It may seem like a crazy question when buyers are once again drooling over properties, but could Canada fall into a real estate recession?
If so, it would reward those who waited patiently on the sidelines, letting a 25% correction go by so they could pounce at 40% off. Maybe even half the 2022 price. Of course, if they’re wrong, it’s pooch city.
So amidst the realtor and seller euphoria of the present – with sales and prices rising, DOM falling and inventory scant – there are loud voices that Canada’s being set up for a world of hurt in 2025 and 2026.
Says Royce Mendes, an economist at Desjardins: “People will be devoting a record amount of their disposable income to servicing their mortgages. This is something that has really never happened before.”
The Bank of Canada actually agrees. This week we got two giant warnings from boss Tiff Macklem and his sidekick, Carolyn Rogers.
First, you won’t see 1.5% mortgages again in your lifetime. They’re so gone. “Nobody should expect that interest rates are going to go back down to the very low levels that we’ve seen over the last decade or so,” Macklem told a media conference on Wednesday.
CBs everywhere learned a valuable lesson during Covid. When you drop rates to almost zero, people will irresponsibly gorge themselves on debt, buy stuff they cannot afford, borrow heavily from their unknown futures and set the scene for a load of trouble up ahead. Now we have that risk hanging over the economy.
Second, the Bank of Canada has given credence and authority to the Bay Street warning that there’s a ticking time bomb in household finances and the real estate market. Yes, variable-rate borrowers have had their payments stabilized because lenders have pushed out amortizations to 30, 50, 70 or even 90 years. But when renewing, loans must be reset to 25 years and the borrowed amount could be higher thanks to unpaid interest. Monthly payments could jump by 40%, Desjardins estimates.
As for fixed-rate borrowers, equal pain. Everyone who bought in 2020 and 2021 with five-year terms that were sub-3% will have been through a renewal by 2026. “In light of higher borrowing costs, the Bank of Canada is more concerned than it was last year about the ability of households to service their debt,” it says. “More households are expected to face financial pressure in coming years as their mortgages are renewed.”
So far a third of mortgage holders have renewed and have higher payments, while Ottawa has come to the rescue of the millions with VRMs with its March 28th ‘Code of Mortgage Conduct.’ But this is no long-term fix. “A longer amortization period reduces the size of monthly payments, helping lower debt-servicing costs, but increases the period of household vulnerability because equity is built more slowly,” says the CB. These families may face the greatest shock upon renewal, especially when many realize they owe more money than they actually borrowed.
If nothing were to change – interest rates stay at current levels and mortgage contracts upheld – lots (maybe hundreds of thousands) of families would hit a debt wall at renewal. Given the unhealthy weighting of residential real estate in the national GDP, Canada could be pushed into an economic downturn.
Listings would swell as distressed households bailed out. Supply would swamp demand. Prices could fall by a meaningful amount. The waiters would be rewarded.
What could change that? Two things.
Interest rates drop. A lot. The CB might cut enough to turn current 5% mortgages into loans in the 3% range. Monthly payments for millions of renewers would increase, but not by a crippling amount. No real estate crash.
Or, the T2 government – facing a federal election in 2025 – insists its mortgage code apply to renewals, allowing those bloated amortizations to continue and again blunting the impact of higher rates. The Canada Interest Act is amended. CMHC rewrites a few regs. Prices hold.
So, what are the odds? Crash or rescue? Decide.
About the picture: “Wanna be friends? Garth – an image I captured at the local dog park,” writes JIm. ” I think Audi, the dog on the left, might be a little leery of how much fun friendship with this fellow would be. Have sent you some images before and I’ll send more as I capture them.”
To be in contact or submit a picture of your beast – [email protected].
126 comments ↓
Much intellectual discussions in last post re: bodily functions in POOls
“Crash or rescue? Decide.”
Rescue, with certainty.
#121 Sail Away on 05.19.23 at 1:19 pm
+53% in three years
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Strange, 9 days ago it was 3.5 years. When I reminded you about your purchase from three years ago, you told me you had made multiple purchases. Which is it?
Yesterday you were crowing about capital gain and now you are talking only about the dividends. Which is it?
All of this because you are scared senseless of admitting the actual state of some of your less than perfect positions of which there are certainly many. Like, what the actual F? These are huge red flags that indicate a fragile-ego stock picker who trumps up their gains while hiding their losses so that they look like an expert. No amount of diarrhea-inducing pasta recipes and fat shaming can offset them. He’ll certainly never own it now because he’s been caught.
Stock charlatans like Sail Away will only give you information that makes them look good. He will change timing, price and most importantly never reveal the size of his positions so that he always has a way to evade scrutiny when his portfolio takes a turn into the crapper. He’ll pick select tranches. He’ll cherry pick the portions of his portfolio etc. etc.
I certainly have far far more respect for someone like Carl who can own his mistakes. What he has is called integrity.
PS:
Total return on SPY purchased on that three years ago (as defined by 100*(P1-P0+d)/P0 where P0 is purchase price, P1 is today’s price and d is total dividends received) is 52.39%. DRIPing those dividends would mean higher returns. IEP? 15.66%. DRIPing (which is the default in an IEP purchase) would be worse given the net capital loss. Taxes obviously change this picture somewhat.
Tiff saying interest rates will never get to those ultra low levels again basically guarantees it will happen. This is the same guy that said that rates would be ultra low for a long time, that inflation was transitory, that inflation would be 3% by summer, etc.
