Author Topic: Garth Turner - Real Estate in Canada  (Read 464979 times)

Cigarbutt

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Re: Garth Turner - Real Estate in Canada
« Reply #1870 on: March 20, 2019, 01:38:49 PM »
^Agreed that the underlying issue is affordability.

Interesting to note that the US Congress legislated their own version of a First-Time Homebuyer Credit in 2008 with the intent of stabilizing a falling market and in order to stem the waves of foreclosures. It's always hard to evaluate one policy action among others but it appears that the application of the bill was fraught with IRS-related administrative difficulties and fraud and, apart from possible limited postponement, did not really influence the built-in trajectory of prices. That was in 2008 and the GSE thread is still a very active one.

The new rules where the CMHC invests alongside the new owner is a reminder of how dominant the real estate has become in Canada and the government will only become more involved with support (and moral hazard) in the event of significant declines in home values.


Also, there ave been unusual demand factors (well described by some posters in this thread) but encouraging young households to put a significant part of their registered savings in a home "investment" when the affordability is so low is IMO borderline irresponsibility.


no_free_lunch

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Re: Garth Turner - Real Estate in Canada
« Reply #1871 on: March 20, 2019, 02:12:19 PM »
Well said cigarbutt, agree completely viking. 

This is what happens when you build plans with committees.  Everyone has to have their inputs and you end up with something complicated but where everyone has 'contributed'.

In addition to the complexity, extra government, potential for fraud, it is discriminatory. One first time home buyer opted to buy a condo and is living there now.  They plan to upgrade when they have get married/have kids.  Another just wants the house right away and is saving for it.  The first is out of look under this program because they are not a first time buyer.   I really have to insist that these government programs be equitable.  If they are going to do it (and they shouldn't) but then everyone should have access to it.