Meet Malcolm and Galen. We know they’re a couple. They are young. And they bought a house somewhere in Canada they apparently can’t afford.
Let’s have Chrystia tell the rest of the story…
“As a result of elevated interest rates, they’ve seen their monthly mortgage payment increase to more than $3,000. After several months of higher payments, Malcom and Galen began experiencing financial hardship, and started drawing on a line of credit to pay for everyday expenses,” the finance minister says (via her Economic Statement).
So what happened when the Bank of Canada jacked interest rates to cool the economy, thrash inflation, weed out those who borrowed too much and attack the inflated price of housing? Were M&G, in ‘financial hardship’ encouraged to sell the now-devalued home they could only carry with an ultra-low loan rate, or take in a boarder to help with cash flow and create more rental accommodation? After all, isn’t that what we all want? More housing spaces? Cheaper homes?
Nah. That would be so… Poilievre. Instead, let’s bail these kiddos out.
She continues…
“Consistent with the new Canadian Mortgage Charter, their bank suggested a temporary increase in their mortgage loan amortization period, which decreases the amount of principal they pay but lowers their mortgage payments by $400 per month,” explains Chrystia. “Malcolm and Galen are able to stay in their home as a result of these lower payments, giving them the time to develop a plan to restore the amortization to its original period without the stress of losing their home.”
This is the sole example Ottawa, and our deputy PM, gave yesterday of how the new ‘Charter’ would work. It defines, extends and amplifies the mortgage ‘Code’ contained in the March budget. This time it’s serious. It will be regulated by the bank cop, OSFI, and the big lenders will have to play ball or face unpleasant consequences. The avowed goal is to wipe away the effect of those gnarly interest rates hikes and ensure real estate stays unaffordable.
This “builds on the government’s existing guidance and expectations for how financial institutions are to work with Canadians to provide tailored relief and ensure payments are reasonable for borrowers,” says the statement. At the same time Ottawa is blowing billions and billions more to construct subsidized rental housing and spanking homeowners who rent out on Airbnb. In short, the job of making real estate cheaper for young couples to buy has been left entirely to the Bank of Canada. Yes, the CB that Chrystia’s new Charter is designed to kneecap.
So far the Charter does not exist as a set of regs. Presumably that will come. The government says it expects folks like M&G to “receive fair, reasonable and timely mortgage relief”, which would include extending amortizations to lower monthly payments, the waiving of mortgage break fees and letting people switch lenders upon renewal without having to pass the stress test (unless they have an uninsured mortgage (more than 20% equity). The mortgage lobby is calling for all renewers to be exempted, by the way.
“From my perspective, the charter is one of the most important things that we’re putting forward today, because I really recognize that with interest rates having gone up very quickly, there are many, many Canadians who are … concerned about being able to afford to stay in their own homes,” Freeland said during a media scrum. “What we’re saying today is we understand this is a challenging situation and we are here to help.”
Here’s how she X’d about it.
The federal goal, she says, is to ensure people keep their homes despite rising interest rates. And the Charter would ensure that happens by instructing the banks to subsidize owners, tailor solutions for them and, at all costs, prevent defaults, forced sales or hardship. “These measures will support more Canadians through the temporary financial stress caused by elevated interest rates and help them stay in their homes,” says the economic statement documents. “The federal government will continue to closely monitor financial institutions’ implementation of and compliance with relief measures.”
And here are the specifics of ‘what Canadians should expect’ released by the Department of Finance:
- Allowing temporary extensions of the amortization period for mortgage holders at risk;
- Waiving fees and costs that would have otherwise been charged for relief measures;
- Not requiring insured mortgage holders to requalify under the insured minimum qualifying rate when switching lenders at mortgage renewal;
- Contacting homeowners four to six months in advance of their mortgage renewal to inform them of their renewal options;
- Giving homeowners at risk the ability to make lump sum payments to avoid negative amortization or sell their principal residence without any prepayment penalties; and,
- Not charging interest on interest in the event that mortgage relief measures result in a temporary period of negative amortization.
Here’s the question: should the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble? Or is it best they deal with the consequences of their actions? Should we let high rates do the job – all on their own – of solving the housing crisis? And should Chrystia, like, mind her own business and just fix the economy?
Asking for a friend.
About the picture: “I was turned onto your blog 10+ years ago by a friend/co-worker and haven’t looked back,” writes Erin. “Thank you for your sage advice, clever wit and sarcasm. I’m a single 40 something female and thanks to abiding by your recommendations (for the most part) I can happily say I’m well above the average line when it comes to my savings/investments. Thank you for your daily toilings from one of your loyal blog dogs. Compulsory suck up complete. Please see attached requested dog photo. This is Finnegan. He is a 1.5 years old Labradoodle and my fur nephew. One of his most favorite activities is rolling over on his back and wriggling about like a lunatic, or a horse depending on your perspective. He is a bouncy bundle of joy to both my sister and her husband. I get to live the life of dow ownership vicariously and enjoy nothing better than a walk with FInnegan in one of the many lovely parks here in the lower mainland.”
To be in touch or send a picture of your beast – email ‘[email protected]’.
191 comments ↓
Western democracies are morally bankrupt.
Profit has become God upon which no ethic or integrity cannot be sacrificed.
What is the final destination to chase that last percent of profit?
Already the world’s biggest tech companies are all about advertising and chasing indiscriminately every ad dollar available to them. Have you seen what ads are presented to you by Google? MicroSoft? Straight up scams.
Q: How much further can you chase that last percent of profit? How much his enough? How many politicians and ministers and senators and presidents and prime ministers will be entangled in this drive for the last percent of profit?
A: No less than all of them!
As stupid and as annoying as all this is to me.
Surely, if the banks are now forced to bare the brunt of this, the first thing they’ll do is make their initial loan requirements more strict to save themselves in the future? Thus making it harder to get a mortgage, thus .. etc etc.
But of course, this isnt about doing something sensible for the economy. This is about making the general public, who seem to only understand “buying house = good”, happy.
It feels like a missing part of the story is that M&G own 3 other houses and a condo…
I will offer an example of a person she is claiming to help.
Person borrowed (was approved) to borrow $700,000 at a rate of 2.09%. 25 year term. In the year 2020-August.
This person has an income of $113,000. Meaning-borrowed 7x pre tax income-approved
The payments were $3,080 a month. About $1,800 to principal-rest interest.
This will reset with $587,000 owing. Rates will likely be 5% (I am being kind).
So the reset will be $4,092 a month. Increase of 33%
So—Christinas plan.
This person will simply ask for a 35 year term. Adding a decade on to the mortgage.
Oh….and have just a $400 increase on the payments, not $1,000.
And, of course, $2,916 will go to interest, and $616 will go to principal.
Assuming 5%.
I think Chrystina needs some math help.
Nah. That would be so… Poilievre. Instead, let’s bail these kiddos out.
————————————————————
That’s another nail in the coffin for this Liberal government. Meet your next prime minister, Pierre Poilievre.
When I was a kid our dog would occasionally sleep on the couch, even though he was not allowed. My mother would catch him and give him a very stern ‘NO’ for being bad. Then she would pet him nicely because she loved him….thereby telling him that sleeping on the couch got him the attention he wanted…..and telling the rest of us that we could basically do what we wanted without repercussion. She would make a great Liberal finance minister today.
Respectfully Garth, many of us (including you) who told so many posters here in the comment section to, “Dream on”, when they asserted that Canada including its banks would pull out every stop imaginable to prop up this gas bag, were 10000% wrong.
What would the repo, foreclosure and power of sale situations look like if there weren’t all of these ridiculous shenanigans available to the financially illiterate and reckless? Lies, misrepresentations and more manipulation. What’s the point of being prudent, working hard or even opening a business in this joke of a country who’s top 3 industries are immigration, bilking foreign students and flipping crap real estate to one another? We are an international disgrace. I came back from a major international symposium in Milan Italy 10 days ago that attracted nearly 1 million international visitors and Canadian representation was nowhere to be found. Zero.
Canada is too far gone. I wish PP luck but he will be blamed for everything as the cons will probably be in power when it all collapses. Count on it.
Chrystia’s inside voice “our goal is to prevent a housing collapse on our watch”
So, we have to pay for people’s stupid decisions.
Where does their responsibility come in with all this ?
Does anyone not understand what socialism is anymore ?
If you still vote for this government in the next election, get your head checked.
Canada is becoming a banana republic. Just like the UK, the bond market will eventually revolt and you’ll see a lender’s strike and collapsing Northern Peso.
WE MUST PROTECT OUR PRECIOUS
Renters, who left their place and purchased a house the past two years, will be surprised what they would have to pay for the same place they rented.
It will be a no win situation.
Dear Garth,
you just nailed it !
The big banks all knew that this would be the inevitable outcome of their reckless lending over the past few years.
Many of these young people have not been through the interest rate cycles, but the loans managers at the big banks have been education about them.
So yes, there are times when the government has to step in and curb their greed.
Good on our Deputy Prime Minister for standing up to them.
Capitalism does not and should not have alternative….
Meddling in the natural economic process always ends in tears, regardless the initial promising outlook.
It is not wise to be endangering Canadian lenders by forcing the unnatural rules that defy the long established guidelines of free markets.
Votes anyone? Just like the eastern block oil thingy.
The nanny state. We can help.
Watching Venezuela and what killed them. Not much different. They helped.
Votes anyone?
Boy the hunger for power is astonishing.
Maybe weed out the government?
Lowest GDP for a reason?