No idea if they will ever get THAT low again, but Centrals and Gov’ts only seem to have one trick in their tool kit to stimulate economies, free money. I mean why was money so cheap pre-Covid, when times were pretty good, when RE was roaring? Why did they back Even today, real rates are near zero. So what are the chances we get into recession, or the RE market crashes, and these same guys don’t cut down to zero again.
I’m one of those believe what people do, not what they say. And with Tiff you’d go broke taking his guidance.
One thing we can count on is that the Feds (regardless of stripe) will kick the debt can as far down the road as possible.
I think you are spot on with the lIberals pulling another fast move to kick the can down the road. But you can only do so for so long. 2030’s will be interesting.
It will be a rescue of some sorts . From a practical perspective, where would the newly defaulted people go ? The rental situation in GVA and GTA is a disaster as it is -let’s call it less than 1% availabilty. There simply isn’t a place to go for these people ,especially families (with children). If they are evicted it will cause massive protests that no government can sustain.
Sadly there are only 2 alternatives:
1) we will have to bail out this irresponsible crowd out of humanitarian concerns ,but I would ensure they literally pay for the rest of their lives.
2) nationalize the houses where owners default and let them stay in while paying rent to a govt. entity that would be created ,afterall the left loves govt. jobs and MMT says you can just create money when yu need them ,creative accounting.
Even if amortizations are extended indefinitely for existing home owners, I’m not sure if that would save the economy.
We’d have a frozen housing market where no one can afford to move. There would hardly be any new entrants into the market since they’d likely be unable to sign up for 70 year amortizations. Debt would be handed down through the generations.
I don’t know why everyone here in the steerage section is so worked up and argumentative lately. There’s nothing to argue about until the long term trend changes. That means that the week-to-week or even quarter-to-quarter change in price of a crappy stucco East Van box built in the 70s with mold and no insulation in the walls means very little at all. Just chill the f out.
I mean, do you make decisions about your financial portfolio because the market is up one week and down the next? I hope you don’t. And since we all – unfortunately – have made real estate into primarily a financial asset instead of a place to crash, we should view house prices the same way. Look at the fundamentals, not prices.
Which is why I agree with Desjardins et al. I mean – *throws hands in the air* – y’all are still up to your eyeballs in debt, and the fact that RBC gave you a 70 year amortization doesn’t change that. Until something significant happens with household debt load, nothing meaningful has changed.
Me, I’ve got a paid-off house, 75% of my net worth is in a balanced financial portfolio, it’s Friday, and I’m going to crack a beer shortly. Skol!
What about amortization for new buyers? Do you think they could have the chance to amortize over 90 years?
Trudeau- How will you fix the deficit?
T2 -2015 – The deficit will fix itself.
T2 -2023 – Trudeau promises deficits for as long as he’s in power
Trudeau -How will you fix the mortgage crisis?
T2 – 2023 – Mortgages will fix themselves by extending amortizations.
T2 – 2025 – Trudeau promises as long as he is in power, he will continue to allow people to amortize their mortgages as long as they need. In order to improve affordability the HBSA limit will be increased to $400,000.
I would say the odds favour a rescue. 7 in 10 Canadians own a house, so T2 probably has more political upside in bailing them out at the expense of the houseless. The opposition could point out that this is contrary to the government’s (and the opposition’s, for that matter) stated goal of improving affordability, but history shows that no politician in this country has the stones to back policies which would result in meaningful depreciations in the equity of existing homeowners, opportunity and social stability be damned.
Garth – So, what are the odds? Crash or rescue? Decide.
Rescue all the way! No way in hell that T2 allows a housing crash. This is the new normal Garth. The system is gamed. No one suffers the consequence of their actions, everyone gets bailed out, debt just gets bigger and bigger.
YUP this insanity has been a locomotive out of control for far too long – BRING IT ON
90% chance of a bailout, 10% chance of a crash. And that 10% is being generous.
There’s no way in heck the Liberal Party – the party of ‘we’ve got your back’ – leaves a voting bloc that large to twist and suffer the consequences of their choices. They’ve already shown they’re willing to do whatever it takes to ‘help’ Canadians, so I don’t see any reason they’d stop now. Especially if, as you say, an election is in the offing and votes need to be bought.
Dog help us all.
If it’s a rescue, it’s just further kicking it down the road. It will force the BOC to keep rates higher I’d think? A good chance of a bit of a crash and then a flat line.
“But when renewing, loans must be reset to 25 years”
Was there explicit confirmation of this?
What would be stopping Freeland from asking banks to show the same “leniency” to people renewing as they did to people hitting their VRM trigger point?
As far as banks are concerned, why wouldn’t they want to collect interest payments forever while the occupant continues to bear all the costs and responsibilities of ownership and the mortgage?
That one is obvious. Neither.
Rates will stabilize somewhere between what they are now and what they were during the pandemic.
People with fixed rate mortgages will have a lower debt load upon renewal, even though the rate is higher. They have lots of time to prepare. Also, their income will have inched up by then so it’s a wash. Canadians don’t default, besides where would everyone go? Rents would skyrocket.
What is true is that in a few years our population will be larger, and economy bigger. All the conditions currently present causing housing to be expensive will still be present, and demand for homes in desirable areas won’t be going anywhere. As always you buy real estate when you can afford to.
IDK
Easy one, Justin, Jagmeet, and Chrystia will do the obvious;
and put Pepe in a straitjacket.
What will Pepe and his bumpkins do?
