Sounds more like a realistic views to me.
The government has put in place some fundamentals that make it less attractive and more difficult to contribute to real estate speculation that inflates housing prices. Since the Liberals came in they've been sensitive to both the bubble and older Canadians relying on that bubble for retirement funds. Local taxing of vacant properties would also open up housing.
http://www.moneysense.ca/spend/real-estate/the-bank-of-canadas-muddled-message-on-house-prices/
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Central bankers are also increasingly aware of something that the general public (and politicians) don't understand: Lending, and specifically mortgages, are the lion's share of a country's money supply. Choke off new lending and the economy will stop growing (and very likely start contracting). But all that new debt means the amount of money that's required to service it will increase nonlinearly, and that's money that won't go into anything productive. Plus, at some point households won't be able to stretch any further. That's when the price plateau arrives, the defaults start to happen, and the bubble pops.
ReplyDeleteNot a nice position to be in, and Canada is perhaps the worst country in the world for this exposure, along with us here in NZ and Australia. Let's hope for the best, eh?
Hopefully your banks/government is doing something like ours is.
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