The Bank Of Canada and The CMHC are creating a massive homelessness problem, How long will this artificially low-interest-rate scam last? – March 3, 2021,
The Canada Mortgage and Housing Corporation and The Bank of Canada have been working in lockstep for decades, making sure that the overall housing market in Canada doesn’t deflate. The CMHC has a mortgage insurance component to it, which requires that housing prices in Canada don’t plummet, which used to happen when Canada had more of a housing MARKET.
Currently, Canada doesn’t really have a housing market, we have a housing bubble, that grows and grows like a blob. In Toronto, I believe someone did a study in which it appeared that 40% of the condos in Toronto appeared to be EMPTY which defeats the purpose of the Canadian Government using a crown corporation to help a certain demographic of Canadians to become homeowners.
Nearly 40% of Toronto condos not owner-occupied, new figures reveal | theguardian.com
Now, in order to understand why this madness exists, is to understand Rental controls and why it makes more sense for a developer to build a condo instead of providing rental housing. First off, because there is no floor, buying a condo in Toronto, appears to be a safe INVESTMENT, so whenever a condo developer comes up with an idea to build a condo, everyone and their cousin’s neighbor wants in on the deal.
In Canada, a lot of people have completely abandoned the notion of buying a property for cash flow, what we have in the Toronto real estate market are flippers, which are people who buy now, for the price inflation later(buy low and sell high).
Now in a market economy, most of the people who qualify for these condos, wouldn’t qualify, because there would be a chance that interest rates could rise or that the market could crash, but because the Bank of Canada has signaled that it will keep interest rates low for the foreseeable future, betting that the Toronto housing market will inflate is a pretty safe bet.
The problem with this however is that in the real economy the cost of living is artificially high which hurts the poor. Rental housing isn’t being built to keep up with demand and people are paying inflated prices for condos which means in order for these real estate investors to use their tenants to pay their mortgages and Strata fees, they’ll need to raise their rental prices, and because of the costs involved in being a landlord, via municipal governments, most condo owners, deem it best to hold and flip or use their property as a means to borrow more money for another project, this, of course, equates to the poorer people having fewer options for housing.
Now, I’d like to point out that nobody has the right to live in Toronto. If you can’t afford to live in Toronto, you should move, but I wrote this article so that people comprehend that this homelessness problem in Toronto, is actually the Federal Government’s fault. Both the CMHC and The Bank of Canada are Federal Crown Corporations that are above provincial jurisdiction and their influence on Canada’s housing market is leading to the homelessness problem.
It’s unfortunate that Canada’s progressive culture, most likely won’t point the blame at them, because most progressives deem ‘we’ on the Austrian economics side of the debate to be evil, selfish, and greedy!
Toronto’s encampments and homeless crisis: a view from the ground | thestar.com
Interesting times ahead!