The nanny state mentality of the Lib-NDP coalition is truly depressing…. and Trudeau states he has been restraining spending!! Stunner.. but Harpo was such a meany
It’s interesting, but not surprising that both the NDPs and Cons hate this fiscal update, not to mention much of opinionated and less and less fact based media.
The Liberals must have hit a sweet spot with this one.
Will these new regulations also apply to investment properties?
Yes, let the high rates do their job of lowering prices and increasing supply. A higher supply of houses for sale should help persuade developers to build more purpose built rental units, which could help lower rental costs.
Oh, Garth, you have such a CHIP on your shoulder!
Reverse mortgages will solve everything, just call up Kurt and get a cash advance to cover all the bills.
His chiseled abs and smooth forehead will bring wonderful comfort to Canadians.
It’s actually sad what The Impaler is doing…dog help us!
You ever wonder, sir, if you’re not cynical enough?
You seem to keep hoping that cooler and more rational heads will prevail, when everything in their actions to this point has shown that anything BUT will prevail, instead.
No way in heck the Trudeau government leaves the 60-odd percent of households who own to suffer the consequences of their own decisions. It’s too big a political bloc to let twist.
Your post on Monday or Sunday was most prescient: “If you’re looking to buy something affordable, you have three months.”
Because there’s no way these measures do anything but keep inflating the gas-bag called ‘real estate’ that our economy seems basically reliant upon for GDP growh.
Living beyond our means isn’t actually “the government’s” fault. It’s not Doug’s, Justin’s, or Olivia’s fault housing is unaffordable. Sure their policies keep prices high, but there’s no gun to your head making you pay e.g., $1.5 million for a bungalow in the 416. (I saw some listings like that yesterday).
The quick math on that property for $1,500,000 with 20% down ($300,000), and interest at 6.04%, you’re still paying ~$7,706/month. If you can afford $7,706/month, you can afford to rent just about anywhere in the 416. That same house (or a similar one) probably rents for about $4,500/month.
Even at the high price of $4,500/month, it takes ~5.5 years before you pay $300,000 in rent. Maybe in 5 years you’re ready to move anyway. Maybe you’ve outgrown the place. Maybe you got a job in another city. Fine, you’re not “building equity” in a house, but you get to keep your money for 5.5 years and do whatever you want with it. Your bank and house didn’t eat it.
I know it’s not that easy for everyone, and not every has that kind of money, but that’s also my point. People (especially people around my age – born 1985) borrow as much money as they can and buy as much house as they can. A lot of people did it at a low interest rate.
No one is making you buy at these exorbitantly high prices. And now it looks like our federal government wants to bail out people who made the mistake of borrowing too much money.
But I suppose that’s the theme of Canada, isn’t it? Our government cannot balance a budget, and it seems Canadians don’t have to balance one (at least for housing) either. We’re a nation with a lot of debt per capita (that’s government debt and personal debt), and this new Liberal policy bodes ill.
My question is which party is going to commit political suicide by letting a true real estate correction happen? In the age of social media, instant gratification and entitled young people who want it all and want “the government” to pay for it and don’t want to face the consequences of their mistakes, which political party is going to be the stern parent we need, instant of the fun parent we think we want?
I think my generation and those younger than me need a firm kick in the backside (financially) and people need to learn their lessons on housing. Thank god we have this blog. :P
No surprise that the goal here is to protect and preserve the wealth of Canadians. Or, more accurately, to protect and preserve the value of Canadians’ assets. OR, even more accurately, to protect and preserve property values, especially in terms of the unearned equity that resulted from the residential real estate demand created by two decades of ultra-low interest rates.
Please, PLEASE, tell me this plan is applicable to principal residences ONLY, not applicable to investment, rental, speculative, and secondary properties.
What were these people thinking when they entered a bidding war to purchased a home well outside their means. Did they not anticipate the return of normalized rates and do a budget based on a higher renewal rate – let the market take care of these fools and adjust accordingly.
Geez this is confusing..
Glad I am on my Time Share on the Moon.
PS….. can anyone give me a ride home?
Freeland was interviewed by Matt G. on “The Current” this morning. That vocal fry munchkin voice. Omg. She so patronizing. Let’s just get it out there….I can’t stand the woman. I might send Matt G. a sympathy card.
Notice the Ancient Warriors haven’t commented on any of the baffelgab coming out of the Finance Minister’s office or mouth. They run silent and deep, miles below the tsunami of events occurring at the ocean surface of financial calamity. Were they too lenient in their lending practices during the extremely low and unholy interest rate environment? Without a doubt, and primarily due to the gradual exit over time of border collie types who have served in previous battle trenches.
Fear not. They saw this sh_t storm coming and they will successfully execute the Gimli Glider maneuver, a.k.a Air Canada Flight 143. Dead stick landing. Will there be some road kill this time? Undoubtedly. And if peeps like Malcolm and Galen are caught in the crosshairs for a measly 400.00 bucks a month they’re not going to be able to pull out of their own orchestrated nose dive. They’ve bought a little time is all..
And what’s this crappola? “These measures will support more Canadians through the temporary financial stress caused by elevated interest rates….”
Temporary? You’re not in Kansas anymore Ms. Freeland. These rates are more or less the ‘New Normal’. Bring back the ghost of Michael Wilson. We need some real leadership.
Today’s post is proof there is no such thing as a “Free Market”.
“Should the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble?”
YEP – The lenders knew exactly what they were doing. Why did they issue these loans in the first place?
They have a forecasting office who is tied to the hip with the BOC.
Don’t tell me the smartest bankers in the world didn’t see this coming.
Garth, today you have given us a clear snapshot explaining why Canada has declining productivity.
Canadians do not have a clue as to what brings prosperity to everyone.
The answer is no holds barred all out COMPETITION with winners and losers. Losers must not be rewarded for their bad judgement.
But this is Canada where everybody get a prize.
Wow – you mean artificially cutting interest rates doesn’t really do anything, it just kicks the can down the road and makes the problem worse when rates inevitably have to rise? Who could have possibly known that??!
“At the same time Ottawa is blowing billions and billions more to construct subsidized rental housing and spanking homeowners who rent out on Airbnb.”
I am perfectly fine with the Canadian Gov’t being involved in the construction of below market rental housing. Having some increased % of social housing of the total housing stock will alleviate some pain. Some European countries have done this for decades. Making it much more challenging for investors to reap high rewards (and not report rental income) on AirBNB is long overdue. This will free up some long-term housing. However, there needs to be stricter and quicker mechanisms to kick out dead-beat tenants who take advantage and do not pay their rent.
No, there should be no specific Govt policies for tailoring mortgage terms so that the over-leveraged do not lose their homes. Allowing people to shop around for the best renewal rate without a stress test is good, but that’s it. What about those people who are renters and have maxed out their credit cards. The Gov’t does not seek to bail them out by forcing credit card companies to tailor the repayment to the financial circumstances of the people who over-borrowed. So why should the Gov’t overhelp those who have over-leveraged with their mortgage? Shouldn’t people learn from their mistakes? If many are forced to sell, the prices should come down in an ideal market. However, with the number of newcomers coming in, it is doubtful to me that the prices will come down as much as they would have otherwise.
People should own up and accept the consequences of their decisions. However, I do believe that the CB added way too much fuel to the housing market by keeping interest rates at effectively zero during the pandemic. The housing issue will hopefully be the downfall of T2.
Predictably, another Big 5 Banks dead cat bounce at the “good” news for Malcolm and Galen:
https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ABMO&window=YTD
The Banks are at her whim so she can wave her magic wand in Freeland Faerieland.
And they all lived happily ever after.
They did.
(or, thought they did)
“Our goal is to make sure Canadians have the support they need to afford their mortgages and keep their homes when renewing at a time of higher interest rates.” – Chrystia Freeland
Nope, the only “goal” is to buy as many votes as possible and delay the outgoing tide of declining Liberal supporters.
Here’s the question: should the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble? Or is it best they deal with the consequences of their actions? Should we let high rates do the job – all on their own – of solving the housing crisis? And should Chrystia, like, mind her own business and just fix the economy?
Asking for a friend.
———
Here’s how I feel about it. Infer as you like.
https://m.youtube.com/watch?v=QhMo4WlBmGM
By the way, she doesn’t know how to fix the economy.
#14 “The big banks all knew that this would be the inevitable outcome of their reckless lending over the past few years”
—————————————————————–
Much of the “reckless lending” was backstopped by me and you via CMHC.
That is the reason Deputy PM, Madame Debt and Tax, is trying to mitigate the potential impact to her future.
While it is too easy for any of us who are in a comfortable situation with our homes, with or without a mortgage balance, I can’t see any Federal government doing less when it comes to mortgage “relief”. So even if the Cons or the NDP were in power they would take the same action.
After all , it is not really a bailout as every mortgage borrower still owes exactly what she/he signed up for and every bank gets a better chance of receiving full payment of what is owed. A win-win situation.
The alternative is too many foreclosure sales ruining too many lives and driving the value of ALL of our homes down . Those of us who remember the period 1981- 1986 know all too well what can happen.
However, even with this action the market will be softer for a long while and there will be erosions of prices but nowhere near where there would have been without this action.
Looking back , the BIG mistake that caused this mess was over stimulation of the market with QE and rates that were too low for too long. Whose fault was that?
Unsophisticated Mr and Mrs first time buyer??….I don’t think so.
So confusing. I thought Canadians – in the midst of a ‘housing crisis’ – wanted substantually cheaper homes. Except you, Re/Max and Chrystia. – Garth
Wow, some harsh comments here. I think the mortgage charter is fine and probably little or no impact to banks current business practice. If it gets rid of some predatory fees and encourages competition all the better. Defaults will still happen but only for those who are really stretched and probably have a job loss to deal with. As always.
