More deflationary Real Estate news in Canada: The BC Financial Services Authority finds condo strata market in B.C. is “unhealthy” – June 16, 2020,
So yeah, there’s a deflationary problem occurring in Canada while the private market is demanding more money for all the risk it’s taking. The main problem with a real estate bubble that’s financed by the central bank, the federal mortgage insurer, the municipal, provincial and federal governments is that as prices rise, it comes to the attention of the private sector that it can’t afford to cover all the insurance-and maintenance-related costs that come with the inflated real estate.
Does that not make any sense to you? If it doesn’t I comprehend why, well, sure there’s a period n which asset prices can continuously be propped up via socialist government policies, but you see as asset prices get propped up, so do government workers paychecks, as government workers paychecks rise, taxes rise, below is an example of the amount of different energy-related taxes that I know of that exist in British Colombia
Climate Change Social Justice Warrior, NDP Premier of British Columbia John Horgan – 36th Premier of British Columbia
Climate Change Taxes – Here’s a list of all the taxes people pay on a litre of gas in B.C.:
Provincial motor fuel tax (Metro Vancouver) — 1.75 cents
Provincial motor fuel tax (everywhere else in B.C.) — 7.75 cents.
B.C.’s carbon tax — 8.89 cents.
The B.C. Transportation Finance Authority tax — 6.75 cents.
TransLink tax (If you live in Metro Vancouver) — 17 cents, increasing to 18.5 cents on July 1 2019.
Transit tax (If you live in Victoria) — 5.5 cents.
Federal excise tax — 10 cents.
Finally, pay the five per cent Goods and Services Tax on top of the total price.
Now, if you’re unaware there’s a relationship between energy taxes and real estate because it raises the cost of living, because if when you’re doing construction, it will cost your business more in import materials to the construction site, the workers many of whom might be private contractors, who physically do the work also need a pay increase because all of their costs have gone up and lastly you have to remember that all of these taxes aren’t being paid in the here and now, it’s deficit-financed.
Now as real estate prices go up, private insurance companies have to insure the new appraised value of the property, and eventually there reaches a point in which insurance companies don’t want to take on that risk. Now, one thing I do know about British Columbia is that they’ve already nationalized auto insurance, could they nationalize strata insurance also? I don’t know, who cares!
What the story below is telling you is that something has got to give because the market is screaming deflation, but I don’t see austerity measures in Canada’s future, the NDP rules BC and the Liberals are in charge of the Fed, what I see is inflation, to keep this Ponzi scheme afloat and this is why for years now, the likely scenario I saw for the Canadian economy was a zombie economy!
