Inflation align with interest rate?

[nepoez]

I`d like to hear everyone`s opinion on this question I got from a potential JV. I think it`s a valid concern for anyone investing in RE.

"How likely is it that in 5 years interest rate will be 6% or 8% while most rent prices and/or home values remain the same as today?"

 

[Thomas Beyer]

QUOTE (nepoez @ Apr 28 2009, 10:45 PM)
I'd like to hear everyone's opinion on this question I got from a potential JV. I think it's a valid concern for anyone investing in RE.



"How likely is it that in 5 years interest rate will be 6% or 8% while most rent prices and/or home values remain the same as today?"


It is possible .. imagine real estate prices today with interest rates @ 8% .. they'd be down substantially !



Home values and rents in many markets will be higher in 5 years .. but maybe similar to 2009 in others ..



Check this post with a 50 Year house price view for Calgary: http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-6621-50_Year_Calgary_House_Price_View.html



5 year peak to peak from 2007 to 2012 .. so yes, likely a tad higher than 2007 in 2014 .. and higher than in 2009