Canadian dollar rising: But the numbers don’t match the value, commercial real estate crash and Justin Trudeau’s ongoing attack Alberta’s oil sands – May 8, 2020,
When you say the words real estate in Canada, most Canadians imagine Residential real estate, in my personal opinion, the residential real estate market will take a long time to crash in Canada, because the Canadian Federal Government is on the hook for it.
Two crown corporations the Bank of Canada (BoC) and the Canada Mortgage and Housing Corporation (CMHC) in modern times exist to assure Canada’s residential housing market doesn’t crash, because if it crashes, a lot of mortgage holder are underwater meaning their homes will be worth on the market less than their mortgages and qualification for a mortgage in Canada has a very high barrier to entry, so these forces unless changed would result in major deflation of the Canadian housing market and ultimately a decrease in tax collection.
Warning: Canada’s Real Estate Market Could Plunge 33% | Fool.ca
I’m not a socialist by the way and I’m against the existence of the government being involved in mortgage-backed securities or mortgage insurance, but it’s there, but where the government can’t extend its tentacles is commercial real estate, actually the government can get in involved in commercial real estate, the difference with commercial real estate is that business people purchase commercial real estate with the intent to make a profit.
In Toronto as an example, a lot of commercial real estate was hoping to be purchased by condo developers pre-COVID-19, why? Because the government propping up the residential housing market has completely distorted the pricing mechanisms in commercial real estate.
Furthermore, there are a lot of idiots in Canada’s commercial real estate who now own a lot of property and have no clue or desire as to how to make their commercial property profitable. Real estate benefits from lower interest rates, which allow idiots who would otherwise have to sell, be able to hold commercial properties a lot longer via government printing money.
Anyway, during a deflation event, cashflow in commercial real estate is drying up quickly and worse than that price inflation is less likely without Government assistance. Not sure when, but you’d be wise to pay attention to the commercial real estate market
In regards to Alberta, the Liberals want to kill the oil sands, I don’t think it’s going to happen but what I do think is going to happen in the long term is Trudeau is going to run into a cash flow problem, that Alberta used to have the capability to solve.
Because a lot of other countries are printing money, what Justin Trudeau’s cabinet fails to realize is that printing money should match economic policies, so as an example, Donald Trump cut a lot of regulations in the United States, so the U.S recovery, if Trump is president, will be faster than most people expect, in Canada however Trudeau has done everything in his power while printing money made everything more expensive for businesses.
Trudeau has added on regulations during COVID-19 not cut them, if you’re a Liberal it’s smarter to add regulations during the prosperous times, not the deflationary times. I can’t say I know when it’s going to happen, but Canadians should be aware, I think the first reality for Canadians is going to happen if there are shortages of essential items.
Trudeau would be wise not to allow this to happen, because this is when people will start to comprehend the damage Justin Trudeau has done to the economy and unfortunately when it comes to Canada, a lot of Canadians have no comprehension of a free market, so if there are massive shortages of essential items, the assumption by most Canadians will be that Justin Trudeau can easily solve it!
This will be the period that will be hard for most Canadians to swallow because as I’ve stated for years now, technology has made a lot of government services obsolete, which for me is an indication that the market wants AUSTERITY MEASURES, but you see, entitled people destroy entire countries and I’m not sure what will happen in Canada when it becomes obvious that Canada has to shrink the size of government!
Interesting times ahead!