GTA home sales down 40 per cent in March compared to last year, report shows

This is in response to the article written here:
https://www.thestar.com/business/2018/04/04/gta-home-sales-down-40-while-average-price-drops-14-from-previous-march-report-shows.html

Well it’s nearing the summertime season 2018 and it appears that there are warning bells regarding the housing market in the greater Toronto area(GTA) Personally I don’t care that much anymore, I live in Toronto, it’s a disaster, how anyone could even pay $300,000 for some of these houses is beyond me, ofcourse the GTA housing market is dependent on foreign capital to keep prices high, but the real problem in the GTA is the problem of rental controls. There is far more incentive to build a condo in the GTA than there is to build rental housing.

It’s the government not understanding this that tells me that there will be some unforeseen consequences coming in the coming years. Just being honest, I have no idea when these consequences will actually start to show themselves. Typically the crashes happen from something unexpected, I think the crashes will happen when prices get stagnant and the government allows banks to offer 100 year amortizations, thus lowering the cost of a mortgage payment  so a person can essentially be an owner without ever having the hope of paying off her/his mortgage.

Canada is heading for a Japan style housing crisis in my view, where Canada differs is that our manufacturing base is being undermined, so I question if the qualifying criteria for a condo or home owner will change in the future or if Canada’s big banks will simply exit the housing market altogether and leave it the Schedule 2 and 3 banks to run.

What the Canadian media is not realising is that housing prices can not go down anymore. If housing prices stagnate, and people can no longer get credit, or suck equity out of their homes the game is over! There is no going back, unless of course you want a crash? Whether it be a conservative or a Liberal no politician wants that scar on their resume. What I’m getting at here is that Donald Trump in many ways is a God send for Canada. At least with Trump Liberals have someone to blame if the Canadian economy crashes. I’m sorry Canada housing prices can not stagnate or come down.

If the banking or financial sector in Canada namely the subprime sector gets spooked and exits the Canadian market it is game over. When the U.S housing market crashed a lot of subprime lenders in Canada left. When financial institutions leave your country it means there’s less capital to loan to Canadians, which mean there are less options, which means if you’re maxed out credit wise, with one lender there exists no other option for you except bankruptcy. This is often the problem when people get into payday loans.

Once a person has 3 or 4 payday loans at once, another payday loan lender will be reluctant to lend to them, well imagine a person in debt, maxed out with no option out of their debt contract? no hope for them to find a another lender to take their loan on? Now picture a homeowner already in debt with a home equity loan maxed out and her/his house stops rising in value? Then what? Do you think this homeowner is going to want to stop having fun using his/her house as an ATM or will they beg the government to save them? The banks will be on the homeowners side when they ask for a ladder up. Canada housing prices have to continue to rise or they’ll crash. I hope Canadians understand this!