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Until there is a major change in the world wide economy, the interest rates are not going to move. Places like japan are still seeing interest rates at or below 1% typically. I truly doubt you will see anything above 5% in US or Canada in the next 5 years. The reason is pretty simple: Lower interest rates lower the value of bonds, which is how the government borrows money. With Bush digging an economic hole as fast as he can, there is no desire to make that money more expensive. As a secondary effect, it keeps the value of the US dollar down a bit, which raises the prices of imports but makes it possible to produce goods at a competitive rate inside the US, which means more employment, which means more demand for housing, which works best is a low interest rate situation.
I bought my house just over three years ago, the neighbor just sold an almost identical unit for just about twice what I paid - and they are still building behind and around me. Your 800k will get you 4000 sqaure feet on the edge of a golf course or something smaller and older with a water view maybe water edge around here.
Alex
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