Will he have the moral stature, do the right thing and go against rescuing the home debtors?
Like Mr Turner says, use the long weekend to meet with TNLTB and figure out how you can afford your extended mortgage next year.
Don’t come up here and annoy us with your inbred southern hillbilly attitudes and germs.
Cottage country is our home, it’s not for you.
Just.
Stay.
Home.
Well, ain’t gonna crash in an election year. LOL
Ummm… rescue? How is that even a question? Perhaps we’re heading for 0/100 mortgages. Basically, you’ll just rent real estate from the bank and one day sell it for free money.
by the end of the year, buyers should dry up and more houses on the market. Prices should come down, unless the government and BOC get involved to control the downfall.
If history is any guide, we experienced the run up, then the bull trap, and most recently, the expectation of ‘the new normal’. Students of economics and human nature know that the fear stage comes next.
“Or, the T2 government – facing a federal election in 2025 – insists its mortgage code apply to renewals, allowing those bloated amortizations to continue”
there’s my bet or something similar to bail out debtors.
Here’s a new idea…how about you never pay your mortgage off, you just keep paying, renewing at the new best rate and when you die, your benefactors or whomever keeps paying the mortgage so it never dies until someone has to sell. Inter-generational real estate plan.
when will fiscal irresponsibility in general ever end? why can we not work and save and invest and try to make a good life? i will never understand the punishment of savers, and those that plan for the future. what a circus we are living in. show me where the free market exists. this is all socialist policy and the heavy hand of govt manipulation.
Authorities have proved that they will do everything in their powers to push RE prices up while talking about fighting affordability.
One should expect them to continue doing so.
The only thing that can force their hand are circumstances.
For example: BoC may chose to continue pushing/keeping interest rates lower than they should, but given eroding credibility in CAD (everyone perceives BoC as a dove in dippers pretending to be a hawk – it looks cute, but unless BoC is ready to mean business, grow some claws and do some meaningful damage, none is going to believe that all they say is anything else but bluff) this can lead to high devaluation and loss of relevance. Albertans may even decide ATB can do a better job and ditch the CAD completely. That will be a bigger loss to BoC than growing a pair, so they may chose the latter.
If amortizations can extend to almost 100 years doesnt that remove the upper limit on houses? Could be looking at SFH in horrid toronto approching average of $20 million in the 2030s.
T2 could brag that his country has the highest average house prices on the planet thanks to his policies
This sounds like the saying “if I owe you a million dollars it’s my problem but if I owe you a billion dollars it’s your problem”. If I was in trouble with my debt load I only need to make it long enough for the other lemmings to reach the cliff because I know someone will throw out a net to save us all.
Rescue of course.
The house and committees have been extra appalling the past couple weeks. Appalling.
Well Garth, as of Mar 2023, Cdn Consumers have not abandoned their spending ways.
Retail Trade, Unadjusted that shows actual seasonal swings in spending, went up in March from February by:
+19.3%
The March average since 2002 is:
+18.7%
So, if they’re feeling pain it’s sure not showing up so far THAT’S for sure. In fact, they are spending above average. And they’ve been doing that since Dec 2022.
For people like
————————————-
#53 Penny Henny Yesterday
————————————-
you can go here and demonstrate your Math and database slice and dice abilities to the rest of us in a Comment today (like I just did):
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2010005601
The “OTHER” Retail Trade StatCan “Seasonally Adjusted” Frankenumber can be found here at The Daily:
https://www150.statcan.gc.ca/n1/daily-quotidien/230519/dq230519a-eng.htm?HPA=1
where Seasonally Adjusted Faerie Dust, Unicorn Statistics came up with:
-1.4%
from Feb to Mar. I’d say that’s a FAR CRY from the ACTUAL Unadjusted +19.3%.
I love you StatCan, but stop treating us like idiots. As if we don’t know about large consumer seasonal spending swings. Drop the facade, stop pretending and tell us the truth like you do in your slice and dice version.
Your Political Masters are not worth the embarrassment you must feel having to compute and write such GARBAGE about when you know better.
————————–
Desjardins hypothesis is long into the future.
The farther out in time you go, the lower the probability the hypothesis will prove true and the lower the economic impact.
Heck, all you have to do is look at the Future Value formula and its rate, called a “discount rate” – the latter name alone should tell you how Investors treat future cash outcomes; thus, economic outcomes.
Desjardins may well prove correct, then again, they can also be wrong. They make a cogent argument.
So far, Retail Trade (in 2022 = 53% of Consumer Spending, 38% of GDP) implies:
The Cdn Consumer is Doing Alright, thank you very much.
[well, so far … I mean, who really knows in the end?]
If I may, I’ll re-post my response from an hour ago for yesterday’s article (thought it was today’s already)…
I say no crash because it’s… Too Big To Fail.
The precedent has been set. Our government will extend amortizations again on renewals too if necessary instead of allowing the over indebted to cave in on themselves. There is no other solution aside from a crash which would crater us since real estate is now the biggest contributor to our economy.
Crash because you just can’t avoid it. Eventually prices will find their natural level and that is somewhere around 40% lower than today and that might not be reached until 2029 or 2030.
#3 Faron on 05.19.23 at 3:08 pm
Strange, 9 days ago it was 3.5 years. When I reminded you about your purchase from three years ago, you told me you had made multiple purchases. Which is it?
Yesterday you were crowing about capital gain and now you are talking only about the dividends. Which is it?
