Did you enjoy the housing boom of 2009?

Hope so. She’s done.

Oh, there may be hyperbole & hormones for a few months yet, but come the federal budget of 2010 – that would be in March, about 90 days from now – it looks like the hammer is coming down. This is because we’ve just received the clearest sign yet that the government has awoken with horror to the consequences of its actions. Worse, these guys are now understanding they could well be blamed for making a home into an unaffordable commodity.

So, what’s up?

Well, remember how the 2008 budget at a stroke ended the 0/40 house rush by mandating minimum insurable downpayments of at least 5% and ams no longer than 35 years? Sure ya do. It was a dramatic reversal of policies put in place just two years earlier which had given federal blessing to people with no money who wanted to buy houses. (And in so doing put a lie to the myth we’re any different than the subprime-toting Yanks.)

Looks like it will happen again. Said the finance minister on Friday: “If we have to, we’ll do what we did last year and limit the rate of amortization further than we already did, and require higher down payments.”

Jim Flaherty also – for the first time, as far as I can tell – used the ‘B’ word. Upward pressure on housing is to be expected because of cheap mortgage rates, he said, “as long as it doesn’t become a bubble. We’re watching that.”

I’ll bet. It doesn’t exactly square with Conservative-supporting middle class voters being priced out of the real estate market by a flipped-out central bank keeping rates at one quarter of one per cent. Or by young couples with diddly saved who are able to fight bidding wars because they have loans at 2%, thereby jacking valuations to historic levels.

In fact, it’s getting tough to see who benefits in the long run as housing becomes overvalued and buyers get overextended, as household debt races to a new high and mortgage indebtedness explodes. Especially now when a chastened BoC has made it clear interest rates have nowhere to go but up – spelling out disaster when the 5/35 crowd comes up for renewal.

So, Ottawa now gets it. Too late, of course. Horse. Barn. Not to mention the average $931,000 SFH in YVR.

So, this is why, if Carney’s rate-thumping doomer talk doesn’t kill the property drive, Flaherty’s new rules will.

Just imagine if the minimum was 10% down and a 25-year am, combined with Carney’s expected 2010 rate increase of about 1.5%.  That would mean the average home in Toronto, at $450,000, would require a down of $45,000, insurance of $12,000 and LTT of $11,000 for $78,000 cash at closing plus an income of $75,000 to carry it at the cheapest VRM rate.

But then, it wouldn’t be $450,000 anymore, would it?