It is different in the fact that GFC was pushed by subprime lending to people who one, could not afford the repayments long term, and two were usually given 100% LVR with interest only repayments. Lending is not as liberal today as it was then.
Our current situation is with mainly owner occupiers. Will an owner occupier really sell their home if paper value drops 20%? Where will they go with their family? What is the advantage to doing so, since one brings more problems onto oneself than one solves. From what I have read, most mortgages are still P&I at the moment, meaning that people can switch to fixed interest only for a time to take some pressure off and allow time to rebalance things. With wages and working conditions slowly readjusting to the inflation reality.
Interest rates are still low and are actually negative in real terms because inflation is much higher than current interest rates. Property investors are arguably in a more favourable position than owner occupiers and could more comfortably take a loss on a sale. But then why would they? Demand for rentals outstrips supply so they can charge dearly to cover interest expenses.
Reckless borrowing in the real estate sector seems low currently. Car and personal loans are another issue which will affect retail in its own way. I will also note that home values are up on post COVID figures thanks to cash injection/inflation.
I cannot see COF experiencing meaningful vacancies in case of large unemployment numbers given their quality tenants and long lease agreements.
COF Price at posting:
$1.44 Sentiment: Buy Disclosure: Held
(20min delay)