Just What the Fuck is Going on with Canadian Housing?
Just what the fuck is going on with Canadian housing? Nevermind that... what the fuck are our policy makers doing about it is what really bothers me...
It is becoming more evident recently that Canadian real estate is finally falling off its high horse in a big fucking way.
The goat fuckers in Ottawa are indeed freaked about the whole ordeal via trying to intervene in ways so we don't get a US-style crash... If we do so happen to miraculously dodge, Matrix-style, the impending massive 'de-cocking' of real estate in Canada as we know it now or "soft landing", are we still gonna end up the way the US did anyways despite our government's asshattish precautionary measures ie. like Japan??
An interesting read from Rabble.ca:
The numbers are becoming increasingly clear; the bloom is off of the Canadian real estate bubble and boom.
Among a variety of indicators, sales of condos in the second quarter of this year in Toronto have fallen by half and a record number of units were left unsold. In Vancouver July residential sales were the lowest for any July in ten years and fell 11.2% from the month of June.
While prices are not dropping yet, the fact that commentators from the business and real estate communities themselves believe a 15% downward adjustment in prices is imminent means that we can likely expect a greater decrease. These are, after all, people whose best interests are served by minimizing any potential housing market panic.
The increasingly interventionist actions being taken by the Conservative government and Finance Minister Jim Flaherty to dampen the market, counter-intuitively if one does not really understand what is behind the real estate market boom of the past few years in the first place, also shows that the powers that be are worried. Very worried.
And they are worried for good reason. It was the government itself that facilitated the creation of the overheated market and it is the government that is ultimately on the hook for the tab should an American style meltdown occur. Which means that, in the end, you are on the hook.
The government has chosen the most bank friendly model of "intervention" in the housing market; they don't build affordable housing for all, rather they allow the banks, at no risk to themselves, to put citizens into unsustainable levels of personal debt to own what is completely unaffordable housing.
If a real housing correction occurs, and if it results in an entirely predictable and at least somewhat likely wave of foreclosures and defaults, and if the government is forced to cover even a relatively small proportion of the near $600 billion in insured mortgages, the cuts of recent federal budgets will look like happy times with hindsight. The economic "side-effects" will also be devastating.
Even if this is a bullet that we do manage to dodge, Canadians need to ask themselves if the role of their government and their taxes is to fund social programs, health care, direct housing and infrastructure expenditures, or if it is to put all of these necessities at risk by removing actual market and risk factors from the mortgage business for the big banks by insuring and taking on liability for their loans and the lifestyle of a certain segment of the population, potentially on the backs of all Canadians.
Full Article here.