Well at least the new spending is limited, so at least Chrystia understands that running large deficits is not good.
But the idea that there’s a magic fix that Chrystia (or anyone) can apply to the economy is what gets us into trouble in the first place. If you think she can fix the economy, then surely it must be easier to fix housing? The solution is for the government to limit itself, and for the invisible hand to work.
Instead, let’s bail these kiddos out.
_____
There doesn’t appear to be a single tax dollar going to help existing mortgage holders as part of the announcement yesterday. Am I correct in this? If so how is this a bailout?
Government policy caused this mess do yes, they are responsible to clean it up.
Obviously very few posters here have dividend paying bank stocks.
As I said before, the banks probably like those measures.
And as a bonus:
They don’t get the flak.
Repeat after me:
The Banks don’t like being Landlords.
If you are in financial hardship, is there a maximum amortization that the banks can offer? Can they offer 40 or 45 years, or is it capped at something like 35 years?
Oh Chrystia! Wouldn’t the payments be more reasonable if prices weren’t stratospheric?
Asking for a loser rentin’ friend.
Russia cornered the LNG market in Europe, including most industrious nation, Germany.
US is swimming in LNG as a byproduct of oil production.
So, poke and prod The Bear over through Ukraine.
Bear responds and applies energy leverage.
Then this:
https://www.washingtonpost.com/national-security/2023/11/11/nordstream-bombing-ukraine-chervinsky/
That’s right boys and girls, we now have the answer who took out Nord Stream, and I’m pretty sure we can be certain this wasn’t freelanced and done without approval.
Then US captures entire Russian LNG market share of EU a blink.
Thank you very much.
But The Bear of course has a land neighbour, who’s more than willing to take cheap energy. Which by the way is used to manufacture cheap crap for western markets, America mainly(being the biggest), so that corporations can make bigger profits.
WIN-WIN.
P.S. This is also why Canada doesn’t go after EU LNG market, to be a good obedient neighbour.
G.I. Joe. Now we know, and knowing is 1/2 the battle.
#38 DER, it’s called a “Market” for a reason. There are principles and forces that-when allowed to work-control and level set the value of the subject. I do remember what happened in 81-86, my family lost everything. The reason was that my father over-extended himself and had no cushion or headroom in the event of changes in the market. Guess what? I have never overextended myself because of the lesson I learned from my father. You cannot have affordable housing, ever, unless you let the market didcate the value of a product, period.
#35 Price is Right on 11.21.23 at 2:14 pm
#118 Dharma Bum on 11.21.23 at 9:26 am
Any takers for a bet on how many head bobs Chrystia’s speech will have?
I say 3,897.
https://www.youtube.com/watch?v=quFECWCHX5E&t=15s
—-
Since I get the final guess, Price is Right rules…
3,898!
—
What was the final score D.B.?
I got 7280 head bobs as final count after watching video twice, but need verification.
Does this charter apply only to banks or does it carry over to private lenders as well?
@Garth.. Maybe I am missing something. But even though the banks can’t charge fees to get out of the mortgages.. isn’t the fact that they now get to collect Oodles more interest on the exact same product that they have already approved a mortgage for a win for the banks? So now you have a longer amortization.. why would the banks care?… doesn’t that equal a way bigger profit on their end?
So now people who bought more than they can afford will really just be paying off their mortgages until they die .. instead of building equity in their homes.. ??
Off topic (maybe), but what happened to preferred shares today? CPD and ZPR almost up 3%!
23 Rook
“No way in heck the Trudeau government leaves the 60-odd percent of households who own to suffer the consequences of their own decisions. It’s too big a political bloc to let twist.”
————————————————————
I am in that 60%. I have not had a mortgage in over a decade. A large percentage of homeowners dont have one. My house is currently worth over 3X what it originally cost me. Equity galore.
So what do I care if we see a good 25% correction? Maybe even 30%? If I sold now, there is little selection in the market, and it all remains overpriced (maybe -10% from peak).
A good sized correction would allow my son and DIL to buy. That would be nice.
What I dont want is a financial catastrophe where everyone gets hurt. Tough to know where that line is.
Trying to stop the flood by putting fingers in the dam’s holes.
Good luck with that.
This situation will not be resolved by ‘temporary’ increasing amortization up to interest only loans (that is next in the idiots playbook as are intergenerational mortgages) as rates are not going to go down significantly, if they do, the inflation will drown us.
At the end, based on debt level Canada can end up worse then Greece and I am very serious here.
The difference being is that weather in Greece is very nice and the food is much cheaper.
An apartment/condo in nice location or a villa will set you back 200 k CAD, much lower property and maintenance taxes, times lower cost of living.
An apartment/condo in Valencia will cost around 200 k Euro or a little above that, very nice lifestyle, beach, cheap restaurants, low maintenance and property taxes, excellent food.
They should a sign on Pearson Airport (the entrance to the frozen hell):
“Lasciate ogne speranza, voi ch’entrate,”
or
“Abandon all hope, those who enter.”
God save their souls.
When the multitudes of home owners across the land had a massive net worth increase and fat profits from home sales through no effort of their own where was Chrystia insisting that they share this windfall with the rest of us. Now she would insist we all share the pain. The horror.
Oh my god, why doesn’t the federal government cut the foreplay and simply start paying everyone’s damn mortgages if this is their idea of good policies?
Now that the banks know they’ll have to subsidize the debt piggies and the overextended, get ready for very strict lending requirements.
And should Chrystia, like, mind her own business and just fix the economy?
———————————-
And that’s the thing. Nobody seems to know what her own business is. Least of all her.
I don’t mind helping owners with carrying their primary residences. Extending amortizations isn’t as bad as many believe, money today is always worth more than money tomorrow. Sure, there’ll be more interest paid but the money used to pay the mortgage will be worth much less 25-30 years out.
Owners of investment properties should not be protected and should feel the full brunt of their misallocation of resources and risk miscalculation.
The government rewards and continuous to incentivize WRONG behavior by backing all type of idiots and reckless debt junkies who should be hold accountable for their follies.
And continues to punish correct behavior by penalizing savers, people on fixed income who live within their means and are responsible by manipulating rates and stealing form them as well form the taxpayers.
All for the profit of the banks.
For how long do you thing can this insanity continue?
The sad thing is, by “helping” these people rather than forcing them out from under their unsustainable debt, they will be much worse off in the long term.
Who benefits?
#29.
The free market along with accountability died a long time ago. We socialize the losses and privatize the gains. All the bailouts & too big to fail have done in the last 20-30 years have done nothing but kick the can down the road. Who knows how this all ends up?
Why does everyone want capitalism when they have nothing and want socialism when they don’t want to lose to capitalists who work harder and smarter than they want to?
I think both answers are obvious so stop letting the rich convince you to trade your capitalist opportunity for their socialist bailouts.
Whether it is COVID, housing, or anything really under this government, you will be better off if they do nothing and leave society to figure it out, live or die, prosper or fail. The world will be a better place without intervention because THEY DO NOT KNOW BETTER but then benefit from convincing you that they do.
Roast chicken leg was $ 4.49 at Jimmy the Greek 7-8 years ago, now is $ 12.99.
Vegetable meal from $ 3.99 is now $ 11.49.
But hey, inflation is 3 %…
Sure. Pass what you smoking.
A bail out for the irresponsible was inevitable. I’ve been saying it for years. The reasons are obvious, it’s a whole lotta votes at stake not that it will matter in this case though. CPC minus some major blunder will form the next majority government.
Personal responsibility is for fascists. Every good progressive knows that.
I live in Nelson BC one of the small interior towns that has had a bubble for years. Prices right now range from 450k for a small old handymans special to 2.7 million for a bigger house on Kootenay Lake. Lots of listings and about 4 sold signs. All the houses sold were under $500k. That is the limit at current rates for most working families.
Everytime the government introduces a lousy piece of legislation to fix past mistakes I think of the Jean Luc Picard face palm.
Of Topic
Stress Nation
——————
Just learned a new term minutes ago:
VBIED
https://twitter.com/NYCFireWire/status/1727391523459813696
Niagara Falls, Rainbow Bridge. They are not saying much.
Neither is the FBI:
https://twitter.com/FBIBuffalo/status/1727390895283044365
The Brits all over this one:
https://www.mirror.co.uk/news/us-news/breaking-niagara-falls-explosion-blast-31421647
– Could be nothing or could be something?
Bank of Canada says rates may be at peak, excess demand now gone
https://ca.finance.yahoo.com/news/bank-canada-says-rates-may-163332630.html
This is the same competent guy who said that rates will not increase and that inflation is transitory.
‘Excess demand’..
I have not read such idiocies in a very long time
Read my lips – this is a supply side inflation. Period.
Now go back to university, grade 1.
Of Topic
Stress Nation
——————
OPP not mucking about:
https://twitter.com/OPP_HSD/status/1727392819965575181
Hate to be on the road in the Golden Triangle right about now.
40 Alex
“But the idea that there’s a magic fix that Chrystia (or anyone) can apply to the economy is what gets us into trouble in the first place.”
—————————————————————
I remember ads from the Caterpillar Co way back in
the70s(?) in the national Geographic
“There are no simple solutions, only intelligent choices”
Yet another pathetic, vote-buying measure. Disgusting. Clowns.
All I can say is that having a B&D portfolio that has a high international (not in Canada) allocation lets me sleep well at night.
“And should Chrystia, like, mind her own business and just fix the economy?”
