past six months, according to the newly released National Rental Ranking.

It's left many questioning how they will afford to continue paying for housing in a province that has seen worsening prices for renters for years.

One of those renters is Victoria nursing student Jett Carey, who said he's spent the last four years having to move again and again between shared houses because of high rents and low supply.

"I've been moving every year, basically � once or twice a year," Carey told CBC News on Thursday. "Every September, it'll be the same sort of situation, where myself and a bunch of other friends � will apply to a bunch of different houses. Oftentimes, we won't get it."

He said he hasn't actually been named on a lease for three years, instead finding himself crammed into increasingly tiny rooms in other renters' over-crowded houses.

"They had talked to the landlord, signed the lease and packed in all the rooms � and I was one of those people," he said.

Cramming seven residents into a house leased to just four of them was the only way he could afford rent � in which each roommate paid $700 a month � in his most recent house.

At that rate, he considers himself lucky compared to other renters in the province's capital.

According to new rental statistics released Friday, average rents in Victoria are more than $1,600 a month for a one-bedroom apartment and nearly $2,700 for two bedrooms.

Vancouver remains the highest-priced market in the country � with renters paying more than $2,200 every month for a one-bedroom unit, an increase from previous years. In comparison, Calgary renters pay, on average, nearly $1,300 a month for a one-bedroom, and $1,500 for two bedrooms.

Prices are rising dramatically, thanks to still-scarce housing supply, and more people from other places moving to B.C. In the last financial quarter, 18,000 people moved here from other countries, and 5,000 from other provinces, especially from Alberta and Ontario.

B.C.'s minister responsible for housing, David Eby, told CBC News the data highlights the largest movement of people into the province in decades.

"This was a 30-year high in migration from other provinces and other countries," Eby said, "at the same time as we had a 30-year low in the number of listings for real estate."

In addition, the problem has been worsened by vacancy rates under one per cent in most of B.C.'s major cities.

"So this is a huge amount of pressure."

For housing data expert Leo Spalteholz, with House Hunt Victoria, increasing the density of single-family home neighbourhoods is the solution. But such an approach is also often extremely controversial among existing residents in those areas.

"What we have to accept is that change is inevitable," Spalteholz said. "And if we plan for it in advance, and equally distribute it throughout the region, that could make our region better in terms of creating more affordable more inclusive communities."

Paul Danison, content director for Rentals.ca, said such so-called "inclusionary zoning" would allow for more duplexes, triplexes and multiple units built on properties once designated for only one housing unit.

"It's very difficult unless you have the bank of mum and dad," he said. "It's incredibly difficult for students � they're going to have to take on more roommates, find more basement apartments, look for co-ops and co-living situations. They have to get really creative.

"That's an issue that really needs to be addressed � Officials are going to have to take some steps."

Eby said his government is looking at changes to legislation to override resistance from cities that are not approving affordable housing projects fast enough. And he said B.C. is looking at other countries such as New Zealand, which has banned single-family home zoning in its major cities.

For Carey, as a tenant, such changes can't come soon enough and may be too little, too late for many renting families.

"The amount that you pay in rent isn't justified by the opportunities here," he said. "It's just too expensive."

# ? Mar 23, 2022 04:23

B33rChiller: Aug 18, 2011

I've been waiting for this drat correction since Jim Flaherty was finance minister. Let's get this show on the road already.

# ? Mar 23, 2022 05:04

Alctel: Jan 16, 2004; I love snails

Femtosecond posted:

Backtracing the talking points back to 2014:

"People Just Want To Be Here"

I mean, 23,000 people in three months IS a lot of people

# ? Mar 23, 2022 05:57

Baronjutter: Dec 31, 2007; "Tiny Trains"

Maybe 5 years ago I entertained some left-nimby ideas. I believed outside investment was a big driving force in our bubble, I believed "just upzone" was a simplistic liberal solution that would only see the "wrong kind of supply" added. I believed we needed more supply of course, but that there was a vast amount of empty hoarded condos and houses out there to regulate back into the market.