All of this because you are scared senseless of admitting the actual state of some of your less than perfect positions of which there are certainly many. Like, what the actual F? These are huge red flags that indicate a fragile-ego stock picker who trumps up their gains while hiding their losses so that they look like an expert. No amount of diarrhea-inducing pasta recipes and fat shaming can offset them. He’ll certainly never own it now because he’s been caught.
Stock charlatans like Sail Away will only give you information that makes them look good. He will change timing, price and most importantly never reveal the size of his positions so that he always has a way to evade scrutiny when his portfolio takes a turn into the crapper. He’ll pick select tranches. He’ll cherry pick the portions of his portfolio etc. etc.
I certainly have far far more respect for someone like Carl who can own his mistakes. What he has is called integrity.
PS:
Total return on SPY purchased on that three years ago (as defined by 100*(P1-P0+d)/P0 where P0 is purchase price, P1 is today’s price and d is total dividends received) is 52.39%. DRIPing those dividends would mean higher returns. IEP? 15.66%. DRIPing (which is the default in an IEP purchase) would be worse given the net capital loss. Taxes obviously change this picture somewhat.
———
Haha. You go, girl!
I lived long enough in Canada to understand that RE is so important that nobody wants it to lose value.
I came here in 2013 and was a bit shocked seeing how some of my friends took mortgages, co-signed by their parents, that were about 8 times their family income. They explained this phenomenon as following: “you buy the biggest house you can afford, because while you move through your career you’ll be making more money in the future. Then, this mortgage won’t look so bad anymore”.
Me being a eastern-european told them they’re insane, but they were right!
Now owning 2M dollar houses (bought with 750k) they built equity by just paying their mortgages and having great lifes with vacations and spending money on whatever they wanted. Me on the other side, still a renter, with a lesson hard learned.
I just could not build so much equity in such a small amount of time, even if our family income is higher than theirs and our spendings are lower than theirs.
That’s it. Houses rule! The easy or the hard way, you’ll learn the same lesson.
Sooner than later our debt rating will take a direct hit. Austerity measures are on the way. We’ve already seen Chrystia and Justin declare there are limits to spending. More taxes won’t work either, it just adds to the inflation numbers. So, take 40 billion (this year’s deficit) out of the economy next year to balance the budget and let’s see how sustainable these house prices are.
#24 – If history is any guide, we experienced the run up, then the bull trap, and most recently, the expectation of ‘the new normal’. Students of economics and human nature know that the fear stage comes next.
It certainly feels this way, doesn’t it? Dog help me…
Yes, variable-rate borrowers have had their payments stabilized because lenders have pushed out amortizations to 30, 50, 70 or even 90 years. But when renewing, loans must be reset to 25 years and the borrowed amount could be higher thanks to unpaid interest. Monthly payments could jump by 40%, Desjardins estimates.
———-
Must be reset to 25 years indeed, and then with a stroke of the pen the Gov’t will give the banks the go-ahead that at reset time, one will be allowed to extend to 30 or 40 years if need be. It is not a free market in any sense of the word as the Gov’t will change the rules at the last minute to prevent a market collapse. The prices would have likely decreased much more than the small amount it did (given the huge rise from 2020–2021) had the Gov’t not intervened already.
Hard to make any predictions whatsoever about the demise of the real estate market when the Gov’t can step in to prevent market forces from playing out. All those people who had Variable rate mortgages who would have been in a world of hurt should thank Trudeau. For those who are in the next generation trying to enter the market, be content with the tiny help that the FHSA offers, but frankly that won’t do much either.
As a boomer retired couple, we somewhat welcome higher interest rates .
Maybe then we can stop investing in safe dividend stocks..lol
Bce down, ppl down, ry down, TD down, eng, down Gww (us) up etc etc.
Give me 10 yrs of gic at 6% and I will stop drinking
OSFI will decide not T2 although I’m sure T2 will cry and slam the table if OSFI decides against it. I’m sure they are assessing the risk and it will depend on the potential impact to the banks.
Fed liberals have an election October 2025. They need to kick the housing fiascal done the road till then. If reelected they will feel sad but say we provided help and warnings. Remember at some point the NDP needs to seperate from the Libs, will they force a vote in 2024?
Bigger question: Will mortgage holders have money left over to spend in our Consumer driven economy?
There are a lot a variables to consider. The debt bubble is a current ball and chain.
We will have to let play out…as no one really knows. I am hoping that gasoline will go down substantially this summer so I can plan more road trips. I am really really really staying positive about it.
Crash or rescue? ‘facing a federal election in 2025’. Gee, let me think, it is SO difficult to decide (sarcasm, here). Rescue, naturally. The Liberals will want to be re-elected. Not going to happen if ‘the government’ allows the heavily indebted to drown. Nope, let’s just rescue those poor souls, who were forced, forced I tell you!!! to take on mega debt because ‘Tiff said rates wouldn’t go up’. Or whatever the excuse of the day is.
We all know Ottawa of any stripe will do “whatever it takes” to keep reckless Canadians from looking for a scapegoat in regards to their poor financial decision making.
Canada, where being reckless is rewarded, for now.
Going long Canadian bank stocks…
There is no question there will be a rescue in an election year. Also I don’t trust anything predictions that Tiff makes. He also previously said that interest rates wouldn’t be rising for a least a year and a half and then inflation raised its ugly head. If we get a recession which is looking more and more likely because the current rate hikes haven’t had their impact yet then who knows what will happen to rates.
