CMHC says Canada’s housing industry is still highly vulnerable to market instability – April 26, 2018

You can read this article in full by clicking the link below:
https://toronto.ctvnews.ca/cmhc-says-canada-s-housing-industry-is-still-highly-vulnerable-to-market-instability-1.3903721
Well the CMHC appears to be signaling that the instability is linked to not enough supply to match demand. My position is that there’s an abundance supply, but there is more incentive for developers to build condos and less incentive to build rental housing, so whats actually happening in Toronto as well as Vancouver is real estate developers are building condos and being that people with faster access to capital can purchase those condos first, that what happens and then they flip those condos for a profit which artificially raises the profit and those that buy the condos to rent them out actually help to raise current rents in the areas as well as stop rental units from ever being built.

Using CMHC the federal government of Canada has actually created a disaster, that if exposed will collapse the entire real estate market in Canada. If you were a developer would you build a condo or build a rental apartment building? In the 1980’s and the 1990’s there was balance, and the only imbalance came when rental controls were created. Rental controls are bad enough but what made the problem worse was the CMHC becoming an insurer of high risk mortgages. The moment this happened, the moment the CMHC began protecting the housing market real estate developers started to see less incentive in building apartment buildings, but what nobody ever imagined when the CMHC was created was interest rates falling to near 0%.

When the U.S housing crash happened Canada also lowered it’s interest rates, mind you housing prices were going up despite near 0% however what this low interest rate did was it made Canada even more protectionist, because the reality was there was no reason for the BoC to lower interest rates in the first place. The Canadian housing market never crashed and the truth is, it wasn’t until a few years later that Oil prices fell. Basically the BoC created a monster and now, it will only take investors to wake up to realise the mess Canada is in.

It’s really bad people, I mean it’s extremely bad and I have to call it for what it is. A lot of the disasters in the housing market happened under Stephen Harper’s watch, Harper became obsessed with getting reelected, and started playing the Liberal game of offering people free stuff. Nobody plays the offering people free stuff game better than Liberals and basically that’s how Trudeau won. The worst part of Trudeau winning in my view is that Canadians the swing voters forgot what being conservative was all about. Now that Trudeau’s government has been wasting taxpayer money giving away “free stuff” it maybe an uphill climb trying to explain to the entitled why they should be conservative in any way.

Now I can’t blame the CMHC which is a taxpayer funded crown corporation for looking out for it’s best interests. But I do think they’re the main cause of this problem.

Interesting times ahead.