Toronto Real Estate Board inadvertently makes the argument to dissolve the CMHC – February 6, 2018

In an article that you can read below the TREB says stress test should be revisited, the argument being made by TREB is that interest rates won’t be returning to the current stress test levels anytime soon and well in order to keep the Toronto real estate credit market booming they have to find a way to get more suckers to buy into this market, which as I’ve been saying is primarily based on speculator demand.

TREB says stress test should be revisited – The Canadian Press

I’m sure Ontarians know for the most part that the real estate lobby is huge, it’s been reported that they keep in touch with Doug Ford and Doug Ford whose a supply management guy is receptive to lobbyist groups he deems worthy of speculative capital. So, clearly what’s going on here is a last-ditch attempt for the real estate lobby groups to save their own asses. At this point, the writing is on the wall, and what these lobby groups aren’t understanding is that the numbers aren’t making sense anymore.

There really is no consumer demand for condos, the demand for condos which is beyond obvious by now is based on speculative demand, the real estate flippers, the unsophisticated real estate investors who think they’re purchasing a condo property for cash flow, you know all the morons that read those real estate get rich quick books. They along with the foreign capital looking for a place to park or hide their cash are using Toronto and the GTA to hopefully build their nest eggs.

The proliferation of Airbnb and other get rich quick real estate based scams are all over the GTA now, I’ve been writing about this stuff for years. Sure the government and the BoC can lower interest rates and pick winners and losers of the real estate market, however, real money, hard money, money based on actual labor, taxable income, that money is disappearing, it’s drying up and as I’ve been stated over and over again, Canada will soon be faced with either hyperinflating the Loonie or allowing it deflate.

Sure, Canada can go the hyperinflation route, but costs for imports will rise, the real cost of labor will also rise, Canada already has a brain drain problem, that too may rise. The deflationary road is what I recommend, this road is actually preferable for the TREB, this road should also get CMHC out of the mortgage insuring business. Because let’s be honest here if the Toronto housing market is booming, why does it need training wheels? If CMHC is needed, it shouldn’t be needed in Toronto or Vancouver, because those markets are apparently booming right? Booming like Liberal New York where no such equivalent on the federal scale exists?

So how about only putting CMHC in less developed areas? Apparently, all the upper-middle-class people from all over the world are coming to Toronto, I don’t have a problem with this, but if these people can manage these 400-900K I agree with the TREB revisit the stress test, let’s revisit the need for CMHC in major cities? The reason the stress test exists is that if there’s a crash the Canadian taxpayer is on the hook. That’s the deal the Crown Corporation known as the CMHC made with Private lenders who give loans to unsophisticated mortgage purchasers.

So if TREB wants a free market, I’m for it, let’s at the very least get the financial regulators to step aside while the big bosses of real estate inflate the market to their heart’s desire. Let’s stop the madness of allowing the BoC to use the housing market as a means to suppress interest rates. The Canadian housing market never crashed to the degree the U.S housing market did, so why is the entire Canadian population being held hostage with lower interest rates to appease what is now an entitled group in Canada? If you can afford a near million dollar mortgage, you’re definitely not a poor person, yet poor people are being straddled with higher rental and lease prices?

Mortgage stress test needed despite hardships, says bank regulator – TheStar

If you know anything about a free market system or at least a free market system not based on regulations that create price controls, you’ll see with greater ease why the Private Sector would have solved this housing problem years ago. People forget that prior to federal and provincial regulations what was happening were Charities, Churches, non-profit and for-profit sophisticated entities were slowly but surely fixing Toronto’s housing problem. Now, the problem with the Private Sector fixing problems is that if for example, you’re a tenant who rented in a lower-priced Christian rental apartment, you’d be expected to respect Christians in these establishments.

If lets for argument’s sake say Goodwill built a Co-op rental apartment building to keep maintenance costs down tenants would have to contribute to the cleanup and maintenance, this could be a drag for people who just came home from work and now it’s their turn to sweep the hallway. Again let me point out that most homeless people have mental health related issues, many are also young people who don’t like living under mom and dads strict rules. Let’s call this stuff for what it is and not the narratives special interest groups want you to believe.

The private sector had fixed housing problems in Toronto a long time ago, but humans are humans, and humans gravitate to freedom, which is why the so-called poor want the government to build housing, if you go to most metro housing projects, you’ll notice that a lot of the tenants vandalize those government apartments without remorse, let’s be honest, why shouldn’t they? They want to be babied and the Leftist government obliged and now that they have 1 demand met why not reach for more demands, why not ask the government to solve all of Toronto’s housing needs and this, of course, made its way to the federal level and because maintenance costs are expensive, someone came up with the idea to change CMHC. So now CMHC assists in mortgage insurance.

The problem with CMHC being Federal is that it undermines municipal laws, municipal laws like rent controls. I’m against rent controls but they exist and because they exist most developers opt to build condos instead of rental apartments, every government knows that the government doesn’t want to house the poor because Public servants tend to unionize and unionized workers are expensive, not mention public servants in certain sectors go home with pay once their shifts are completed and these public servants also demand high wages and great retirement plans. Private Contractors who fix public property are also highly compensated, so you start to see why Politicians tend to side with CMHC.

Well, my dear reader, this is coming to an end, I’m not sure when because TREB makes a good point Canada is a safe haven for foreign capital, why throw that away? The real issue is that the Canadian consumer is about to tap, it’s already happening, but at this point, I stay out of that stuff, my only reason for writing these posts to allow my readers to understand what’s creating this mess. If TREB wants real estate to existing as a free market I’m all for it, but CMHC which will have to extract money from Canadian taxpayers has a lot to lose if this market deflates, so if the TREB has a problem they should request the CMHC be dissolved in Toronto.

Interesting times ahead.