It's a puzzle

[BobH]

It's a puzzle that after over 3 months of lock down Canadian house sales on opening up the economy are in many places strong with some buyers bidding more than the asking price. You'd think that after all those months of income loss the opposite would be the case.

Bob

[PaulFLUS]

The cliches don't always hold true. During famine drought and disease vultures live like kings.

[thebigspendur]

In many cases folks have been receiving salary and have not had a chance to spend it so now they are flush with cash.

[holli4pirating]

Also interest rates are very low right now (at least in the US)

[BobH]

Also interest rates are very low right now (at least in the US)

Yes, they are very low at the moment and have been low for at least a decade globally. There have been plenty of warnings that Canadians have already such a high debt load they could wind up in trouble in case of recession like 2008 or interest rate increases. Why take more on in the midst of a global pandemic that nobody knows what the future will be like when it is over in a year or so at best?

Bob

[thebigspendur]

Yes, they are very low at the moment and have been low for at least a decade globally. There have been plenty of warnings that Canadians have already such a high debt load they could wind up in trouble in case of recession like 2008 or interest rate increases. Why take more on in the midst of a global pandemic that nobody knows what the future will be like when it is over in a year or so at best?

Bob

Well, you know they keep finding out all the bad things this virus can do to you no matter how asymptomatic you might be. If you agree not to tell anyone I'll tell you what a Government Scientist told me the other day. He said a few months down the road and based on genetic analysis everyone who carried the virus will suffer the fate of being turned into....you guessed it....ZOMBIES.

So far that's 3 million plus right here and soon they will be crossing the northern border so you had better watch out. They be very hungry.

[BobH]

In many cases folks have been receiving salary and have not had a chance to spend it so now they are flush with cash.

A few months unspent salary fuels the urge to buy a house and bid higher than asking prices?

Bob

[easyace]

It has been the same most places.
The reasons are quite simple, if you have money (and there are a great many that do), where should you keep it?

In the bank? next to 0% interest. (banks have been known to go broke, something unimaginable a few years ago, but has happened recently)

Pension scheme/life assurance policy ? once again rubbish returns over the last few years and a risk of losing all of it.

Stocks and shares, for myself I have never been burdened with great intellect and like most people it seems like a good way to lose money (Investments, may go down as well as up, but are more likely to crash completely)

Razors ? let's not do this one.

Buy property ? I have some, (residential in London, the properties that are rented yield 14% on investment. Then there is the capital growth. The properties are valued at around three time the value I paid for them, this has been over a 40 year period.

[DZEC]

It has been the same most places.
The reasons are quite simple, if you have money (and there are a great many that do), where should you keep it?

In the bank? next to 0% interest. (banks have been known to go broke, something unimaginable a few years ago, but has happened recently)

Pension scheme/life assurance policy ? once again rubbish returns over the last few years and a risk of losing all of it.

Stocks and shares, for myself I have never been burdened with great intellect and like most people it seems like a good way to lose money (Investments, may go down as well as up, but are more likely to crash completely)

Razors ? let's not do this one.

Buy property ? I have some, (residential in London, the properties that are rented yield 14% on investment. Then there is the capital growth. The properties are valued at around three time the value I paid for them, this has been over a 40 year period.

Agree. With low mortgage interest rates, real estate has proven to be a much sounder investment than almost anything else in the last 10 years. And, in Canada, when you sell your principal residence, any profit you make is tax free.

[PaulFLUS]

Every adversity is an opportunity. Some businesses actually thrive on this. Fabulous time to be in the hand sanitizer business. During the Great Recession a few years ago what was a tragedy for.some was a windfall for my business. In a 2 year period I did 401 lock changes on foreclosed properties....just myself...in one town, in one state. That's not the sum by the way, it's just a tally of the big surge from the two main agencies. It doesn't include all the other individual companies or the others from those two after the two year period when it slowed down.
Am I happy people lost their homes? No but I am happy to have enough business to not join them in that. It's also not all grannies and families out on the street and living under bridges. Some of them you could see were people who bought it to flip it then the market tanked. Oh well. You lay down with a gorilla you gonna eat nanners. But all you have to do is look around to see that there are NOT thousands of families living in boxcars and under bridges. They are renting now. And so opportunities increase in the rental property business.
To be successful one can't be a nervous Nellie or a chicken little. One must look for ways to capitalize on any given situation. "Luck favors the prepared." Or if you're religious, "when God closes a door he opens a window."
Oh, by the way, word on the street is that in the next year to year and a half I will see another big surge in the foreclosure rekey market.