The Toronto Housing Market will Never Crash: Toronto area housing sales up 24.3% in July, lack of supply – August 6, 2019,

When a child learns to ride a bike, you take the training wheels off right? Well, can someone explain to me why the government via CMHC needs to insure mortgages if the homeowners and developers are refusing to lower their selling price? Usually, the government steps in to stimulate the economy, doe the Toronto housing market really need any stimulus? Not only does the Government offer homeowners insurance, CMHC now offers a First-Time Home Buyers Incentive (FTHBI). What’s a First-Time Home Buyers Incentive you ask?

How the FTHBI works(via: lowestrates.ca)
The program will be administered by Canada’s housing agency, Canada Mortgage and Housing Corp. (CMHC), which will pay 5% of the purchase price for an existing home, and up to 10% for the value of a new home, in exchange for an equity stake. Once the homeowner sells, they’re obligated to repay the CMHC. To learn more click the link below:
https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2019/making-housing-more-affordable-first-time-home-buyer-incentive

So yeah, because the government can’t force homeowners or developers to lower their selling, price, the government thought it wise to keep housing costs low by becoming a partner in mortgage purchase? This kind of insures that it will be hard to crash the housing market in Canada, doesn’t it? I mean if the government is involved in the mortgage market will they allow the market to deflate, or is it more likely that housing prices will continue to do what they did in July and inflate.

If you were a homeowner and the government was propping up the mortgage market with Insurances, providing a safety net for investors, where’s the incentive for you to sell your home for less? Buy and hold, the government is even helping to lower payments, so if you’re a homeowner and the government is assisting in payments, why not raise your selling price?

Oh, There’s a stress test you say? Well, last time I checked when the real estate lobby has been fighting like hell to change the stress test, an argument could be made that FTHBI was created because of the stress test. As I’ve been pointing out Doug Ford is very submissive to the real estate lobby, I don’t think Rob Ford understands the role CMHC plays in incentivizing condo development over much needed rental housing from the private sector, but hey, I’ve only been writing about this stuff for 5+ years, I’ll just let this craziness play itself out, because people are making money and obviously they’re blinded by the profit motive. If you think the housing market will crash, I’d like to remind you that both the CMHC and the BoC are Crown Corporations (State-owned enterprises) both have the ability to inflate their way of deflation, what will be interesting to watch is the value of the Canadian dollar.

The CMHC, as well as the BoC, are huge contributors to the Federal Government, if include Crown Corporations as public sector workers, the size of Canada’s government is massive, a lot of government employ paychecks and defined pension plans are on the line if there’s a deflationary economic crash. Can Canadians really handle austerity measures? 😂😂😂 I’ve even listened to so called Conservatives who want to grow the size of government! Until the Canadian economy comes to a grinding halt, my bet is that housing prices continue to rise, the real estate lobby will make up whatever buffoonish story they can to justify it.

Toronto area housing sales up 24.3% in July, prices rise due to tighter supply 😂😂😂- TheCanadianPress

Interesting times ahead