The No. 1 issue on James Hodgins’ mind is the eventual rise in short-term interest rates. The chief investment officer at Toronto-based CHS Asset Management noted that the market isn’t pricing in rates at 2% until early 2016, but he’s ready to make some big bets before that point approaches.
“I firmly believe we have a significant property bubble here in Canada,” Hodgins said, noting residential property prices on a price-to-rent ratio are more than 50% overvalued if rates end up in the more normal 3%-to-4% range. “If and when short-term interest rates rise, you’ll see property prices come down sharply.”
“I firmly believe we have a significant property bubble here in Canada,” Hodgins said, noting residential property prices on a price-to-rent ratio are more than 50% overvalued if rates end up in the more normal 3%-to-4% range. “If and when short-term interest rates rise, you’ll see property prices come down sharply.”
