Will The Justin Trudeau Ban on foreign homebuyers Cool The Canadian Housing Market🤷? If Interest Rates Go Up Along With Consumer Price Inflation, then what? – April 9, 2022,
Can we cut the crap for a moment, and get to the reason why most people aren’t impressed when an INDEBTED government says it’s going to do something about housing prices. Justin Trudeau in 2021 due to consumer price inflation got a windfall of cash, unfortunately, this windfall of cash isn’t paying down the debt, instead, Justin Trudeau is using this windfall of cash to increase social spending.
Because the Bank of Canada is a Federal Crown Corporation, one has to assume that the Bank of Canada is there to do whatever it can to keep the Federal Government solvent. Buying Trudeau’s debt, keeping interest rates as low as possible, and allowing the Canadian consumer to experience consumer price inflation for the foreseeable future appears to be the strategy of the Bank of Canada.
So excuse some of us if we’re not impressed with more government intervention into the housing market. The housing market is merely the beneficiary of a deficit reliant government, that would otherwise be bankrupt if it didn’t have such a dovish central bank. Pass the governments deficit spending costs onto the Canadian working-class consumer, after all, if a large enough chunk of voters are reliant on government Welfare for their survival, consumer price inflation isn’t that big a deal, it’s not like voters are dependent on government welfare are going to vote away their subsidies?
Furthermore, whether it’s The Conservatives or the Liberals, neither Party is going to tell voters, in order to fix the housing market interest rates have to be normalized? Once you comprehend that artificially low-interest rates are the problem, you start to comprehend why all of these housing schemes are merely window dressing.
Another concern for Yan is the exemptions within this federal plan. Permanent residents, foreign workers and students will still be exempt.
“The ban itself has a lot of loopholes. It has a lot of openings through which I think doesn’t necessarily deal with the issue of foreign capital, which is more of what is shaping real estate in Canada, as opposed to foreigners.
Let’s get back to why interest rates are artificially low, in 2007-2008 Barack Obama bailed out Wall Street, now when Barack Obama bailed out Wall Street, Canada’s housing market was doing fine. The only thing that happened in the Canadian housing market was a few lenders got spooked and exited the Canadian lending market. The then Prime Minister Stephen Harper who had done a relatively good job with the economy up until that point either allowed himself to be corrupted by the Real Estate Lobbyist or he simply wanted to get more votes?
Because if we put Stephen Harper in his proper context, first and foremost he cut the GST and he was paying down the debt. So why then did Stephen Harper do everything in his power to get Mark Carney out and put Stephen Poloz in? I can’t answer that question, what I do know is Stephen Poloz was possibly the worst Governor in Canadian history, he lowered interest rates UNNECESSARILY, I remember comparing Canada’s interest rates to Australia’s interest rates at the time, and Canada’s rates were noticeably lower.
Long story short, people tend to forget Justin Trudeau ran on using artificially low-interest rates to go a spending spree. Sure Trudeau won the 2015 election in a landslide because of Pot legalization, put to be fair, Justin Trudeau did run on expanding deficits. Where Justin Trudeau has been a complete failure has been liberty and freedoms, there’s nothing “LIBERAL” about Justin Trudeau when it comes to liberties and freedoms, but whenever I write about Justin Trudeau, I like to remind readers, that even the Left Wing media, way back in 2014-2015 stated openly Trudeau’s weakness was the economy.
My main concern with Trudeau is that he keeps coming after freedom of speech, freedom of expression, and freedom of movement, but his economic policies, for me are “meh”. You get what you vote for, if you imagine you can get big governemnt for free, that’s on you, I can’t cure stupid.
Regarding housing more big government to solve a problem big government created? How am I supposed to address that? Will this foreign home buyers ban work? I don’t think so, I’ve talked to people involved in these complex schemes, and the Federal government is going to have to do a lot of chasing people around. I believe Justin Trudeau expanding the RCMP’s role to find people involved in money laundering, which I also believe revolves around housing affordability, but this problem is so rampant, that to discover what’s going on is to point the Canada Mortgage and Housing Corporation(CMHC) and the Bank of Canada(BoC) as the root causes of the money laundering.
This is no secret, in the United States, most Democrat-run States have a lot of the housing problems Canada’s Federal government created, the more involved the government gets in housing the more certain entities will be granted special favors, there’s this myth that people have, in which they imagine the government as the good guys, no, government officials are often the reason for the corruption.
If you’re a lawmaker or you’re writing the laws, there will be loopholes to a law, there have to be loopholes to a law, special exceptions, permits available to certain groups of people, furthermore, the government can’t tell a person what price to sell their home for. There are a lot of financial institutions in the Canadian market, that will lend to a buyer because they have a large enough downpayment, which alone makes the banning of foreign homebuyers null and void.
Hiring an emissary, benefits all parties in this artificially low-interest-rate environment, the emissary gets into the housing market, with how things are set up now, the property value goes up the emissary, may soon be able to purchase a house on their own, and the foreign home buyer also cashes out. Typically these foreign homebuyers own SEVERAL properties, using a very similar scheme, and this was Pre-Trudeau’s new law.
When Britsh Colombia and other countries did this, foreign buyers figured out how to get around it, this is not complicated, once people understand that the likelihood of the housing market being bailed out is very high, they take more risks, furthermore I have to remind the reader of what banks and financial institutions did with mansions when the housing market in the United States crashed.
Do you know that a lot of banks didn’t even foreclose on Mansions when the U.S housing market crashed? Do you know why? Because they would have had to write of BILLIONS of dollars worth of debt, which could have triggered another debt crisis. The blueprint for foreign homebuyers is already out there, the problem is interest rates and because Trudeau’s schtick revolves around vote-buying, I personally don’t see an aggressive rise in interest rates anytime soon, meaning that what comes to mind for me when I read about a 2-year ban on foreign homebuyers-“meh”
Interesting times ahead!