Let’s be real, Garth. It’s far too late for that. The economy is now permanently broken. You can’t have a robust economy when entire successive generations are priced out of housing. That is a recipe for lifetime poverty, social rigidity (forget about upward mobility), and a brain drain on steroids (that has already begun in earnest).
Folks that don’t own are paying 50% or more of their take home just to afford to share a crack shack with 10 roommates.
Our economy is already deep in a serious per capita GDP recession. The economy as a whole has escaped recession because we’re growing our population at literally third world rates.
Those with skills that pay the most in taxes will leave – they’re in demand. Meanwhile, we’ll get millions of diploma mill grads and lots of highly skilled newcomers for whom we won’t recognize their credentials and prevent them from contributing their skills and expertise.
We’ll continue with the tax code that incentivizes real estate hoarding so that families can’t afford reasonable accommodation, which in turn will depress the birth rate even further.
Quite the economic plan we have in Canada. It’s a plan that will see the end of the middle class in about 20 years or less, I reckon. And mark my words, all will profess to not have seen it coming.
The only serious plan to address cost of living is to dramatically reduce demand. Focusing on the supply side only is a plan for the crisis to only get worse – the supply side solution takes decades. Personally, I’m waiting for the headlines of doctors forced to live in their cars – those that choose to remain in Canada, that is. Maybe – and I stress the maybe – that is the point at which we’ll summon the will to act.
I know we’re outraged on this, but…
Didn’t we read a bunch of posts about this happening already? 72 years? 90 years?
I know that was on variable, but banks will use same method on fixed mortgages.
These debt piggies will be given a year of interest only payments, and asked to deal with the principal.
Ensures profit for banks is maintained, loss for owner as they aren’t paying of any of the debt, or maybe even adding to the debt.
This is a promise of free ponies, except, they are imaginary.
Like some pointed out, this just buys a bit of time.
What is fascinating to me is that there is no goal to get the national debt under control at all.
The debt is going to grow in they country. And Liberals ain’t going to take a single step to make it shrink.
#14 Banks knew better on 11.22.23 at 11:35 am
The big banks all knew that this would be the inevitable outcome of their reckless lending over the past few years.
Many of these young people have not been through the interest rate cycles, but the loans managers at the big banks have been education about them.
So yes, there are times when the government has to step in and curb their greed.
Good on our Deputy Prime Minister for standing up to them.
______________________________________
Comments like this are proof our education system is broken. ‘…..the government has to step in…..’??? Really? Everytime our government ‘steps in’, it breaks whatever it’s trying to fix. The government isn’t qualified to fix anything, so we shouldn’t be looking to them for answers to the housing issue. The gov’t should collect tax, administrate healthcare, education, immigration, and military. Everything else hands off. Keep interest rates normalized for a few years and watch the market take care of itself. If you’re one of those who made an adult decision and signed on the dotted line then live with the consequences and take responsibility for your actions.
Too many people in this country rely on government to ‘fix’ problems, usually of their own making. Piss off and fix your own problems. If you don’t understand basic finance or economics then learn!
I have not been here for a while, but it seems like little has changed in the echo chamber. Did anybody really believe, any gov, was going to voluntarily allow the golden R.E. gooses head to be lopped off?
I thought by now the dogs (cats?) would have realized, this has nothing to do with right or wrong and everything to do with our elected officials attempt (Lib’s heads, are still gonna roll) at self preservation.
When you have 70% R.E. ownership that votes, what did think was gonna happen?
https://www.youtube.com/watch?v=YnOcycgXpms
#9 Squire on 11.22.23 at 11:25 am
So, we have to pay for people’s stupid decisions.
Where does their responsibility come in with all this ?
Does anyone not understand what socialism is anymore ?
_________
Can you show me where a single tax dollar is being spent to help those with mortgages? A single dollar. You’re not paying for squat. The banks might be leaving some money on the table, but in the long run if mortgages are extended they’ll make their money over time.
Lots of things to be outraged about, how about picking one that’s actually happening?
Here’s the question: should the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble? Or is it best they Here’s the question: should the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble? Or is it best they deal with the consequences of their actions?
___________________________________
They? deal with the consequences of their actions.
They is the loosey goosey banks that have known all along, about the world of loans and interest resets than Malcolm and Galen ever will. I smell a rat! A dirty stinking, profit seeking at any expense to the nation, rat!
After we bail out these two ‘fella’s’, we will bail out the banks, by bailing in our deposits, for shares in time for round three of GFC.
Wonderful news! In love with the Deputy (and Future) Freeland already, can’t wait to vote for her. I think maybe she can even get the banks to divert the bank dividends from the shareholders to benefit the mortgage holders like M & G. Banks are just too rich anyway, time to help the poor.
Maybe she can also get that Tiff guy to get his act together, show him who is boss.
(a blog dog formerly known as … never mind)
Your favourite mortgage broker is totally at odds with you Garth. CF has just formalized what is already out there!
There’s nothing like self-interest to shape an opinion. – Garth
So in September TD forecasted a 5% drop in home prices for 2024
60 days later….it’s a 10% drop.
Interesting……I wonder what it will look like forecast wise around mid January.
Amazing how these things change so quickly. From “stable” to down 5% to down 10%
https://financialpost.com/news/live-news-top-business-stories-november-22-2023
Canada’s RE bubble’s burst has been nerfed a teeny bit is all. A less harsh deflation is still well underway as 18mths of hikes are yet to wash thru. Rates would have to race to zero again to alter what’s happening.
Steady as she goes, sailor!
#53 Summertime
Lasciate ogne speranza, voi ch’entrate
—————–
True enough on pricing but places like that are Summertime Party pads.
You have the same in Málaga in their Costa del Sol (better food there, Andalusian about the best in Spain, save Madrid’s monster Entrecôte).
Hopping busy in Summer, dead the rest of the year = beach culture.
You need a location with more vibrancy, things to do and see, to it. I defer to Naples, it’s Gulf, islands and Amalfi Coast. Spain has nothing near that, not even close. In Naples, many similar inexpensive places though the city needs to clean up after itself more. Rome also a good alternative, plenty of beaches nearby and Rome is Rome, nothing like it in the World.
If you want €200K places with beach culture, Italy has 7600 km of that for you to pick from. Spain similar, obv.
But boring the rest of the year.
Remember when people thought climate change was a thing? Hahahahahahaha.
The problem is they have to choose to either fix housing or fix the economy, they can’t do both. If they let people face the consequences of their own decisions, which I agree with, then disposable income goes way down, consumer spending goes way down and the economy suffers. Or they baby all of the over-leveraged homeowners and houses stay unaffordable. Pick your poison. The liberals sure have ruined this country
This morning I heard on Bloomberg car radio crackling on the US airwaves to Yarmouth, Magnificent Seven uppa 17% more in past three weeks.
Now Bank of America and RY predict S&P to double next year.
Go figure how!
So, bank shareholders have to help subsidize irresponsible borrowers? Help someone sitting on a bloated asset but no assistance for people whose retirement portfolio tanked on rising interest rates.
Well Canada, you made headline news here in Europa with the car explosion at the Rainbow Bridge.
Shouldn’t they be covering Chrystia’s Charter of Extend and Pretend Rights for the RE Economically wreckless instead?
Geez. Priorities people.
https://www.rainews.it/articoli/2023/11/esplode-un-veicolo-su-un-ponte-al-confine-tra-usa-e-canada-6954e45e-1edc-49d9-a16b-375e38cf0540.html
https://www.bbc.com/news/live/world-us-canada-67503982
https://www.dw.com/en/fbi-probes-explosion-at-us-canada-bridge-near-niagara-falls/a-67526329
https://www.lefigaro.fr/international/un-pont-frontalier-entre-les-etats-unis-et-le-canada-ferme-apres-une-explosion-20231122
Sing it, Garth!
If “there are many, many Canadians who are … concerned about being able to afford to stay in their own homes,” it is not really their own home, now, is it? Why are those who borrowed beyond their means entitled to special protection from the state? To me the favourable treatment should go to those who did not do so.
Freeland is out of her depth. She shouldn’t be a finance minister. The Liberals have screwed up the housing market and rather than do the sensible thing and let the market tank ,so it can revert to normal levels, they are propping it up, thus screwing most people under 40 years old, as they won’t get in the market. Instead they should have let these amateur landlords who own multiple properties, and those who borrowed more than they should pay for their mistakes.
Maybe we will see a lot more of this as young people give up on their government.
Are Desperate Buyer’s Burning Down Homes? 2023 Canadian Real Estate Market!
https://www.youtube.com/watch?v=HSqjjgYusYs&t=367s
So, what many of us in steerage have been saying for the better part of three years now: the banks are about to become the largest landlords in Canada.
Those who own the banks (and get that creamy divy) are the real winners here. This has everything to do with invested pensions – and how the wealth transfer continues.
Is it a class conflict or a generational conflict?
The tragedy is – this will explode forcefully when PP is in power and the Communist Broadcasting Corporation will be all over how the Cons have “destroyed Canada”.
So sad for this country. Enjoy the confederation while you can.
Banks do not take title of homes. They go under foreclosure or power of sale. – Garth
Isn’t the nice lady at the bank paid to let her over-leveraged customers off the hook? “Now, now, I’m here at the bank to make things easier for you..not to worry…” Like as if…
I laughed out loud when I read Freeland said “we are here to help”. There are soooo many directions that comments could go after reading that.
None of this will save home owner equity from ascending rates, we’re protecting the banks today. Best available rate hardly equates to lowest rate, it’s OAC. Push the risk onto the lender and they’ll gladly charge you more…as much as you can afford, you’re a tenant now.
