The Supposed Canadian housing market that’s apparently based on demand is being Exposed as a HOAX, thanks to College Kids! – April 16, 2019,

The real estate lobby in Canada is rich and powerful and ever since the creation of CMHC a Crown Corporation being an insurer of mortgages a pandora’s box of financial wizardry has emerged in Canadian real estate, namely the parts of the country that have larger demand. Recently a new tax on empty homes has hit Vancouver, personally, I’m against the tax, but the reason that they had to create a tax revolves around this notion that the government using a Crown Corporation should help Banks qualify people for property loans by granting the borrower insurance with money backed by ALL Canadian taxpayers.

In all of this, the people who often get screwed the hardest are renters, it’s important to understand that in 1999, the National Housing Act and the Canada Mortgage and Housing Corporation Act were modified, allowing for the introduction of a 5% down payment. If you’ve looked at any housing chart you’d see inflation in housing began to rise drastically once this act was passed. Something to comprehend, CMHC is the largest Crown corporation in terms of assets with some CA$252,107,000,000 as of 2015. Why is is this important you ask because there’s an assumption that CMHC is only there to assist individuals with 5% down payments? No, that’s far from the truth and when you fully comprehend that the Canadian housing market now has an access of speculators who use Canada as a place to park cash, you start to see why places like Vancouver don’t have a limited supply of housing, instead have housing and commercial real estate market based on parking cash.

In a free market system, you can’t build housing especially residential housing that isn’t based on the demands of the local population. However, in a system where a government agency gives insurance to people who’d otherwise not qualify for a mortgage purchasing these people, who typically know little to nothing about the risks of being a home or condo owner, will typically accept anything the builder is offering. To better explain what I mean, in the early 1990’s developers had a hard time selling Condos, why? Because similar to now, Condos were cheaply made and if a person was going to put a 20%+ down payment they’d DEMAND more, they’d demand more space, they’d demand better walls, they’d in many instances demand that the condo feel like a house, they’d demand for better parking they’d make more demands, which in many instances would make more developers consider building rental housing, or in the instance of enough condo units being sold, they’d turn the condo into rental housing. This was the market, and the truth is if rental price controls didn’t exist, Canada wouldn’t have a housing shortage.

Even in the 1990’s rental housing places would offer you sometimes 3 months free if you had good credit. Everything changed when this push for 5% down occurred, when the government mortgage insurance became the norm, Condo developers knew that building rental housing was a stupid move and so they began building condos and townhomes and because more people qualified more people bought, this, of course, fueled the real estate speculation, which of course means that prices go up, because if there’s a 5% down payment to get into the home and interest rates drop, more people qualify, which means as a home or condo owner you can raise your selling price, because magically via the government you have a lot more qualified money moron homebuyers, many of whom may actually buy a home or condo for someone in a foreign country.

Now if you listen to these real estate scammers, they’ll often go on the news and say rent prices should be based on what they pay for their mortgages, so imagine if a real estate speculator puts 5% down a mortgage meaning that his or her mortgage and potentially their strata fees are higher, they’ll pass those costs onto renters, now when actual rental housing companies notice these price inflations, they raise their prices too, being that because of CMHC and rental controls there’s little incentive to build new rental housing, guess what doesn’t happen? Rental housing doesn’t happen, maybe a building here or there, but not enough to keep up with demand, adding to this disaster is that condo developers build everywhere, consuming space and because it’s a condo and not a rental unit, it’s a good place for an Afghani pop artist to park his money!

This is why the government should never stick its nose into the markets, because of CMHC the pricing mechanisms in Canada for ousing are out of whack, it should be noted also that there are large parts of Canada that haven’t felt any price inflation in real estate and you know why? Because the truth is there hasn’t been any reason for it. It’s not like hearing about the Toronto and Vancouver markets exploding with brand new higher paying jobs. WAGES ARE FLAT all across Canada, the only people making a large sum of money are people who work for the government, which is wy if listen to the news, we’re all being brainwashed to think INFLATION IS A GOOD thing. You see because most government jobs keep up with inflation. Doug Ford recently tried to put a cap on public sector spending and he’s being demonized for it. But yet, nobody mentions CMHC.

It’s not like the CMC experiment worked? It hasn’t it’s been a huge disaster, debt levels have skyrocketed, if CMHC is a generating profit, which is something that’s not supposed to happen if you’re a government agency, shouldn’t we be talking about making it 100% private sector owned? Now, tis story that you can read below is exposing the real estate market in Canada. Toronto is FILLED with empty condos, they’re all over the place, Toronto is filled with empty homes, typically you notice an empty home in Canada faster because it’s often not well maintained. What I’m writing is no secret and this problem wouldn’t exist if CMHC didn’t create it. Now, what’s the downside to a free market-based housing system? PRICE FLUCTUATIONS! The reason why many people hate a free market system is that price come up, prices go down, prices go up prices come down, it’s a wave.

This market is being propped up and the scary thing about these markets is that they usually nose dive and if they’re not allowed to nose dive the cost of living will eat away at your standard of living. The very important thing to understand is that wages have not risen, Why ave wages not risen? Because in the free market the cost of living has actually gone DOWN, which is the equivalent of a wage increase. The problem in Canada is that our government has gotten bigger and most government jobs have pay that keeps up with the cost of living. I’ve often written about Argentina and why their currencies crash over and over again. In Argentina, they have a HUGE government, and no matter what currency they use, their huge government consumes it. As CMHC raises the cost of living and the Private sector in Canada shrinks, we as a country are going to run into some serious price control related problems.

YOU’VE BEEN WARNED CANADA!

College kids are living like kings in Vancouver’s empty mansions – CBC

Interesting times ahead