Another Condo Boom in Toronto: In the face of Inflation everywhere The Bank of Canada continues to reward MALINVESTMENT with abnormally low-interest rates – December 16, 2021,
I’m reading there’s another condo boom in Toronto, which sounds about right, based on the SHORTAGES problems, but who are the people paying more for these Condos, in an inflationary cycle like this? I personally believe flippers and real estate speculators make up the bulk of the purchases of condos, but I’m okay being wrong on that because it doesn’t really matter at this point because shortages are a serious problem in an economy void of a central bank. If there was no central bank, shortages would lead to higher interest rates.
Shortages of something equate to a market demand for something else. First and foremost, GOVERNMENT mortgage insurance plays a huge role in price appreciation for Canadian homes and condos, so without a central bank, Canada’s mortgage insurer would have to deal with fluctuating prices, based on fluctuating interest rates, but because the Bank of Canada(BoC) has decided who will be the winners and losers in the economy, theres little fear investing in real estate in Canada.
The likelihood is that your house or condo will appreciate in value because even in the face of “the everything inflation”, the Bank of Canada has no desire to normalize interest rates, at best it might raise interest rates a few basis points and will likely lower them again the moment something considered negative happens in the GLOBAL economy.
So it’s a safe bet that the Canadian dollar will likely be debased for the foreseeable future, which also by the way coincides with more draconian measures by the government because as you should know, government involvement in the economy prevents price deflation from occurring. I’m reading about a higher minimum wage price, well, yes, the government has to give the appearance that it has everything under control when it doesn’t because shortages are actually the first sign of a lower standard of living.
If your money buys fewer stuff or worst, if your money can’t buy some things, because they no longer exist in the economy via scarce labor or badly written regulatory laws, that results in lower quality of life. Higher priced condos because the government refuses to match its interest rates with rising inflation, is a clear sign that prices for things are going to go higher, but again this problem exists primarily because the crown corporations like the Bank of Canada, the CMHC, etc. have decided that certain economic groups in Canada shouldn’t be allowed to fail!
Interesting times ahead!