The liberals have screwed renters and millenial wanna-be home owners again, I guess we get what we vote for.
#74 “The only serious plan to address cost of living is to dramatically reduce demand.”
Ahh yes, the old supply and demand economic text book theory.
Maybe you can explain why I can almost throw a stone across the river to this thriving town and buy at 1/2 to 1/3 the price of this side of the river?
https://www.realtor.com/realestateandhomes-search/Port-Huron_MI/show-newest-listings
I have zero sympathy for people like M&G. I also hope that the BOC keeps rates higher for longer.
That said, M&G defaulting and losing their home, so someone else can swoop in and buy at a reduced price, doesn’t “create” any new housing. M&G just traded places with the new owners. Nothing has really changed for the housing “crisis”.
@#78 Love to Complain
“Can you show me where a single tax dollar is being spent to help those with mortgages? A single dollar. You’re not paying for squat. ”
+++
Don’t kid yourself.
Free-land is living up to her name.
Our taxes are going uppa uppa uppa to pay for this Liberal/NDP socialist “nirvana”.
As for the Banks….they can run to the taxpayer guaranteed CMHC if the going gets tough.
All to “save” voters from financial reality.
Their houses are worth less than they paid 2-3 years ago and their increased mortgage payments are rising into squeal territory.
And all the smoke and mirrors the non finance Finance Minister can wave around….
Still won’t be worth a hill of beans when voters get to decide what should happen to the Liberals.
But you knew that din cha?
P.S.
Has the Canuck buck dropped yet with the most recent Financial phantasmagorical socialist utterings from Ms Freeland?
#4 T ” I think Chrystina needs some math help.”
No, she doesn’t.
She KNOWS that we the stupid Canadians, will do nothing about it.
Garth, you must admit that those folks who felt that “the Government won’t let it happen” might have been wrong about the Government not controlling interest rates but were right about the essence of their core belief the Government will act to the extent it can…
To me that is the worst part of this; in terms of behavioral economics, people will never learn a lesson that might help them but rather carry on to push theri unhelahty financial strategy to the limit…
If anyone is under the illusion that these measures will somehow put a floor under home prices or in any way “save” Canadian bubble markets from price collapses, they’re barking up the wrong tree.
It’s too far gone for that.
So what about renters bearing increased carrying costs? How do we bail those out?
So, 2 weeks ago Trudeau says housing is not a federal responsibility. Yesterday, all of the above.
Let’s face it, 500,000 immigrants per year, in two years they will need about 333,000 housing units (at 3 people per household). Add that to the 1 million immigrants from last year who also needed 333,000 units. (I don’t know if this number includes students getting PR status after their studies…didn’t look at it that closely)
To be fair, subtract the app. 400,000 death rate (at 2 per household) frees up 200,000 units, leaving a net deficit)
Even if all goes well, )and the housing money doesn’t start till 2025-26 year )it is estimated total will be only 237,000 units built. by then, many of us will have frozen to death or basically living like sardines in suburban slum houses. Or, left the country.
I have never been anti-immigration, but I think it’s time for a moratorium on immigration levels until the housing crisis abates.
Yes, and why help for people ‘owning’ to stay in their homes, but no help for renters? A 30% increase in rents (with probably more to come) is a shock for anybody.
And what do the responsible people get…nothing of course…man this country is sad sometimes
Just leave Canada if you can. Period.
1 should the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble?
Yes. As you like to say, they (the lenders) don’t want to be in the business of owning homes or condos. Can’t blame them as owning is worse in so many ways to renting – just my personal experience.
2 Or is it best they deal with the consequences of their actions?
I think it already is. I see those around me. I can only imagine the fights with spouses, managers and bosses about $. I feel for those who did not plan for such emergencies but, such is life.
3 Should we let high rates do the job – all on their own – of solving the housing crisis?
They all ready are and will impact every aspect of life in Canada for years to come.
4 And should Chrystia, like, mind her own business and just fix the economy?
Economy is really doing ok. I have been an employee for 40 years and employer for 20 years. Business is good these days and not all doom and gloom for sure. However, I think she may be busy though…Meeting with all the insiders and of course practicing in the mirror to be PM.
Permanent constipation vs. the free-flowing relief of a high colonic. It looks like Freeland has bunged up again.
Re Rainbow bridge car explosion…they r calling it a terror attack. car apparently driving from US side to Canada…
Golden opportunity for JT to declare emergency rule again. They have experience after all.
Funny how that worked. they could declare a national emergency right away with no House or Senate approval, and they had 7 days to get it passed.
After the sixth day they said, oops we don’t need it after all, so the Senate never had to look at the matter.
So the question is….what all did they get up to during those six days?
I think there was some Inquiry, but I don’t know what they determined. I doubly the Committee was allowed to see everything. Probably some kind of ‘National Security’ exemption.
Whether or not you had sympathy for the Truckers and supporters the fact is that declaring something illegal (giving online contributions) AFTER the fact I.e., it was totally legal when they did it is completely against our system of laws.
So as anticipated, the government has stepped in to ‘save’ the over indebted from the consequences of their actions. This time by demanding banks do not act as they have done in the past. To wit, by charging clients who could not or would not comply with the contract they entered into of their own free will the fees, penalties & so forth the banks have assessed in the past. So much for a ‘free’ market setting the rules!
This code of mortgage conduct will likely result in banks tightening the rules for lending in the first place by a considerable amount. Banks are going to ensure that they get their pound of interest flesh one way or another – they’ve a fiduciary duty to their shareholders & would naturally wish to preserve the stellar reputation that owning shares in their corporation has always conferred. The federal government has, as usual, made the mess but expects others to do the clean up duty at their expense. MUST keep those would be voters voting the ‘right’ way – who cares if the actions taken simply prolong the problem(s) or negatively impact the bottom line of those who made better financial choices?
#103 ‘Paddy’ – sadly, I have to argue that responsible people DO get something other than nothing. It is called ‘the bill’ because they are the only ones able to pay it – or at least, stave off creditors while everything they worked hard to accumulate is handed over to those who partied hearty at the debt punch bowl.
So, can we agree that Tesla has well and truly buried the latest ‘Tesla-killers’?
You know, the legacy folks: Ford, GM, Volkswagen, Lucid, BMW, Toyota… I could go on.
The narrative now is that EVs are no longer the wave of the future.
As Tesla racks up profitable quarter after profitable quarter after profitable quarter. Elon da man!
#38 ‘DER’ – I for one would not care if my house price dropped from current valuations. The only time I would care is if I were going to sell, which I’ve no plans to do anytime soon. Further, if my property valuation drops so too should my property taxes. LOL, as if. Those will continue to increase even if valuations fall because municipal governments always need more money, same as any other level of government.
And am still awaiting to hear what Canadians think of that upcoming income tax hit come 2024? You know, the one where the minimum tax rate jumps from 15% to 20.5%? Wouldn’t said increase have an inflationary effect on the economy too?
#87 Wrk.dover on 11.22.23 at 2:55 pm
Now Bank of America and RY predict S&P to double next year.
__________________________
My bad! The way I was holding my hand of cards, seven were hidden and the S&P looked to be @ 3500 today.
Reminds me of TSE with Shopify at nose bleed levels, until it wasn’t.
I wasn’t into Stonks to witness Nortel at the time.
So, buckle up for a 7000 S&P next year.
Or not….
It’s time to stop pretending Canadian banks are independent entities within a freely capitalistic economy. It’s a lie.
Canadian banks get to charge ridiculously high fees compared to other “developed” economies and use deposits of their customers to make money for themselves and their 1% clients.
Corrupt politicians allow all this to go on with minimal intervention so that in times of need they can call upon the “private” sector banking to help.
There’s no separation of bank and state in Canada. The government uses them as an extension of government. So why are we shocked when something like this happened? Because it confirms what everyone knows but refuses to call out?
Free market ain’t free no more. If it was the economy would be allowed to correct.
It’s not meant to be overly cynical, but I’m sure it will seem that way.
At least we get to live in a relatively safe country with minimal threats from the outside world.
Isn’t it nice to live in a country where everyone pays through the nose so that no-one has to learn a financial lesson, ever.
#104 Wait There on 11.22.23 at 4:04 pm
So what about renters bearing increased carrying costs? How do we bail those out?
——————————————-
What about the landlords? How do we bail them out?
#98 yeahsure on 11.22.23 at 3:39 pm
#74 “The only serious plan to address cost of living is to dramatically reduce demand.”
Ahh yes, the old supply and demand economic text book theory.
Maybe you can explain why I can almost throw a stone across the river to this thriving town and buy at 1/2 to 1/3 the price of this side of the river?
https://www.realtor.com/realestateandhomes-search/Port-Huron_MI/show-newest-listings
*****
That’s easy. Because the U.S. is a giant country will all kinds of livable places. Canada is a frigid country with only two places most people want to live – southern Ontario and southern BC. The vast majority of our population lives within 100km of the U.S. border.
The share of our economy devoted to real estate is already much higher than the Americans, and yet we’re still woefully short of housing. And we can’t wish the skilled tradespeople we need into existence overnight.
I say again. The only solution to making housing affordable again must – MUST – involve reducing future demand. Other things will help, but no plan is serious unless it talks about reducing future demand. Notice none of the major political parties talk about this, because the real government – this country’s oligopolies – wouldn’t stand for it. They’re making out like bandits, while the median Canadian’s standard of living gets worse day by day. If politicians were looking out for us, why would they be bending over backwards to protect the status quo that is making most Canadians miserable?
