Speculative investment inflated Toronto housing bubble, says report -Apr 12, 2018

There’s something that’s beginning to happen in Toronto and the reality is it can not continue.

There has apparently been a dip in housing prices in the Greater Toronto housing area, meanwhile there’s been a rise in purchases of Condo, well it should be easy to see what’s going on here, but at the same time I can not blame the mainstream media for telling Canadians the obvious.

Now there’s something that should be pointed out here. First things first is that not all of Canada is experiencing a boom, the regions experiencing a housing boom and the apparent dip in housing prices is in Toronto and Vancouver. Now it should be noted that even if housing prices fell, as long as you’re not new into the housing market as of April 2018 you still have made a pretty good profit.

People or so called experts like to point out that the only housing boom is in Toronto and Vancouver, but that’s not the problem, the problem is not the housing boom the problem is credit. What people are not understanding is if there’s a housing crash or collapse credit companies, simply will not be here anymore. That’s what people aren’t understanding, this entire housing market is dependent on the derivatives market which is subsidized by taxpayers, who are already in debt. If the housing market in Canada even gets stagnant, it’s game over because for the most part they’ve lured all the suckers into the market.

The hard money, the Canadians who are not in debt, aren’t going to go into debt and those are the Canadians that are due for more interest on their money and that’s where the market is going to have to shift to and that’s a painful transition. It’s one of the reasons why I’ve been saying that this is not the 1990’s anymore when Canadians were savers, no a large number of Canadians are debtors now and with all this available credit so many people have been sucked in, and those that haven’t been sucked probably aren’t and when the market sees this, there’s going to be seismic shift that I know Canadians for the most part haven’t been anticipating. Now where I’m going with this is that like I said before 100 year Amortizations are already a reality in Japan.

100 year amortizations can happen in Canada, which can equate to a short term stimulus to the housing market once it becomes stagnant. But the real question is who will buy this type of mortgage? or will the market collapse before then? The government and the BoC have backed themselves into a corner, the housing market is what’s fueling credit into Canada. If that is no longer a reality all of those government promises, well they could be put at risk especially as the government grows and manufacturing jobs leave Canada. The job numbers came in recently and majority of the newly created jobs where government jobs. Government jobs are fed by the private sector, Government jobs also usually have better pensons. One of Canada’s top industries is banking, if that cash cow is ever put into question it’s game over.

Canada’s housing market didn’t crash when America’s did, even though that happened a lot of subprime credit companies operating in Canada left. When those subprime companies realised the credit market in Canada was out performing the U.S they returned and Canada has been riding that high ever since. Now the problem is if those credit companies get spooked again, by anything, what Canadians in debt don’t realise is that their options to obtain credit will shrink and here’s the biggie.

Speculative investors will have a small pool of lenders to give them loans and guess what happens then, interest rates rise. Who cares what the Bank of Canada does at that point, when this happens, the private sector will raise rates on their own and the only way for the Government to stop them is for the government to make concessions.

You might ask well that sounds great people already in debt will be out of debt right? Well it doesn’t work like that, debts will be sold off, possibly bought out, possibly from the big banks who will then sell them to smaller companies, who by the way won’t be in the business of lending out credit, they’ll be strictly in the business of collecting debts. This is the type of atmosphere that can cause depressions, not just economic, but mental, because it’s at this point where people in debt realise that they’re stuck and the only way to get out is by working there way out.

Homeowners whose mortgage is worth more than their house will sell for, well, they’ll have to take a loss, but really they’re not the ones to worry about. The people to worry about are the Speculative housing investors. They’re the real problem, since they don’t live in the homes or condos they bought and being that they’re stuck, they’ll be the people that will cause the most pain. Because they’ll want to unload their properties, cut their ties now, to get off the hook and it’s here where Canada’s housing market will see a bottom.

Forget Toronto and Vancouver for a second, I’m also talking about the other Canadians cities that have homes worth say $120,000, their housing values might drop to $90,000 and lets say they have $30,000 home equity loan will that won’t grow anymore, meaning people will no longer be able to use their homes as ATM’s. It’s all connected Canada and I’m warning you again, the housing market can not be stagnant and go not continue to go down in value, if it does there will be a collapse.