REAL 10 YEAR INTEREST RATE Bank of Canada 10 year Bond less CPI; also the TSX Real Estate, Energy and Gold Indexes
CLICK CHART TO ENLARGE
The chart above shows that in June 2017 the "Real" Bank of Canada 10 Year Treasury Yield (the rate less CPI - blue dotted plot) moved up on a CPI drop from 1.3% to 1.0%. The real 10 year yield is again out of the Nirp-O-Nomic zone where it had been for 13 out of 17 months.
Gold has put in a 4 year bottom and its summer of 2016 breakout is keeping it aloft in the upper end of its channel.
Global currency turmoil, pressure from rising rates as well as trade and war unknowns are coloring both sides of the debate on the ultimate direction of real estate prices.
So far NIRP & ZIRP have failed to inflate household earnings which in Canada look to have peaked recently. The debate on the ultimate direction of real estate prices continues.
Gold has put in a 4 year bottom and its summer of 2016 breakout is keeping it aloft in the upper end of its channel.
Global currency turmoil, pressure from rising rates as well as trade and war unknowns are coloring both sides of the debate on the ultimate direction of real estate prices.
So far NIRP & ZIRP have failed to inflate household earnings which in Canada look to have peaked recently. The debate on the ultimate direction of real estate prices continues.
The 10 year bond yield is a bench mark for real estate mortgage rates. I have used it in my Vancouver Condo Case Study to measure risk against the buy and hold argument.
Compare 2006-2008 to 2014-2016:
- The Real 10yr Yield plunged (✓)
- Gold break out and volatility (✓)
- Energy threats and rumours (✓)
- Real Estate spiking into resistance (✓)
