Canadian Federal Government Signals Inflation In The Housing Market, Starting April 6, 2020, insured mortgages will be easier to obtain – February 22, 2020,
I listen to Libertarian minds from America like Ron Paul and Peter Schiff and although I understand their pain seeing Liberterties being taken from Americans, I disagree with them, when they say the U.S dollar will crash. The only way I see the U.S fiat dollar crashing is war or a Bernie Sanders precedency. As long as non-market based socialism doesn’t take over America, I don’t see how the U.S dollar crashes.
In Canada, the Federal government picking winners and losers is an accepted practice, that barely anyone questions. With lower interest rates, chances are the Canadian housing market would have been inflated anyway, but the Canadian federal government added fuel to the fire by creating the Government agency known as Canada Mortgage and Housing Corporation or CMHC.
Since the creation of this entity, housing prices refuse to deflate in most parts of Canada, why? Because there really is no housing market in Canad, if you look at home prices in Canada, they’ve done nothing but appreciate and when they don’t appreciate the government implements measures that will make them appreciate. Now, the article below is an indication that the housing market in Canada wants to deflate.
If Canadians aren’t qualifying for Houses and Condos for Sale, Why not Lower the selling price? Lobby the Government to Raise Mortgage Prices!
What’s been happening recently is people aren’t qualifying for homes on the market, the stress tests that exist would probably exist anyway if Bank of Canada interest rates were where they’re supposed to be, I remind the reader that the Canadian housing market hasn’t crashed since the 1990s. What happened in the mid to late 1990s prior to the CMHC involving itself in mortgage insurance is that housing prices in Canada refused to appreciate, in the 1990s Condos back then met consumer demand and if they didn’t consumers would call the news and make a fuss about it.
In the modern era, most of the Condos in Ontario as an example are worth the sticker price, however, they get gobbled up by investors who buy for the guaranteed price appreciation. Now, currently, housing in Canada has remained stagnant because of supposed stress test rules, but I remind the reader again that the Canadian housing market hasn’t crashed and lower interest rates haven’t helped Alberta, so explain to me why interest rates in Canada are so low? Even Poloz has signaled that interest rates in Canada won’t match what is happening in America.
What’s clearly happened to the Canadian housing market is that the crash has already begun, the government can’t control the selling price and if the Canadian banks are left to their own devices they’d charge whatever their institution can afford to lose, which in a mortgage insurance environment in which the Canadian taxpayer is on the hook for a mortgage crash, the Canadian banks would take things to their limits if they see potential.
Why I say all of this is that the CMHC is the entity manipulating the housing market, we have no market and the government has decided that the Canadian dollar will depreciate, which is why in Canadian dollars the price of Gold and Silver continue to rise while in American dollars the price of gold is still fluctuating. The problem Canada is going to have is debt servicing, this is why I see a stagnant economy in the future for Canada. As housing costs rise because of the CMHC, rents will rise, we have a carbon tax coming in April energy costs will rise, which means food prices will rise. It’s coming Canada be prepared!
Ottawa changing stress test rate for insured mortgages starting April 6 | ctvnews.ca
Interesting times ahead!