I've become fully supply pilled now. The whole "what about speculators" is a red herring because speculation is only profitable in shortages. Eliminate the shortage and you eliminate the speculation. I've read so many reports now directly from companies that speculate on housing and advise clients on how to make obscene profits on housing and the answer is to always buy up in areas with shortages with local politics firmly against mass supply. The biggest danger to landlords and speculators is simply ample supply and they outright state that in any internal communication or report.

We of course need investment in actual social housing, but when everyone who can afford market prices are well served by ample supply it massively eases the burden on the social housing system.

Of course we're not just facing a housing crisis, we're facing a climate crisis too. We should not be building more sprawl to solve the market housing shortage of course, what we need to do is break the back of urban nimby's. There should not be any R1 zoning within a 15min walk of a major transit line.

# ? Mar 23, 2022 18:27

TheSpamalope: Dec 30, 2008; by sebmojo; Lipstick Apathy

im getting the crapola outta BC because it's become hostile to human life

# ? Mar 23, 2022 21:17

qhat: Jul 6, 2015

More supply is worthless when it's easy to exploit infinite leverage tricks using HELOCs at miniscule interest rates and acquire home after home with impunity.

# ? Mar 23, 2022 21:35

tagesschau: Sep 1, 2006; D&D: HASBARA SQUAD
THE SPEECH SUPPRESSOR

Remember: it's "antisemitic" to protest genocide as long as the targets are brown.

qhat posted:

More supply is worthless when it's easy to exploit infinite leverage tricks using HELOCs at miniscule interest rates and acquire home after home with impunity.

We aren't (and haven't been, at least not in my adult life) in a situation where there's a housing shortage. It's just that people who wouldn't be able to afford to purchase property without massive leverage are able to use other people's money to get that leverage and punch way above their economic weight. Once it becomes clear that it's not actually a risk-free proposition, the supply of other people's money will dry up.

# ? Mar 23, 2022 21:55

qhat: Jul 6, 2015

tagesschau posted:

We aren't (and haven't been, at least not in my adult life) in a situation where there's a housing shortage. It's just that people who wouldn't be able to afford to purchase property without massive leverage are able to use other people's money to get that leverage and punch way above their economic weight. Once it becomes clear that it's not actually a risk-free proposition, the supply of other people's money will dry up.

This is basically what I said. You can make as much supply as you want but as long as it's easy and cheap to get a hold of money, it'll just get absorbed instantly.

# ? Mar 23, 2022 22:00

tagesschau: Sep 1, 2006; D&D: HASBARA SQUAD
THE SPEECH SUPPRESSOR

Remember: it's "antisemitic" to protest genocide as long as the targets are brown.

qhat posted:

This is basically what I said. You can make as much supply as you want but as long as it's easy and cheap to get a hold of money, it'll just get absorbed instantly.

Right. I'm largely just venting my frustration at the massive moral hazard we're seeing.

# ? Mar 23, 2022 22:03

Alctel: Jan 16, 2004; I love snails

It's probably a bit of both to be honest

It being so easy to borrow if you already have property leading to hoarding is definitely at issue but on the other hand - 23,000 new people in three months.

# ? Mar 23, 2022 22:17

qhat: Jul 6, 2015

How many of those are actually credit-worthy though. The current policy of the banks is "all of them".

# ? Mar 23, 2022 22:18

Noblesse Obliged: Apr 7, 2012

Supply side brain is the same as �just make more lanes and traffic will get faster� brain

# ? Mar 23, 2022 22:44

leftist heap: Feb 28, 2013; Fun Shoe

Vacancies are hovering at or under 1% in Victoria. It sure seems like more apartments would help.

# ? Mar 24, 2022 00:35

Femtosecond: Aug 2, 2003

qhat posted:

More supply is worthless when it's easy to exploit infinite leverage tricks using HELOCs at miniscule interest rates and acquire home after home with impunity.

That is an issue, on the buying side for some potential buyer that is looking to buy their first condo to live in, though so long as the investor collecting up all these homes is renting them out whoever owns it doesn't really matter to the end renter.

Rental vacancy in Vancouver is now 1.2% with layers of speculation and empty home taxes in place, which is evidence that there remains a severe lack of apartments available for rent.