This is the end game. Government should pay for our mortgages, give us job, pay our student loan, pay for our groceries, our car loan. We should give Trudeau a lifetime tenure.
Deleveraging is coming and it is inevitable.
People should not be afraid of it. It happened many times in the past and it will continue happening long after we are gone. Just like recessions(deleveraging) is part of the economic cycle and economy is usually much better afterwards since all the dead wood is gone and the new economic cycle is formed.
All of the government’s huffing, and puffing while pretending to care about affordability paired up with impotent laws, rules and regulations designed to appease the populace are not going to work.
Simplicity of the situation is that collectively we do not produce enough of the economic output to justify current valuations in Canadian real estate.
We owe and spend way more than we produce.
All of the real estate increases in the last decade are result of excess borrowed money entering the system. Hence atrocious results in debt levels vs income and many other categories(too many to list).
It should not take many columns, charts comments just to realize the inevitability of the outcome.
PS: If the government allows you to rent the house from the bank for 50-90 years who is the winner really?
Selling in our neighbourhood has kicked back into gear with a vengeance. There were four houses listed since fall that sat through the winter and now all have Sold signs.
It’s tough to say if we’d ever sell… it’s very nice having space for guests, plus the kids can bunk down during their itinerant stages as they both are currently doing. Also, I’m emotionally involved with the tree spirits, as well as multiple generations of nesting crows and other wildlife.
In other news, this looks like a perfect long BC weekend. The hordes descend tomorrow. Off now for a midday mountain run.
“Interest rates drop. A lot. The CB might cut enough to turn current 5% mortgages into loans in the 3% range. Monthly payments for millions of renewers would increase, but not by a crippling amount. No real estate crash.”
Alot of this talk going around. Misses that the curve is inverted and the distance overnight rates would need to drop to make variable cheaper than fixed is significantly higher. In other words, to get to an uninverted curve we may have variable dropping and fixed not moving, with lowest priced mortgage rates not changing
Sunny ways my friends, sunny ways!
relax, and enjoy.
“Or, the T2 government – facing a federal election in 2025 – insists its mortgage code apply to renewals, allowing those bloated amortizations to continue and again blunting the impact of higher rates. The Canada Interest Act is amended. CMHC rewrites a few regs. Prices hold.”
100% this.
I’ll take government corruption for 1000 Alex.
How much does the average person actually own with
mortgages, CHIP, Home Equity Loans and Lines of credit?
If rescue it is, then we might as well bail on financial literacy as well.
The government will try and rescue of course.
But there’s not alot of road left to kick the can down. Banks won’t accept payments less than the interest on the mortgage principal. This suggests Justin will start helping with mortgage payments. Ugh.
Rescue. Government mandate these days is to protect people from their own stupidity and ignorance. When was the last time they let the voting class suffer, en masse? Governments love kicking the can down the road to win votes. This will be no different.
If the government allows extended amortizations on renewal, I hope its only be for those with mortgages on their principal residence. Too many people speculated on rental properties and it’s driven rents up. Maybe this way they can bring housing prices down slower?
I am hoping that gasoline will go down substantially this summer so I can plan more road trips.
……….
This winter’s plan is to drive truck and camper across american south chasing the sun and warmth for a few months.
Gas is $0.75/l (usd)today down there. Got to keep those co2 numbers up, plant life depends on it.
For now? Nowhere on earth comes close to BC when it’s sunny and warm and so perfect as our last week has been.
For the curious, I plotted Unadjusted, Actual Retail Trade Sales since 2003 to present. Shows the annual swings in Consumer Spending.
Easy enough to see what a toll the GFC took, 8 long years of recovery – annual peaks and valleys below the Trend in those 8 years.
Covid 2020 a 1 year recovery. Incredible when you consider the Feb 2020 dip rolled back RT $ by 4 years.
https://twitter.com/bsant54/status/1659665677693730816
Why I take pause at Doom and Gloom predictions when it comes to the Cdn Consumer.
The Cdn Consumer is as RESILIENT as they come.
If real estate does not crash in 2025 or 2026 it means we are facing a lost decade. The debts must be paid and it will take a very long time during which time the residential building industry will experience exceptionally high unemployment.
And if the mortgage code of conduct gets renewed, it will spell very hard times for the banks who will curtail lending in a big way. There is no escape despite what Jagmeet Singh and Chrystia believe.
And if there is no crash before the 2025 elections it is somewhat likely that JT and the gang will get reelected.
#37 Bezengy on 05.19.23 at 4:09 pm
Sooner than later our debt rating will take a direct hit. Austerity measures are on the way.
Remind me again, why austerity measures are to be inflicted on the sick, low income and homeless because you dummies blew your brains out speculating in obviously overpriced real estate?
#3 Faron
So far this year, so-so good and bad for me.
Stock value, yesterday vs. Jan 1, 2023:
-5.7%
After-tax dividend yield, annualized as of yesterday *:
+16.9%
Overall return so far still beats the pants off of any GIC by about a FACTOR OF 2X. And I get monthly cash flow.
2022 return was +23%.
You know F, I had a gut feel late last year that 2023 would be turbulent and so far for me, it’s been true.
April still has 2 more key dividends to come in and they are juicy. So that +16.9% will go up a few points by the end of April.
I remain optimistic but was hoping for stock appreciation recovery from its May 2022 peak. Oh well, still counting my blessings.
