Clear Signs of An Economic Collapse: 32% of Canadian homeowners are ‘house poor,’ don’t have money left after paying house bills – July 20, 2021,
So, if you’re going to buy a mortgage in Canada, there are certain rules that must be met, at least that’s what I was told, making matters worse, I believe the home inspection industry in Ontario at least is dying because if let’s say there’s a bidding war for a property, desperate people will purchase the property “as is”.
When I was growing up a house was considered a money pit, it was even hard to cashflow a property because renters for the most part usually are destructive, in the modern era of near-zero percent interest rates, investing for cash flow has been replaced with a buy low, sell high mentality.
Because it’s almost a guarantee that property values in Canada will rise, but let’s imagine house prices in Canada stagnate for a decade, and let’s also imagine that wage and home price gap don’t align within that time frame? Even if interest rates remain low, it will be hard for most homeowners to keep pace with inflation, because you have to remember that if Canadians want to preserve the current welfare state that we have now, prices for goods and services are going to continue to rise.
But just like gas price, just because the price of gas goes up doesn’t mean the price of clothing will go up, or just because maintenance costs go up doesn’t mean, your wages will go up in the same proportion. If your wages don’t keep pace with the inflated price you paid for your home, you’d be banking on the entire economy deflating, while at the same time hoping that the cost to service your home go down.
We’re currently in an era of mortgage deferrals and CRB all of these government perks whether temporary or permanent are guaranteed to raise the cost of living, but a rise in the cost of living doesn’t necessarily equate to a rise in home prices because you have to remember, the bank will not consider UBI income. UBI or CRB will be considered the equivalent to a welfare check, thereby making the receiver a government dependent.
Welfare schemes have a way of collapsing an economy unexpectantly. When an economic collapse is looming, all the signs are there but because everyone is having a great time, nobody cares about the chance of a collapse. although some Canadians might not be feeling it, right now we’re living high off the hog and even the wording in the post below should terrify you.
In the post below, they’re basically trying to normalize stupidity, we all know this housing market makes no sense, as I like to remind the reader, the housing market already crashed, it was spared via debt deferrals and even with the free money for doing nothing, which by the way should equate to a LOWER COST of Living alongside the debt deferrals people are still having a hard time paying their bills?
What this should tell you is that if housing prices stop rising in value, only government theft disguised as Government intervention will prevent the Canadian housing market from completely collapse.
Posthaste: A third of Canadians feel ‘house poor’ but are ready to take on more debt as economy reopens | financialpost.com
Interesting times ahead