Preventing investors from buying multiple units isn't really going to change the rental situation out there. Landlordism is an issue but a tangential one to the more significant main problem, which is a scarcity of apartments available to rent.

People are particularly interested in buying more apartments to become landlords because of this ultra low rental vacancy, as it guarantees them a tenant and an ability to raise rates in the future. It's a great investment.

This investment gets worse if the rental vacancy rate is not 1.2%. There's no way to address the 1.2% rental vacancy issue other than building a gently caress ton of more apartments to rent.

Every solution to our housing problems flows from getting rental vacancy up to 5%+.

# ? Mar 24, 2022 00:43

MickeyFinn: May 8, 2007; Biggie Smalls and Junior Mafia some mark ass bitches

tagesschau posted:

We aren't (and haven't been, at least not in my adult life) in a situation where there's a housing shortage. It's just that people who wouldn't be able to afford to purchase property without massive leverage are able to use other people's money to get that leverage and punch way above their economic weight. Once it becomes clear that it's not actually a risk-free proposition, the supply of other people's money will dry up.

Since capital is apparently so easy for homeowners to get, why is it that capital holders would rather loan out that money to homeowners than use it to build factories or do something productive? I'm not begging any questions here, I don't know. Since the great recession, it seems like all asset prices are way up: gold, housing, stocks, and even fake assets like Bitcoin and NFTs. Sillicon Valley is awash with money being set on fire to look for the next Facebook/Google/whatever, too. Interest rates have been at/near zero for so long I barely remember any other state. Where is the supply of other people's money going to go if housing prices do collapse? I guess you can say that the money will be destroyed, but this is the second (supposed, at the point) housing bubble of my adult life. So I think sooner or later that money will come back after a crash. I just can't figure out why we can't do something better with it. Why housing?

# ? Mar 24, 2022 00:52

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# ? May 27, 2024 15:57

qhat: Jul 6, 2015

MickeyFinn posted:

Since capital is apparently so easy for homeowners to get, why is it that capital holders would rather loan out that money to homeowners than use it to build factories or do something productive? I'm not begging any questions here, I don't know. Since the great recession, it seems like all asset prices are way up: gold, housing, stocks, and even fake assets like Bitcoin and NFTs. Sillicon Valley is awash with money being set on fire to look for the next Facebook/Google/whatever, too. Interest rates have been at/near zero for so long I barely remember any other state. Where is the supply of other people's money going to go if housing prices do collapse? I guess you can say that the money will be destroyed, but this is the second (supposed, at the point) housing bubble of my adult life. So I think sooner or later that money will come back after a crash. I just can't figure out why we can't do something better with it. Why housing?

This is my basic high level understanding of how the private banking system work. I might be wrong, but let me try to explain.

The bank doesn't have a finite pool of money it's looking to distribute only to the most profitable ventures. All the bank needs in order to make a loan is the belief it will make a profit on it and then it just changes a number in a computer and poof your loan is approved. If the bank doesn't believe it can make a profit on your loan, i.e they think you might default, they will not make the loan. When your loan is approved, you obviously don't get a bag full of cash which you pay the seller, your money stays within the private banking system and is cleared in overnight trading with the other person's bank, where the lender bank clears the loan outflow with cash inflows with other banks and/or borrows/lends the difference from another bank at the interbank interest rate.

This rate is targeted by the central bank. It does this by bidding up the price of safer securities, such as government bonds, to increase the "risk free rate", but it can also do this with other relatively low risk securities, such as Canadian Mortgage Bonds directly. It then pays for these securities in central bank reserves which pay a fixed interest rate, and the reserves can be used to clear transactions between banks in overnight trading, but cannot be lent out to customers because customers obviously do not have reserves accounts. In essence QE is just the central bank modifying the asset distributions of the private banks so that they can still clear transactions at the end of the day. I think this won't necessarily stop banks from lending, though, if they know there is a willing buyer (the central bank) for their mortgage backed securities at an inflated price. Again, if they think they'll make a profit, they'll make the loan, period.

In short, nobody is looking to lend out only to the most profitable or virtuous causes, they all just want to make a profit next quarter.

# ? Mar 24, 2022 01:19

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

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