Will rising oil and gas prices increase inflation and thus the national interest rate poping the realestate bubble? IMO that would turn things arround rather quickly. That said we do have effects of Katrina in our corner for the lumber industry up here in the North. I'd hate to own a home in the Lower Mainland right now.

From darn near last to "first?"
Sounds great!!!
I, for one, certainly hope the rebound is swift, and long lasting.
Many have had a tough row to hoe for some years.
Maybe now they can look for the good times for a change.
Cheers!!!!

There are several definitions of inflation. I would say inflation is caused by an economic boom which in turn is caused by an increase in demand for products and services which result in higher employment. The two spiral together towards the boom.

The increase in oil prices is not caused by an increase in demand but a decrease in supply. When oil fields in Iraq are shut down and eight refineries in NO are shut down, these are not inflationary events. I think they are much more the types of events which cause depressions.

Thus, I suspect the interest rate will stay as is for a while longer rather than possibly increasing in the next month or two as predicted.

Will prices of real estate in the GVRD drop? There have been projections, for some time now, that some of the major urban centres in the USA, which have attempted to limit their growth through restrictive zoning, have developed artificially high housing prices and that the bubble will soon burst. These cities include Boston, San Francisco and Portland Oregon. I am not sure if I would include Vancouver in that, although it is quite restrictive in not providing an adequate transportion network for a city of its size.

I think Vancouver will continue to be a destination city for many. However, there will shortly come a time when the baby boomers in the middle income range may have to or wish to cash out their real estate holdings to move to less expensive accommodations and have money to supplement their other retirement savings and income.

As far as Katrina helping our lumber sales. That is an interesting one from my point of view. I would never build a light wood framed building in that part of the world.

I think the three little pigs learned that a long time ago. :-)

Try this for a "hurricane proof" house ....

http://www.fema.gov/regions/iii/2000/r3n021.shtm

but, we would not want to be ethical and suggest that they look at building like that, would we ... :-)

Ya ya ya ya. Just remember these #'s are for all of B.C. Are there #'s out for just P.G.? I would guess that the hottest growth ares are the Okanagan and lower mainland NOT the northern interior. So keep on believing the pipe dream. Whoever said they would "hate to own a house in the lower mainland", ya good one there. I would hate to be sitting on a few hundred thousand or more in equity. What a shame that would be. Much better to be in ol P.G. waiting for your home to be worth as much as you paid for it. dreamer...

later.........

Bank of Canada likely to raise interest

Broadcast News

Monday, September 05, 2005

OTTAWA -- Analysts say it seems all but the certain the Bank of Canada will bump up its trend-setting interest rate this week.

But the economic damage created by hurricane Katrina in the southern U.S. is raising questions about just how many rate hikes might follow.

Canada's central bank has made clear it intends to raise its key rate by a quarter of a percentage point to 2.75 per cent on Wednesday.

It aims to keep the economy growing but not so fast that it could fuel inflation.

Analysts had expected several small increases over the coming months.

But the central bank may decide to skip a few if the U.S. economy is slowed dramatically by the natural disaster.

The Bank of Canada's rate influences some consumer loan costs, such as the prime interest rate charged by the commercial banks to their best customers.

© Broadcast News 2005

Spank I'd hate to be sitting on a half million dollar mortgage when every % rise in interest rate wipe out anouth half a paycheck. Not long before you're bankrupt.

At least in PG it not much of a concern. lol

hmmmm .....

at 3.75 % over 25 years the monthly payment for P+I would be about $2,570.

with a 4.75% rate the monthly payment would be $2,850.

That's an increase of $280 per month.

If the rise in interest rate wipes out about half a pay check, and you get paid say twice a month, that means that your after deductions paycheck would be check would be $1,120 per month.

Unless you are selling coke on the side, you would not be living in a house with a half million $ mortgage .....

Those who are, would likely not be too concerned about another $280 per month. They would be concerned more about the value dropping below the mortgage on the property, as would the bank.

It has happened!!!!
Many home owners had a much higher morgage than what they could sell their homes for.
Many simply walked away.
Banks changed their policy, and people had to borrow money and pay to walk away!!!
I have no proof of this. Does anyone know how that was initiated???
I do not think there will be a rise in interest rates.
Is'nt there a greater fear of recession right now????
Has the economy improved dramatically here in Prince George, or are we still floundering????
So many rumors-one does not know just what to believe!!!!