115 Nah on 11.22.23 at 5:31 pm
It’s time to stop pretending Canadian banks are independent entities within a freely capitalistic economy. It’s a lie.
Canadian banks get to charge ridiculously high fees compared to other “developed” economies and use deposits of their customers to make money for themselves and their 1% clients.
———————————
One reason why Canadian Banks and Credit Unions are so stable is that there is lots of Independent oversight.
Ever heard of OSFI and FICOMM?
Always do some research before posting.
“Allowing temporary extensions of the amortization period for mortgage holders at risk”….
“temporary” = forever.
This government will force banks to bear the financial impact of the severely indebted irresponsible homeowner. They pay no tax on sales inking a capital gain and now are protected from downside. Housing… is just too big to fail.
#105-Don Quixote
Yes, and why help for people ‘owning’ to stay in their homes, but no help for renters? A 30% increase in rents (with probably more to come) is a shock for anybody.
——————————————————————-
And don’t forget the landord. He’s sucking wind right now too.
Well, the stress test did diddly squat. People are still in trouble. I would get rid of the stress test altogether. Ditto with renewal periods. I would set it up so people could pick their amortization up to thirty years with whatever the mortgage rate is. No stress tests and no renewals. If the mortgage rates go down an automatic rate change would occur but not when it goes up. Power to the people.
House prices would explode as inventory crashed. Terrible idea. – Garth
The easier the government makes it for SOME people
to not pay off their mortgage the more debt they will
acquire because the government keeps giving them
a safety net to avoid being responsible.
#4 T on 11.22.23 at 10:59 am
I think Chrystina needs some math help.
————————————————————
No, the voters do!
———————————————————–
#5 Doug in London on 11.22.23 at 11:06 am
Nah. That would be so… Poilievre. Instead, let’s bail these kiddos out.
————————————————————
That’s another nail in the coffin for this Liberal government. Meet your next prime minister, Pierre Poilievre.
———————————————–
One can only hope!
Pull a Reagan and start moving towards a free market economy.
Update to the change to the minimum tax rate. Went online & seems like the 15% minimum will still exist in 2024. Yet Ryan’s column on November 18th said that the 15% rate was being replaced with a 20.5% rate. This however may have referred to the ‘alternative minimum taxation’ rate rather than base rates – would be nice to have some clarification on this. When searching online doesn’t seem like there has been any actual real change between the 2023 rates compared to the 2024 rates overall.
Ryan referred to the AMT. – Garth
Should the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble? – Hell no! If the government wants to provide welfare, do it out of taxes.
Or is it best they deal with the consequences of their actions? – Absolutely!
Should we let high rates do the job – all on their own – of solving the housing crisis? – Yes.
And should Chrystia, like, mind her own business and just fix the economy? – For what most people think of as “fix the economy”, she shouldn’t do that either. People seem to think that the Federal government controls the economy. It doesn’t. It can screw it up through unproductive spending or ill-advised legislation, but pretty much anything the Federal government does under the guise of “fixing” the economy will, over time, make it worse.
#114 Wrk.dover on 11.22.23 at 5:11 pm
#87 Wrk.dover on 11.22.23 at 2:55 pm
Now Bank of America and RY predict S&P to double next year.
__________________________
My bad! The way I was holding my hand of cards, seven were hidden and the S&P looked to be @ 3500 today.
Reminds me of TSE with Shopify at nose bleed levels, until it wasn’t.
I wasn’t into Stonks to witness Nortel at the time.
So, buckle up for a 7000 S&P next year.
Or not….
—————————————————————
When TSX hit 10,000 for the first time in spring of 2000, Nortel made up 1/3 of the TSX. 7 companies make up over 50% of the Nasdaq 100. The SP500 is only expected to be at between 4600 and 4800 by end of 2024. But, the prediction for Nasdaq 100 for 2024 is to be up 21%. So, lots of room to move.
#105 DonQuixote
Came across the Greater Fool quote while reading it few days ago.
Do you guys know it?
Is the blog name inspired by that quote from this book?
Rainbow Bridge has a lower level. I drove across it from Stateside after last call one summer night in 1978.
The customs guy was sound asleep on a wooden kitchen chair, leaned hard against the wall.
After sizing up the situation for a long minute, I was reluctant to blow the horn, so, I eased my car ahead, and accelerated down the Parkway, NOTL bound.
Not recommending that stunt to anyone here tonight!
Banks and other lenders must not be forced to take losses in order to help struggling borrowers. That would be a moral hazard: customers learning that reckless borrowing is rewarded, banks learning to think twice before offering any residential mortgages.
However, the government can and should help some borrowers by removing unneeded policy restrictions. And maybe, making sure the lenders cannot arbitrarily hike the rate above the current market for people who have nowhere else to go. Don’t force the bank to take a loss, but don’t let it grab an excess profit either.
#52 Dr. V on 11.22.23 at 1:11 pm
I am in that 60%. I have not had a mortgage in over a decade. A large percentage of homeowners dont have one. My house is currently worth over 3X what it originally cost me. Equity galore.
So what do I care if we see a good 25% correction? Maybe even 30%? If I sold now, there is little selection in the market, and it all remains overpriced (maybe -10% from peak).
A good sized correction would allow my son and DIL to buy. That would be nice.
What I dont want is a financial catastrophe where everyone gets hurt. Tough to know where that line is.
===
Totally agree. We want to go back to the fundamentals, but not by creating a massive shock.
@#106 Paddy
“And what do the responsible people get…nothing of course…man this country is sad sometimes”
+++
Yep.
“Tax the rich” sounds better than “Fund the stupid”.
Which is actually what’s happening.
DELETED
This gov’t is incredible. They really hate actually governing and this is a great example.
First, the Banks have always worked with distressed borrowers to keep them in their homes. This is not new, and one of the reasons delinquencies are low (and have remained low since rates started increasing). If you can afford to make payments, they will work with you.
The air bnb stuff, so no tax deductions on illegal rentals. Wow, that should really move the needle. You think folks breaking Provincial or Municipal regs are claiming income much less deductions?
And the contractor loans are an extension of a program that hasn’t impacted supply at all, and extends out past 2027. A big number, little impact, the Liberal way.
So ya, a whole bunch of nothing.
@#122 Wrk.Dvr
“The customs guy was sound asleep on a wooden kitchen chair, leaned hard against the wall.”
+++
Classic.
I had my truck towed one night in downtown Van.
I walked to the tow lot.
The guy at the gate was asleep so I walked in and hopped in my truck and waited.
5 minutes later a taxi arrived.
A guy got out and paid to get his car out of the lot.
The guy started his car and I started mine at the same time.
He turned his lights on and pulled up to the gate.
The gate opened and we both drove out ( my driving lights were off).
Gate guy was too busy reading something to notice.
Most all of this was already being done by the banks voluntarily. CF is just formalizing it but it’s still voluntary by the banks and they are not required to do it. This is just a political move to make it look like the gov’t is on the case.
It’s still a bad move though to coddle irresponsible debtors.
When does the rent strike start?
#68 Dolce Vita on 11.22.23 at 1:44 pm
^When our Rulers at all levels seize on a single incident like this and turn it into wall-to-wall TeeVee coverage you just know it will be leveraged into something larger.
Let’s see…more defense spending and/or blamed on Hermas. Fear sells. Mark my words.
This script works.
— —
Business is good and healthy?
https://bnn.network/finance-nav/business/pfizer-sues-poland-breach-of-vaccine-contract-ignites-legal-battle/
Pharmaceutical giant, Pfizer, has launched a lawsuit against Poland over an alleged breach of a COVID-19 vaccine contract, demanding a payment of PLN 6 billion (EUR 1.37 billion). The litigation revolves around 60 million vaccines that Poland, despite a binding agreement, neither collected nor paid for. The lawsuit has been lodged in Brussels, reflecting the jurisdiction of the agreement signed by the European Commission.
Ohhh, the children.
UBI, here we come!
Og
Here’s the question: should the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble? Or is it best they deal with the consequences of their actions? Should we let high rates do the job – all on their own – of solving the housing crisis? And should Chrystia, like, mind her own business and just fix the economy?
It’s best if they deal with the consequences of their actions but if Chrystia insists on sheltering the unwise she’ll get her own consequences. Like the withdrawal of credit. Obviously, banks will be very hesitant about giving out new mortgages. Without new credit, the housing market will freeze over. Building will stop – it already has. She’s such a hypocrite.
Firstly, that’s a great dog pic.
Then, I must have said a 100x over recent years that all these people throwing money at real estate better be prepared to deal with the consequences because I don’t want or need to pay for their recklessness.
Dolce Vita
Rainbow Bridge, Niagara Falls
I cannot figure out the basics. A car blew up but from where was it coming? CBC, 9 News Australia and CNN said the US. NBC said Canada.
Garth,
Why be the boogeyman. If gdp is growing faster than debt, whats the issue with spending.
Don’t we not all use the public infrastructure and public services?
Australia just had their Disney+ moment…
M49BC
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
‘Ridiculous’: RBA governor Michele Bullock slammed for blaming inflation on haircuts and dentist trips.
RBA governor Michele Bullock has sparked backlash for suggesting Australians going for haircuts and dentist visits are to blame for high inflation.
Hinting that further interest rate pain may be on the way to tackle “homegrown” inflation, the central banker said on Wednesday that domestic factors were the dominant driver of the cost-of-living crisis.
The comments sparked anger and mockery on social media.
