Normalize Interest Rates & Get The Federal Government out of the Housing Sector: Investors now make up more than 25% of Ontario homebuyers – November 23, 2021
When Doug Ford ran for the premier of Ontario, he decided to apply free-market principles to the housing market not understanding that inflated home prices are a Federal government problem. Actually, maybe I’m giving Doug Ford too much credit, maybe he does know and doesn’t care, I’m not sure with these politicians, it’s strange to me that there are so many Canadians who don’t understand what’s going on with the housing market.
The Canada Mortgage and Housing Corporation(CMHC) and the Bank of Canada(BoC) are both federally owned crown corporations and both are working together to make sure home prices don’t fall below a certain threshold. The Canadian housing market did not crash when the U.S housing market crashed, yet here we are with near-zero percent interest rates.
Now, the truth of the matter is that once the Bank of Canada made the decision to bring rates to near zero, the CMHC should have 100% gotten out of the mortgage insurance business and left this looming disaster to any private sector entity willing to take on the risk, because as it stands today, the CMHC and the overall Federal Government are incentivized to prop up the housing market, so who can blame any investor for making the wise bet to buy a property at whatever amount they can qualify for?
Because deflationary prices are basically illegal at this point, debasement of the Canadian dollar is inevitable, so I personally expect that prices for EVERYTHING are going to continue to rise, which of course accelerates poverty in Canada and also will incentivize Canadian business to invest outside of Canada because although Canadians might see their purchasing power in Canada decrease, this might not necessarily equate to a lower Loonie in the forex markets.
If you can imagine, this could potentially accelerate Canada’s dependence on imports, but this is of course the prelude to economic collapse. I’ve been writing about Ontarios empty Condo problem since around 2014, and don’t take my word for it, do a search online, there are a lot of condos and homes for rent all over Ontario but their rental prices are ridiculous because, in most instances, the buyers care little about renting out the property, they’re just waiting for the price to go up, so they can sell.
At this pace, in my opinion, it’s inevitable at this point that prices, wages everything is going to go up and this will have a devastating effect on the middle class. The sad part is that this is an easy fix, that won’t be easily fixed. Normalize interest rates and get the Federal Government out of the housing market.
Now, I’m open to making an Ontario Mortgage and Housing Corporation(OMHC), Canada has universal health care, but distribution is left up to the provinces. If Ontarians are dumb enough to want a Provincial mortgage insurance corporation, well, let them do it. In B.C the idiot leftists Nationalized the auto insurance industry and now, their auto insurance is the most expensive in all of Canada.
Who in their right mind couldn’t see that an insurance monopoly along with a central bank monopoly wouldn’t cause this disaster. For the record, I don’t blame investors for buying up everything they can, it makes logical sense to do it because our idiot Federal Government destroyed the house MARKET in this country and created a housing monopoly
Investors now make up more than 25% of Ontario homebuyers, pushing prices higher, experts warn | CBC
Interesting times ahead
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