————–
* As a non-resident WebBroker immediately pays from my dividend $ received the dividend tax to Gov Canada and after that, I have no further obligations to CRA.
So far this year, between Maple and US dividends the overall tax rate has been 25%. A bit steep but you can’t argue that it’s not been worth it per the above dividend yields.
Eric Reguly gets it.
The Globe and Mails’ European Bureau Chief writes today on the costly obsession with EVs.
Of interest to me:
– “In some enlightened cities, the debate is not whether EVs are a net benefit but whether cars of any size, shape or power source are. In Paris, … eliminated most cars from a few main roads like the Rue de Rivoli and is expanding the metro network. The result is that car trips in Paris have fallen by almost half since 1990…”
– on high speed rail Montreal/Ottawa/Toronto – “…Munk School of Global Affairs & Public Policy put the price tag at about $12-billion, which is $2-billion less than the bucks being thrown at the Volkswagen battery plant alone…”
Interesting about that single battery plant subsidy vs. the cost of that rail line.
Will this affect where you should purchase your house? If the truth about the environmental impact of EV production, and continued death rates in pedestrian-car “interactions” become widely disseminated, maybe society will react. Maybe.
link: https://www.theglobeandmail.com/business/commentary/article-stellantis-ev-battery-plant-canada/
What happens to the derivatives market if you have infinite amortization period mortgages? Is this even possible? These mortgage securities can’t even be held to maturity! This sounds like a recipe for financial depression so I’m sure this government will be all for it.
There will be a recession and they will reduce interest rates to stimulate the economy.
This will ease the burden on homeowners until they lose their jobs and are forced to sell.
The OECD didn’t predict an ultra low GDP per capita for this nation for an extended period for no reason.
Our industries have been chased away.
Public sector growth has choked off private sector investment.
You can’t put lipstick on a pig.
The place is broken.
#47 Grandview
Good Post. Not like there are numerous examples in the recent past to remind us.
#7 ElGatoNeroYVR on 05.19.23 at 3:17 pm
2) nationalize the houses where owners default and let them stay in while paying rent to a govt. entity that would be created ,after all the left loves govt. jobs and MMT says you can just create money when you need them ,creative accounting.
________________
Hmm. Sounds a lot like communism. Is this what you really want? Is this a sign of a healthy society, economy?
T2 and gang are all about saying one thing but doing the opposite. He says he’s helping indebted home owers. But he isn’t really. So called ‘bail-outs’ so far are only costing the bulls that borrowed. During election, he will window-dress that he’s saving Canadians, many of which are Cons. But they’ll suffer the full brunt of it. As they currently are.
Well Canada, you Leader decides to lecture Italy about gay etc. rights not knowing that PM Meloni has not changed the Laws enacted by the Left when they were in power.
Of course, lost on your Genius PM, Giorgia not enthused and made to look contrite by take a piece of the $600M “rescue” fund snorfled by Global News:
https://twitter.com/globalnews/status/1659378532890337283
Suffice to say, Italians not happy.
A Canadian observed it’s BS and Vote Virtue Signalling and he is correct:
https://twitter.com/BillUtah99/status/1659555653931655172
Perhaps, the BEST Tweet of All is that some of the very people Trudeau is trying to defend in Italy say he is in essence a NUTTER and IGNORANT:
https://twitter.com/ProVitaFamiglia/status/1659512400360374272
Italians don’t care and are not N. American sexual orientation, change it, etc. obsessed.
Here Elisa recommends that Canadians and their sexual obsessions stay far away from Italy:
https://twitter.com/Cister09/status/1659626193971462145
The Italian Left tried to capitalize on Trudeau’s nonsense today and good shot down in flames by average day, common sense Italians.
Simple to understand Italians, the 2 C’s:
Calcio, Cucina.
Give us that and we’re happy Campers. Each his/her* own, live and let live.
———–
* No Bill C-16 in Italia.
It is such a comfort in Italy to just refer to people by those 2 pronouns only.
As always, great content. But admittedly…I’m missing the non real estate focused financial insights.
I check daily to see “Garth’s insights” on the stock market …it’s been awfully flat.
That BOC Financial System Review is quite the read with all sorts of interesting items and charts. Chart 10 was my favourite. As is often the case it seems to boil down to which markets are the biggest gasbags, how much equity people have in their homes, and how indebted they are in both mortgage and consumer debt. Maybe add in how big is your rainy day fund. What’s coming down if about way more than real estate, though most are laser focused on only that component.
While some may weather the coming storm, it will unfortunately be a hard landing for others. What will be interesting is how different the fallout looks in GTA/GVA in comparison to their corrections in the late 1980’s and early 1990’s. The players at the banquet table of debt don’t resemble those years. Sure feels good to be debt free here in Cowtown, and maybe there are blessings to be counted for real estate values staying as flat and low as they did after the last oil bust. We weren’t caught flying too close to the sun this time…….
Thanks for the daily bread Garth. You pump out this blog everyday and we greatly appreciate it.
First, you won’t see 1.5% mortgages again in your lifetime. They’re so gone. “Nobody should expect that interest rates are going to go back down to the very low levels that we’ve seen over the last decade or so,” Macklem told a media conference on Wednesday.
Same dude that said: “Our message to Canadians is that interest rates are very low and they’re going to be there for a long time,”….yah ok buds….I don’t think the Tifster has much cred anymore, and just wait till he raises 25 beeps in June. I patiently wait for your witty retort Garth.
