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Comment by ttul | Hacker News Reader

Just wait. In 2025, all the five year terms for those ultra cheap pandemic mortgages will reset.

When that starts to happen the Bank of Canada will just lower interest rates to 1% again. The Canadian economy relies heavily on the real estate shell game; they're not going to risk blowing it up. (Maybe they should, and weather the pain so that the economy can go back to producing tangible value again, but that's not how politics works.)

sad but probably true, everybody in charge is invested

The BoC is relatively technocratic and they won't lower interests purely to help homeowners. However, given how much leverage Canadians carry, a shock to the housing sector would probably bring about a recession, which would force the bank to cut rates... at which point you do have to wonder whether house prices would just head back up to the stratosphere in short order.

> at which point you do have to wonder whether house prices would just head back up to the stratosphere in short order

Not sure why you're assuming they'd ever come back from the stratosphere in the first place. All another rate cut would do is untether housing prices entirely from earth's gravitational field, as they disappear into space, like the prospect of homeownership for most people.

And then you have to wonder how long young Canadians will stay in the country, when better prospects can be had nearly anywhere else. Japan? Their housing costs have been falling for decades. How about almost anywhere in the USA? If you seek a high degree of social welfare, go to Finland.

Canada is broken for young people. They should leave.

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