“Breaking … bald people to lead the fight against inflation,” former independent MP Tony Windsor wrote on X.”
https://www.heraldsun.com.au/business/economy/interest-rates/ridiculous-rba-governor-michele-bullock-slammed-for-blaming-inflation-on-haircuts-and-dentist-trips/news-story/47cefde0d72eaf4a2d954316946c0c47
Well it is Fiscal Policy repression of Monetary Policy. It has been happening since the GFC and QE. This purchasing of Sovereign Debt instruments, by the Government issuing them is Financial Repression. Should have only been permitted for a very short period of time. Politics is the Interloper, here. And when Combined with a Group of People in Power, with Limited Commerce experience, and a few new Theories like MMT, and a Holier than thou, mandate. Well there is a problem. Now we see that there is more interference in the Market place.
It is important to note though Our CB, is reactionary. It must follow the Global Monetary policy put forward by the Reserve Currency. So we tried our best, but certainly our Libs, went way to far, in the Freedom of New Money, and the Creation of Such Fiat currency. I personally don’t think Inflation is over, but a more complicated Dynamic may materialize. Price Inflation in some sectors and Deflationary forces on others. The US is OK with their 30 year terms, but Canada, is in trouble. How to fix Policy Makers, that want to keep an artificially high Asset at the current levels. Not a good outlook, for future Young Families. The problem is Similar to tailoring GAAP’s to one’s own specific needs. It actually threatens, the Equilibrium of all Monetary Systems.
Canada badly needs a government with common sense.
This govt is a complete disaster.
Mrs. Guelph had never heard “I cant be out of money, I still have checks in my checkbook!” before.
The level of numeracy seems so bad ppl will not know they are bust until “Sir, your card was declined”.
FAFO:
https://kitchener.ctvnews.ca/couple-walks-away-from-140k-after-dispute-with-developer-1.6656706
In Soviet Kanada newspaper write you?
https://www.blacklocks.ca/press-gets-more-pre-vote-aid/
Press Gets More Pre-Vote Aid
Finance Minister Chrystia Freeland is doubling pre-election federal aid for publishers approved by the Liberal cabinet. Freeland in a Fall Economic Statement yesterday said payroll rebates originally promised to expire in 2024 are now extended past the next election at almost $30,000 a year per newsroom employee: ‘This is to ensure a strong and independent press can continue to thrive.’
This content is for Blacklock’s Reporter members only
— —
War on Small Business, continues. The government is inflation. $15 pint anyone? #stayhome instead.
https://torontosun.com/opinion/columnists/lilley-liberals-need-to-give-sober-second-thought-to-booze-tax-hike
The Government of Canada is adding an additional 4.7% tax on all alcohol sold starting April 1st, 2024
This will be on top of the 20% to 31% tax already being added to the cost of alcohol
Is the government saying we cannot have a major real estate correction in Canada. As we have seen in Spain, Ireland, Greece, USA etc. Is Canada within the western ‘free world’ or a government controlled socialist state? TO and Van will turn into the new Monaco, no industry, no technology, no young families, only rich tennis players, F1 drivers and oligarchs. Any educated ambitious young person will emigrate to the US, serious brain drain coming.
#148 Jeff B Burke on 11.22.23 at 8:28 pm
Mrs. Guelph had never heard “I cant be out of money, I still have checks in my checkbook!” before.
The level of numeracy seems so bad ppl will not know they are bust until “Sir, your card was declined”.
FAFO:
https://kitchener.ctvnews.ca/couple-walks-away-from-140k-after-dispute-with-developer-1.6656706
******************************
Buyers remorse… tough luck.
Wise move by the Finance Minister. Something had to be done to Help owners stay in their homes. Renters were already having to move too often, and it’s getting colder outside.
Freedom First
Difficult to see banksters going along with this ‘charter’ (which cuts into their profits) without asking for something in return.
I speculate there could be some sort of undisclosed agreement or regulation under the charter, where Minister of Finance, along with the Prime Minister will compensate banks for:
-delayed/reduced interest inflows
-differential between ‘best renewal’ and going mortgage rates
This will be done either through direct CHMC compensation to lenders or through some preferential taxation shenanigans.
Care to comment Mr.T?
Sure. (1) Put the bottle down. (2) Step away from the keyboard. – Garth
#112 Sail Away on 11.22.23 at 5:00 pm
‘Tesla-killers’
++++++++++++++++
Indeed:
https://www.tesla-fire.com/
https://www.tesladeaths.com/
So much winning
#132 fartz
LMAO YES “Fund the Stupid” is CANADA today – let’s celebrate with a parade – everyone else gets a parade, and we need a flag, oh yes a flag and like a month (at least) of celebration and recognition, and a coin from the Royal Canadian Mint – they make a coin if a dog farts, well hells bells people let’s get behind this – we don’t have much else
I find the Freeland’s speaking mannerism most disconcerting. Its baby talk. Its even worse than the condescending manner most Liberals talk to us grownups. Like being lectured to by a Miss Smartypants, an icky not cool substitute grade one teacher. As soon as Freeland says a couple sentences my teeth start to grind. MUTE.
Perhaps she is trying to the protect the CMHC (aka the government) from going bankrupt having to pay the banks back for all those mortgage defaults?
Widespread defaults are a myth. Distressed props are sold and banks repaid, anyway. – Garth
And should Chrystia, like, mind her own business and just fix the economy?
*******
In the long run, this might cause rates to be higher, longer.
“Take in a boarder”? Is this the 19th century crap hole Trudeau has created as payment for generations of hard work? In BC only 14% of kids of a parent who is also a non owner will themselves own in their lifetime. From G7 to Dickensian in a decade? Why there aren’t flaming marches in the street I don’t know. Generational Poverty is Trudeaus legacy. I no longer ask why Trudeaus long form census insisted that you disclose the number of spare ( underutilized) bedrooms you have. It’s clear that Trudeaus Poverty plan has been in the works for all eight years of his disastrous reign of terror.
https://vancouversun.com/opinion/columnists/douglas-todd-problem-when-kids-whose-parents-dont-own-homes-end-up-with-far-less
My folks had a boarder for decades. My father was a school principal. Where’s the shame? – Garth
@#156 fishman
“As soon as Freeland says a couple sentences my teeth start to grind. MUTE.”
+++
As Jack Nicholson says, ” You can’t handle the Mute!”
When Freeland starts to lecture in her nasal, preaching tone …..or Trudeau starts to wheeze….
I change the channel.
Judging from the 338.com polls…
I’m not alone.
Garth,
Tell us in the next blogs (please!) how the BANKS reacted to these revolutionary ideas of Chrystia.
Laughing (99%), shocked… what else?
And further ….Not charging interest on interest
Personally me, I don’t understand – charging interest on which interest?
What are your thoughts on recent housing regulations in BC, where you can build up to 6 units on a single family lot. Would this increase land price (Considering interest rates might start coming down in spring 2024).
Re#129 Wrk.dover. Haha, great story! Especially to a guy who grew up in the ‘60s in NOTL and made many crossings at Rainbow on Friday nights with high school buddies. Thanks for sparking the memories.
I did not see any mention of new rules are limited to primary residence, so it.covers beyond the scope of M&G.
#143 Carl on 11.22.23 at 8:03 pm
Garth,
Why be the boogeyman. If gdp is growing faster than debt, whats the issue with spending.
Don’t we not all use the public infrastructure and public services?
????????
What’s fueling our GDP?
#153 Not nice on 11.22.23 at 8:56 pm
Difficult to see banksters going along with this ‘charter’ (which cuts into their profits) without asking for something in return.
I speculate there could be some sort of undisclosed agreement or regulation under the charter, where Minister of Finance, along with the Prime Minister will compensate banks for:
-delayed/reduced interest inflows
-differential between ‘best renewal’ and going mortgage rates
This will be done either through direct CHMC compensation to lenders or through some preferential taxation shenanigans.
Care to comment Mr.T?
Sure. (1) Put the bottle down. (2) Step away from the keyboard. – Garth
********
I see it as political theatre in an election year with a party on the rocks. One of the regs is no fees if a person needs to sell.
Appear to be concerned cause you need the votes. Put in place guidelines but no details on enforcement…will there be a mortgages hotline to tell on your bank. And what is the best deal, allowing you to stay in your house while bleeding you dry. Sucking up the cash you could be spending in life’s many adventures and joys.
And what about the non bank lenders. A visit from Guido and Vinny 4 months before your loan needs a renewal? Dog forbid you get a visit from the Bank of Mom and Pop with the message that it might be time to move back into their basement…yikes!
#113 Linda on 11.22.23 at 5:11 pm
#38 ‘DER’ – I for one would not care if my house price dropped from current valuations. The only time I would care is if I were going to sell, which I’ve no plans to do anytime soon. Further, if my property valuation drops so too should my property taxes. LOL, as if. Those will continue to increase even if valuations fall because municipal governments always need more money, same as any other level of government.
And am still awaiting to hear what Canadians think of that upcoming income tax hit come 2024? You know, the one where the minimum tax rate jumps from 15% to 20.5%? Wouldn’t said increase have an inflationary effect on the economy too?
*********
PP will caimpaign to bring it back down to 15%. Win the election and hike it to 20%.
People won’t be happy…thanks for the reminder.
156 fishman – yes, just like that, except not grade one. I’ll giver her grade two.
Some one is out a lot of cash.
https://www.msn.com/en-ca/money/topstories/china-wealth-manager-zhongzhi-flags-insolvency-64-billion-in-liabilities/ar-AA1koskn?ocid=msedgntp&pc=LCTS&cvid=ed05fdfd829d4276b6e70a834b3aa24f&ei=41
“(S)hould the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble?”