Perhaps we are headed towards what Paul Martin experienced when the rating agencies tapped him on the shoulder. Bail out for sure you until Freeland gets the tap. Lol
#98 Bdwy on 05.19.23 at 2:30 am
73 Wrk.dover on 05.18.23 at 8:15 pm
It would be nice to have a carbon credit for the 20 megawatts of solar power we produced on our roof
_______
Sorry, no.
225 W panels are typical.
You’d need 120,000+ panels to make 2mW.
Or you have a very large roof.
But perhaps you mean mW hours.
___________________________________
You lose this argument because you misconstrue what you read. Bias much?
WE have produced 20.5 MWh in not much more than three years, with a dozen panels.
$3,333.00 value, 16,300 lbs. of coal not burned, or to an Albertan’s measure, 33.9 barrels of oil not burned.
Brush up on comprehension before you poke me with a stick, or be wrong!
I only ever print facts on this blog. Learn that.
Garth – give it a rest already!
given past behaviour and the fact Justin says he has your back
rescue and then a financial crisis later on
and re: When you drop rates to almost zero, people will irresponsibly gorge themselves on debt, buy stuff they cannot afford, borrow heavily from their unknown futures and set the scene for a load of trouble up ahead.
includes Mr. Socks too
“Rescue” 100%. We have a Maternal government hell bent on rescuing all us little Jonnys from the pitfalls of life.
But I wouldn’t want to be one of those peeps needing a rescue. A 1.5M gta house at 3.5 over 50 years pays out almost 1.4 Million in interest. Uhh… no thanks.
I can’t see there being a major crash considering there are enough buyers out there right now buying at these crazy prices at the current rates. But I could see a middle ground. Prices coming off another 10-15% and then sideways for awhile…
#40 Domino on 05.19.23 at 4:16 pm
As a boomer retired couple, we somewhat welcome higher interest rates .
Maybe then we can stop investing in safe dividend stocks..lol
Bce down, ppl down, ry down, TD down, eng, down Gww (us) up etc etc.
Give me 10 yrs of gic at 6% and I will stop drinking
___________________________________
Investors be Charlie Brown kicking the football
Markets be Lucy holding the ball
Give me 10 yrs of gic at 6% and I will be drinking full time!
Keep your stick on the ice, I’m pulling for you.
Bdwy, by the way, my 400w LG panels feeding through Enphase microinverters, are all tied into an Enphase Envoy, a $1600 toy that records each panels out put every fifteen minutes.
I know well of what I talk!
That’s how I roll.
It will be a rescue with borrowers allowed to preserve extended amortizations upon renewal.
But this will have a drag on the economy as homeowners will have less equity to borrow off of, as their longer amortization periods will slow their ability to build up equity significantly.
In some ways, a crash might be healthier. But that’s easy for me to say as I’m not one of those people who needs a long amortization mortgage in order to keep their house.
In our topsy-turvy world everything that has been trusted and worked so well is unraveling. Fortune has an article today about the plight of nations who trusted China to act with the benevolence shown by the IMF.
Trudeau only cares about elections. He is going to allow hundred year mortgages or whatever short sighted moves it takes to win an election. If anyone questions him on it he will change the subject as he never really answers any questions!
Hundred year mortgages are not working out for Japanese seniors.
https://vdata.nikkei.com/en/newsgraphics/aging-society/housing-loan/
Everything that has been trusted and worked so well is unraveling. Fortune has an article today about the plight of nations who trusted China to act with the benevolence shown by the IMF. Sunny ways = don’t worry, be happy.
All the debts will need to be repaid.
In full.
Justin Trudeau does not control the international financial system. And it’s the global bond market that controls interest rates.
The hard, age-old rules of borrowing, lending and interest will rule.
Govern yourselves accordingly.
SteveO
It’s a no-brainer… Trudeau is gonna rescue the over-indebted and sink Canada deeper into debt to hold onto power for the Liberals.
Is this (un)real-estate bubble pumped up enough yet? Look in the mirror, citizens of Canadastan. You allowed this to happen through electing the people who’ve brought us to this point. You get what you pay for, I guess.
$700k @6% for 40yrs-$1,150,000 in interest/rent
$700k @6% for 25yrs-$653,000 in interest/ rent
Amazing amount of money to throw away on renting from the bank, this why you own bank stocks. As a holder of bank stocks I fully support this and this great Canadian Government policy of keeping people in their homes no matter the costs to themselves.
And the underbelly which is the bureaucracy has all you elected officials on a leash. You know, the monster you created and is now biting y’all in the ass. Including long suffering taxpayers. Good job, NOT!!! This is an artificial country built on unicorn flatulence and a unwillingness to face facts- you can’t spend your way to prosperity through debt forever.
A jubilee is in order ;) Let’s barter!
It’ll be the working poor who will lose out the most through exorbitant rents. And in over crowded cohab tenancy trying to pay those rents.
Flop Drops.
“Oh, give me land, lots of land under starry skies above
Don’t fence me in.
Let me ride through the wide open country that I love
Don’t fence me in.”
Sydney Crosby’s Uncle, Bing Crosby, wrote that little ditty when he was thinking about buying a block of land in Surrey, way back when.
Here’s the latest block of land to go on the chopping block.
The details…
Asking 999k
Assessment 939
Just sold for 900k
Syd The Kid is now in the twilight of his career, and so now should be called Syd The Senior…
M48BC
https://www.zealty.ca/mls-R2769692/10021-HELEN-DRIVE-Surrey-BC/
Hi Garth,
Thanks for the insight.
