Big city mayors call for emergency federal funding to deal with housing crunch caused by CMHC and Rental Controls – January 28, 2019,

What happens when you mix CMHC and Municipal rent controls in a major city? You get Toronto and Vancouver, I get it Canada, you like big government, you like Keynesianism, you like socialism, you like a social safety net, you like it when the government gets to pick winners and losers, you prefer government security over freedom, you prefer protectionism and corporatism over free markets, you prefer price controls over price fluctuations, I get it now Canada, that appears to be what you’re voting for, however something has to be explained to the Canadian voter. The problem with supply management, minimum wages, rent controls and insuring the housing market using the BoC and the CMHC is what happens when actual price deflation enters into the market.

Currently in Vancouver and in Toronto the valuations of real estate aren’t based on any real consumer-based fundamentals, instead, the housing markets in most major Canadian cities is based on central planners, who saw a vision for Canadians that included a lot of one and two bedroom condos. Condos that Canadians would actually consider purchasing are in short supply which is why detached homes, semi-detached homes and any new condo development that has more than 3 bedrooms is so expensive.

The market fundamentals in Canada’s largest cities have been thrown out the window in favor of central planning, and the bill for this scheme is coming due. Again I’m not the type of person that can give a time one when this crash is going to happen, but m hope is that it happens soon, because as an example Toronto has a lot of skyscrapers being built, many of which are empty or I should say being purchased by speculators who plan to buy and flip.

Prior to CMHC insuring mortgages with 5% down and less, condo developments would be built based on demand, which is why in the 1990s when a condo was built there was typically more thought put into building them because there was more fear that they wouldn’t be purchased. I know I lived in a rental apartment which was initially built in the 1990s to be a Condo, but because the walls were paper thin, individuals refused to buy it. So the builders turned what would have been a highly valued condo in today’s era into a rental property.

hen I go to Toronto’s downtown core, I see a potential problem in the near future, a lot of the small businesses are being forced out of Toronto’s downtown core because prices for leases are too high. People forget that the commercial lease space is market-based, and therefore you can’t blame commercial leaseholders for renting to the highest bidders, this is all well and good as long as the affordability is realistic in Canada’s major cities, which based on my analysis it’s not

Toronto is doing a decent job of hiding its homelessness problem, but I’m not sure how long it’s going to last and quite frankly don’t think there’s anything, any Prime minister can do about this unless they’re willing to end the CMHC experiment. The BoC and CMHC are working in tandem, as long as 5% down mortgages exists, it doesn’t matter if a schedule 1 bank is financing them or subprime bank is financing these speculators, the bottom line here is that a lot of properties are being built that nobody wants and one day eyes will be opened to it.

For now, what we have is a lot of noise on the municipal and Federal levels, both entities are to blame, but honestly, the people who deserve the blame the most are the voters who want something for nothing. Trudeau letting in these so-called economic migrants isn’t the problem, this problem existed a long time ago when Canada decided to grow the welfare state when Canadian politicians began price fixing and picking winners and losers to supposedly help the poor people who now more than ever can’t afford housing or rental costs. As I’ve stated it would be in Canada’s best interests to let this housing market crash sooner than later, I keep seeing new condos being built that aren’t meeting the demands of the population. If this issue isn’t addressed soon, forget a crash, we’ll be talking about an economic collapse. Consider reading the CBC article below.

Big city mayors call for emergency federal funding to deal with housing crunch – CBC

interesting times ahead