Canada Risks Creating ‘A Permanent Generation Of Middle-Class Renters’ – July 30, 2018,
every time I read an article about the real estate market in Canada, it becomes more and more obvious to my readers how right I’ve been when I said that prices in the Canadian real estate market can’t decline otherwise they will collapse. It’s hard for many people to see this, but because I worked in finance I was able to see this around 2012. I don’t have the ability nor will I act like I’m aware of how other housing markets around the globe are structured.
What I understand is the Canadian housing market and the regulations surrounding it. If you click the link below and read the Huffington Post article then return to my blog to read what I have to say it will be easy for you to determine your investments going forward because you’ll now see that the Government and the Bank of Canada have backed themselves into a corner
Canada Risks Creating ‘A Permanent Generation Of Middle-Class Renters’: Industry Group
The Donald Trump movement in the United States
President-elect Donald Trump created a new type of American voter. America first, this is something Canadians better pay close attention too. Because this America first and make America great again movement will outlive Donald Trump. Throughout history, there have been Political figures that created movements that outlived the individual for centuries sometimes. Donald Trump has been using simple language to explain complex issues and it’s coming to the point now that Donald Trump’s message might be the norm for future Republican and Democratic United States presidents.
Again let me repeat myself, Donald Trump’s message will probably outlive Donald Trump, which should scare the hell out of Canadian politicians as future U.S presidents will have a list of protectionist demands from the U.S Private Sector that all future wannabe U.S politicians will have to adhere too. Why is this important to Canadian real estate? Real estate prices remaining high are dependent on high paying jobs remaining in Canada. what does this mean for Canadian politicians? It means perks to the private sector while providing perks for the entitled.
Canada has been dependent on American presidents who are ignorant of the economic realities of maintaining an empire. Trump again simplified the economic message to his voters. America first, do you want high paying jobs well if other countries charge America companies a tariff we’re going to charge those other countries an equivalent tariff. Canada is one of the countries that has altered its free trade agreement with America. This is fine, however, Canada’s current dependence on America is substantial and there really is no reason that a Canadian company dependent on U.S customers won’t leave Canada for the U.S if tit-for-tat tariffs become the norm.
Business people like to know what their costs are, what tariffs do is they distort businesses balance sheets, tariffs can also fluctuate. One of the reasons a lot of items available in America aren’t available in Canada is because of our regulatory system. We’ve changed it to match our Canadian standard of living so many times and for the most part, it’s gone unchallenged by American politicians. What American businesses simply do is they stop sending us stuff, which of course makes prices higher and labor scarce for things that are in abundance in the United States.
Again this isn’t a big deal when it’s being ignored by U.S politicians, but Trump changed all of that and what this leads me too is higher real estate prices that don’t meet Canadian consumer demand. One of the bubbles I see in Toronto Canada is the Condo bubble. Most of the condos built in Toronto were not built with Canadian families in mind. Most of the condos built in Toronto were built with real estate investors in mind, domestic and foreign.
If you’re in Toronto and you go shopping for a 3 bedroom 2 bathroom condo, you’ll notice how scarce and expensive these condos are. what you’ll equally notice is how abundant and expensive 1 and 2 bedroom condos are. Expensive and abundant, expensive and abundant, expensive and abundant means that the market is in need of a serious correction.
The mistake made by the Federal government of Canada was subsidizing the real estate market, nobody talks about this anymore. what people forget is that the rental market is also subsidized, what’s that subsidy you ask? It’s called rental controls. So if you’re a builder would you build a condo? or rental housing? If you build a condo you pass the costs onto the real estate investors if you build rental housing good luck kicking bad tenants out of your building.
where the real estate collapse becomes more apparent is when you read the Huffington Post article. Middle-class renters. In order to attract middle-class renters, your city better have higher paying jobs. I’ve been saying it for years that economic collapse in Canada is going to be gradual, similar to Japan and Argentina. One day they’ll be crashes and every other month, hyper-inflation every other month, pension defaults every other month and economic bubbles everywhere.
I’ve also said that Trump is a blessing in disguise for Canada, regardless of how this trade war plays out America has changed, the world has changed and more and more people are coming to understand the disasters created by leftism and central banks. This movement isn’t going away and what Donald Trump did was he lit a match that may soon get embedded into the American voter. The next Democratic president of the United States is going to have to be wiser about the economy and American voters.
He/she is also going to get tested like never before even if a Democrat takes the white house, the world has changed, evolved and if Canada doesn’t take its medicine and allow this economy to crash now things are going to get a whole lot worse in the future.
Interesting times ahead.