Well Garth I don’t have the whole answer and there are definitely aspects of the Federal government’s approach here that I disagree with. But one piece of the puzzle stands out to me”
The banks have been very, very, very happy to lend people more than they can really afford, and tell them that they really can afford it. Why wouldn’t they? CMHC insurance protects those banks in case of default.
Over the past ten years, when I periodically considered buying in Ottawa, I would go online to look at a mortgage calculator. My partner and I make decent money but when I looked at what, on “paper”, we could afford…. it was nuts. When I compared what my “affordable” monthly payment was, and subtracted it from our real after-tax expenses (which include things like funding RRSPs and TFSA’s, vet bills, vacations, making sure there’s a meaningful emergency fund for things like e.g. replacing a cack-handed roofing job done by the previous owner)…. no. No we coudn’t. And we didn’t even have a car!
So the banks have been complicit in this, happy to make big fat loans to people they know can’t really afford, to the detriment of anyone who was only willing to pay a reasonable price for an essential thing. Since house prices were set by the highest, most confident and most gullible bidder, we were all forced to play that game.
How much would houses cost if banks were fully exposed to defaults? A lot less, I can tell you that.
So yeah, the banks should have to eat some of this.
Re: 159
Your father’s circumstances were an aspect of that time. My grandmother owned rooming houses into the 60’s where single men went to bathhouses and ate in the greasy spoons along East Hastings because it wasn’t common to have multiple shared kitchens or any more than one bathroom and showers were even less common. People bathed.
Usually once a week.
Suburbs were created , taking in boarders and rooming houses became a thing of the past because post war affluence had arrived. To go back to the 1950s life of boarders in the “home” is a step backwards for Canadian society. It’s no shame as you say, but it is a relic of the rural society Canada was in its infancy. Boarders represent a failure in governance. As this has happened so quickly under Trudeau represents a collapse of Canada’s modernity. The only countries where taking in boarders I know of as in the third world.
Another leftist gang of lying extremists gets the boot. Citizens rights are fighting back
https://indianexpress.com/article/world/dutch-election-winner-geert-wilders-anti-islam-firebrand-dutch-donald-trump-9039346/
Bravo PM Wilders. The leftists are already berating his hair. Let’s all hope Canada takes back it’s pride and values. G7 taxpayers are sick of seeing their quality of life being stolen away by the political gangsters on the left.
The EU dictatorship will fall and advance the Canadian aspiration to join the return to freedom. Can you imagine a free Canada?
turkey just raised its interest rates to 40% more hikes coming worldwide
I recall the year when interest rates exceeded 20%. Those unlucky souls whose mortgages became due were sacrificed to fight inflation. Many, through no fault of their own, were forced to sell their homes into a distressed market. That was unfair. The government’s new charter would offer some protection.
$2.6 Billion
Another Liberal handout?
Nope.
That was the amount stolen from crypto currency scams in the US last year.
The Chinese gangs that run the scam call it “pig butchering”
https://www.reuters.com/world/crypto-scam-inside-billion-dollar-pig-butchering-industry-2023-11-23/
In Canada, practically everyone who bought homes with FOMO are just housing speculators, even regular families like Malcolm and Galen. Everyone is speculating because what else are going to do? Your job is not going to cut it anymore. Hence the bidding wars, crazy asks, and bids. All of that has been worth it for a long time. Greed.
The rules in place what is the bank going to do? They increase their spreads and Malcolm and Galen are going back to where they started. It is pretty hard to engineer the system like this – the costs are passed to you.
Far too many people take next to zero responsibility for their idiotic, childish behaviour and Canadian law has, for the most part, seemingly morphed into ¨guidelines¨.
In this case, it used to be that you pay your debts as per the contract you signed with bated breath to now ¨paying when you can¨.
Do Liberal airheads really believe this will actually help the irretrievably indebted, or is it yet another attempt at vote buying? Hmmm….or maybe just buying time to the next election?
None of this will stop the stupid from borrowing too much to begin with. Just because there had been an open door of low rates doesn´t mean people had to race through it without considering long-term scenarios.
The mind boggles. Kids at the candy counter.
The non-finance finance minister must know that these measures are worse than useless. They will, under the Liberal watch, damage what´s left of our economy.
I personally wouldn´t gorge on Canadian bank stocks just yet.
This is a slow-moving, murky mess and the magnanimous delivery of these ¨measures¨ appeals pretty well only to the stupid who borrowed too much and the bank of mom who bet a pile on a losing proposition.
Unless Canada gets a change of guard – soon, get ready for decades of substandard economic performance where nothing is market-priced, retailers get away with gouging (that, by the way, has not changed) and real estate continues to be unaffordable.
Slow moving murky mess.
Speaking of lambs to the slaughter.
https://vancouver.citynews.ca/2023/11/22/vancouver-city-council-property-tax-hike-2024/
Another Lower Mainland municipal govt, heavily in debt, looks to property owners to bail them out……
Spend and tax…..spend and tax….
No wonder they want to fast track more Condo towers.
Tax money in the sky.
#48 Price is Right
What was the final score D.B.?
I got 7280 head bobs as final count after watching video twice, but need verification.
——————————————————————————————————
I dunno.
I can’t count that high.
Either way – I was wrong.
I grossly underestimated the head bobbing.
Now, if you’ll excuse me, I need to go scratch my nails across a blackboard to get Chrystia’s annoying voice outta my head.
#174 David McDonald on 11.23.23 at 8:01 am
I recall the year when interest rates exceeded 20%. Those unlucky souls whose mortgages became due were sacrificed to fight inflation. Many, through no fault of their own, were forced to sell their homes into a distressed market. That was unfair. The government’s new charter would offer some protection.
—
Who believes rates are going down next year?
This should be a Friday poll!
Garth,
How could you let your godson get a face tattoo?
You’re spending too much time with us, and not enough time with your god children!
https://nationalpost.com/entertainment/celebrity/drakes-pathetic-face-tattoo
…also…National Post reporting on Drake face tattoo? Is this what all that government media subsidizing is buying us?
Matt and Galen are a couple?
Ohhhhhhhhhhhhhhhhhhhhh!
https://www.youtube.com/watch?v=Vl3NxSqN5_E&t=15s
Freeland’s proposals reward irresponsible behavior, so that’s what we’ll get more of.
Progressive politics try to replace human nature with something artificial, so massive backfires are common.
Not unlike the things these progressive leftist baby-children are playing with:
https://www.reuters.com/technology/sam-altmans-ouster-openai-was-precipitated-by-letter-board-about-ai-breakthrough-2023-11-22/
Everyone has a good time until something breaks. Then the Wah-Wah-Wah starts.
We interrupt this program for the following important announcement:
“Canadian home prices are likely to fall twice as much as previously expected, according to economists at Toronto-dominion Bank, as persistently high borrowing costs and an unexpected surge in listings puts more downward pressure on the market. As recently as last month, TD’S team was predicting average home prices would decline five per cent through the first quarter of 2024, a call they first made in September. They’ve now changed the forecasted drop to 10 per cent, they said in a research note Wednesday.”
“……Darling, down and down, I go
‘Round and ’round, I go
In a spin, loving the spin that I’m in
Under that old black magic called love….”
#180 Are you a belieber? on 11.23.23 at 8:51 am
#174 David McDonald on 11.23.23 at 8:01 am
I recall the year when interest rates exceeded 20%. Those unlucky souls whose mortgages became due were sacrificed to fight inflation. Many, through no fault of their own, were forced to sell their homes into a distressed market. That was unfair. The government’s new charter would offer some protection.
—
Who believes rates are going down next year?
This should be a Friday poll!
—————————————————————
My contact says so long as wars are raging inflation keeps rising, so you know where interest rates are going.
The war in the middle east will spread like butter on bread, Hezbollah has attacked Israel and there is more to come.
One more comment, since the gov is implementing protection for current home owners this says all you need to know where rates are going in 2024 and beyond.
The premise seems to be that if the government did nothing then more houses would hit the market increasing supply. But these people have to live somewhere. So demand goes up too. Probably the people forced out own “too much house” so they will be looking for more affordable housing adding to the demand for this type of housing. It’s not clear to me that government inaction would cause prices to fall.
“Here’s the question: should the government force lenders to mitigate the impact of interest rates on people who borrowed too much and forced real estate prices higher before inevitably getting into trouble? Or is it best they deal with the consequences of their actions? Should we let high rates do the job – all on their own – of solving the housing crisis? And should Chrystia, like, mind her own business and just fix the economy?”
===================================
The government should butt out. Their interference in the housing market is a big part of why we’re in such a mess to start with. Let people deal with the consequences of their decisions. Bailing people out from the consequences of bad decisions just encourages more bad decisions.
Yeah, maybe the government should try focusing on fixing the economy. Because, you know, all this other stuff we want to do in this country in terms of GHG emissions, social justice, indigenous affairs, and so on, requires money to deal with. If our economy goes down the toilet, all the other stuff will go by the wayside, too.
@#146 Calgary on 11.22.23 at 8:20 pm
Canada badly needs a government with common sense.
++++++++++++
good luck finding that.
I find it ironic that people will think nothing about borrowing 24 times the amount of their down payment on a house. This level of leverage on one asset would seem beyond reason as an investment. However if you were to ask that same person to borrow 2 times what they have in the stock market on a diversified stock portfolio to gain a bit of leverage they would consider you irresponsible???
I am fiscally responsible. Living well within my means. I have no house to call my own.
When do people like myself, get to own a home like the fiscally-irresponsible do?