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this post was submitted on 23 Aug 2023
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Except in the US it brought prices back down to "normal" levels. Their were still expensive but they remained more affordable than here.
The housing situation in the USA and in Canada are different though. You would be shifting the cost from those able to snatch the good deals while the crash happens to the whole population having to pay back banks through increased taxes over decades.
Don't forget all the job losses that come with that, can't buy a cheap house if you don't even have a job!
Government decides who pay taxes. Shitty governments decide everyone pays the same. Good government redistribute.
In the early 20th century people responsible for crisis, bubbles and stuff were severly punished. It can be done.
Also, you should get familiar with the story of the boiling frog. Wishing things won't get worse will only get you dead eventually.
Every damned time. Replace 'lap' with 'counter' and 'notice her' with 'stop her from knocking something off' #ragdoll
TIL how to poach brains
Our housing market as a whole is worth 6.1T
You think you could tax the rich enough to compensate for the insurance on... $400B worth now insured by the CMHC...
Good luck refunding this without impacting everyone in the long term and good luck not getting all those houses in the hands of those who already have a fortune to buy them!
Remember 2008 in the USA? The people who ended up getting their hand on the cheap houses were those that already had a stack, including foreign investors, regular folks came out of that worse off because they lost their house and couldn't afford to buy another one, in the end you just increase the number of people in the market for cheap housing! 👍
Insurance can collapse and their owners die in an alley. The mistake in 2008 was to save their asses. In early xxth century they would have. Now we pay them billions so they would have the courtesy to retire.
Also congratulations on discovering about how fucked up a free market is for things people need to live. Housing should not be a market.
Dude, that insurance is US! The government insures mortgages with less than 20% in downpayment because banks don't want to loan money for mortgages because they don't want to deal with repossession and having to sell them!
You don't care about selling houses. Their purpose is to shelter people, not to be sold on a market.
The sooner the market crash to oblivion, the sooner people can actually live there. A government has the power to say no to bank and insurance shitters. You don't actually have to pay them your right to live. The society doesn't have to comply to every desire of these shitlords.
Yes, the economy would collapse. That would be for the best if you take care of the things that actually mater : house and food.
But I have no illusion about this kind of event happening in America. You guys are too hard into the free market and your capitalist overlords.
Ok, let me repeat that.
CMHC is an insurance ran by the government. The government not respecting 400b in financial engagement would lead to the total collapse of our economy as businesses pull out of Canada. You and me are the ones who would be eating shit at that point, it wouldn't impact people that are already rich.
What you're wishing for is worse than the status quo and would kill more people than what's currently happening and you probably would be one of the ones who would be affected the most otherwise you wouldn't be complaining about the system in place at the moment.
Island defaulted on its debt in 2008. Island is still there with us. It wasn't the end of the world even it there were tough times.
Now you can have tough times for a few years while you rebuild a sane system, or you can have tough times until the end of times.
Saying that the rich will benefit more is a fallacy, or a tautology. It shouldn't be a reason to do nothing.
The situation is vastly different. In Iceland it was the banks going bankrupt that lead to their economy crashing, what you're suggesting in Canada would be the citizens getting their house repossessed leading to the economy crashing and then bringing banks along for the ride.
Look at the USA in 2008, not Iceland. Shit didn't get better for the vast majority, it only got worse, even today.
Btw I'm a privileged one. I live in Europe and I have a salary quite above average. Which means I'm in the 30% wealthy.
Fear of things getting worse is how the rich keep people in apathy: do nothing, or else it'll get worse. It's how they discard left arguments and solutions : this will mean the apocalypse door you and me, but especially you.
It's propaganda. Do nothing while people die rather than trying your chance at the future. If you look at the propaganda you'll see that the only chance they encourages you to take is the one that earn them your money for a chance to become one of them. "there is no alternative".
Liberalism survives only because of fear and propaganda. People die everyday because of it, and the next crisis will kill many more only for the system to sustain itself until the planet is no more livable.
The fact that you're in a position of privilege is what allows you to say you don't mind seeing the system crash, you'll be ok while things get worse for the poorest. Even a decade of the economy being in the gutter would be worse for most than the current situation. Better not be able to afford a house and having to rent with roommates than not be able to find a job and having to live in the street.
You don't need to "be able to afford a house" if it's not a free market. But somehow this idea seems unconceavable.
Oh so what you're suggesting is that everyone gets the same government owned apartment... Social housing and cooperatives are already a thing though and it can coexist with a free market, no need to kill people by destroying the economy.
That's not what I'm suggesting. You don't seem very creative about how it can work. Or false alternative is more comfortable to accept this fucked up situation that is already killing people.
That's killing way less people than if the bubble was to burst.
For how long?
You can't buy a house if it's not a free market. That's the whole point.
It is a free market though, it's even advantageous to people who don't have that much money because they can still get a mortgage without a huge downpayment. Back before CMHC mortgages were private loans, the previous owner would be the one financing the new owner at whatever rate they felt was appropriate and at whatever downpayment they felt was appropriate. Today you need 5% and if your credit score is good enough then the bank can't say no.
But you wouldn't know that because you're in Europe and you're here talking about the Canadian housing market like you had any idea how it works.
So you're telling me there are no problem of housing in Canada and no one is poor or dying because of it? But then why are we even talking if housing problems are unknown in your country?
I'm not saying that, I'm saying they people saying they want to see the bubble bursts and everything crash in Canada just don't understand what would happen if it did and it would make the issues with the housing bubble look like a freaking joke and would create a lot more poverty and kill a whole lot more of those who are complaining now and it would solve absolutely nothing for these people in the long run because they would just have more people competing against them for cheap housing while the rich would snatch all the properties getting repossessed. More demand, less offer, we're back to the same bubble in a couple of years with the average citizen even poorer than before, just like in the USA after 2008.
I don't care about Canada. It's a world bubble.
Then get the fuck out of a conversation about Canada's housing bubble.
They remained more affordable, for a time. And then housing prices went right back through the roof.
I bought a foreclosed house in 2012 for ~280k. It had been purchased by the previous owner for about 480k.
I put about 150k into it, 100k the first year to make it a liveable property, and 50k or so over the next ten years.
I sold it last year for about 850k...
I then bought a new house that cost about 450k when it was built 4 years ago, for about 680k, in a less expensive market.
Sorry, but depending on location prices bounced back and surpassed pre-crisis levels within few years in US. Same issue that many already highlighted - folks lost their houses during crisis to the ones who can afford it but they still need place to live. Population grows and so are the real estate prices. Investment firms are busy buying up properties and oh boy will they go wild this time, now that this turned into a very targeted industry. So those prices going down only means some people will lose their homes, others their jobs and corporate investors will gain big time. Selected few with sufficient financial cushion will weather it out and the cycle will repeat itself... because nobody builds housing to keep up with the pace of population growth. With a caveat: some rural areas are still underappreciated and if housing is what you seek - go rural, mind you job selection might be limites if any... so gotta be financially independent... oh guess what? Another pass for the average folk. So yeah... new construction is the only way out of it. Bursting the bubble will hurt folks below median a lot more than status quo. (mind you escalation of institutional investors activity would be as tragic as bursting the bubble).