What is your source for the suggestion that amortizations must normalize to 25 years upon renewal?
I heard from a mortgage broker that amortizations are negotiable upon renewal.
And was there anything in the budget that said that amortizations could only be flexible now and not upon renewal?
Thanks!
When in history have gas-bags like this worldwide coordinated real-estate example occurred? The Tulip frenzy? The South Sea bubble? King Solomon believed archaic rocks held wealth, and he was wise.He wore a gold crown. Central goobermints worldwide think so too. Paper is paper in the end, don’t you know? What are your crowns made of, debt snorfellers? Paper, I assume? Does faron wear a crown? Maybe a Chuckie Cheese one?
110 crowdedelevatorfartz on 05.19.23 at 9:19 am
@#107 Ponzie prevails “In Salmon Arm now, cutting the vacation short, and going home. Smoke and poor visibility spoil the experience.”
+++ Don’t forget to visit the Salmon Arm train station where Prime Minister papa Trudeau gave the locals The “Salute” for peppering his train car with rotten fruits and veggies….
———+———.
The “Finger” and the “Pirouette “, .
Classic.
He knew Politics are mostly “theatre “.
When you drop rates to almost zero, people will irresponsibly gorge themselves on debt, buy stuff they cannot afford, borrow heavily from their unknown futures and set the scene for a load of trouble up ahead. Now we have that risk hanging over the economy.
*******
The longer they delay letting the economy aspirate naturally into a necessary recession, the more intense the gag reflex will eventually be.
Workedover …Bdwy, by the way, my 400w LG panels feeding through Enphase microinverters, are all tied into an Enphase Envoy, a $1600 toy that records each panels out put every fifteen minutes.
…….
Very nice. I run 4 seperate PV systems in 3 different locations , lithium battery storage, no grid ties. Dc only so zero inverter losses.
Ur system..
12x 0.4= 4.8kW rated power
Actual likely way under 4.0 in perfect conditions.
20,000kWh/4kW =5000 hours of full sun in 3 years. Doable with no big trees nearby.
Thx for using the correct units once i pointed it out.
.004mW is not 20mW.
“20 megawatts of solar power we produced “
#64 Bought the top on 05.19.23 at 5:50 pm
“What happens to the derivatives market if you have infinite amortization period mortgages? Is this even possible? These mortgage securities can’t even be held to maturity! This sounds like a recipe for financial depression so I’m sure this government will be all for it.”
The same thing that happend to the banksters in the USA that bet interest rates would never increase.
They cannot lend money out at less than inflation, and pay depositors negative interest returns. At least not forever.
I see a Minsky moment in the distance.
Tick Tock, Tick Tock
I am wondering…
Recently we had the biggest punch in the face of the homeowners when BoC rate grew from 0.25 to 4.5, and we’re seeing the house prices getting back to the levels of February 2022.
Now we have news that the BoC rate might go up another 0.25-0.5% more and everybody is on hopium.
Why is everybody thinking that the prices will go down 30-40% from the peak, when we see salaries going up and a 200% increase in rates not having any impact whatsoever?
What are you people smoking?
This situation clearly tells: if you can’t afford a house because you’re poor, that doesn’t mean the rest of the population is in the same situation.
Maybe it’s time to grow up and admit that your equity is less than the agv family has?
I mean, I was and am in the sam situation for the last 10 years, and this didn’t bring me anywhere. Realize it, own it and make the next logical step. Owning a house in Canada shouldn’t be a goal.
@#85 SteveO
“Justin Trudeau does not control the international financial system. And it’s the global bond market that controls interest rates.”
++++
100% agreement.
Canadian political posturing on the international scene is…. a….. joke.
Trudeau’s version of a better “Canada” will eventually be dragged, kicking and screaming back to fiscal reality….
I just hope he and Freeland are still in charge when it bites….
Karma.
Rescue is not in the cards. Socializing debt is called communism and or state-owned entities.
@#99 Jacob’s Ladder
“Why is everybody thinking that the prices will go down 30-40% from the peak, when we see salaries going up and a 200% increase in rates not having any impact whatsoever?
What are you people smoking?”
++++
Wage and price spiral.
Wages keep chasing inflation.
It won’t end well.
What oh what are our Rulers up to? Who asked for this and why now? Gee let me guess, parceling it off to their developer buddies.
More stalls needed on this Tax Farm. Profit.
.Ontario announces break up of Peel Region, cities to become independent by 2025 (toronto.ctvnews.ca)
—– – Who is burning down Alberta and why? Oil & Gas anyone. In an election year too. I maintain WW3 was unleashed, 03/2020
“Police investigating 6 suspicious fires set on Monday and Tuesday in Grande Prairie
Police are investigating a string of suspicious brush, grass and structure fires in Grande Prairie on Monday night and early Tuesday morning.
edmonton.ctvnews.ca”
https://www.westernstandard.news/alberta/peace-river-rcmp-investigate-multiple-suspicious-fires/article_e3d0b3f4-f5ae-11ed-8656-e7bca3958deb.html
— –Hey the media is using the term War, not only me.
.Passport redesign just the latest battle in the culture war over Canadian identity (cp24.com)
#173 jess on 05.18.23 at 1:06 pm
Yup yup it becomes clear this is one of the ‘reset-like’ goals being rolled out out in each province. Almost back to 2019 Normal right??
https://pressprogress.ca/alberta-surgery-wait-times-surgeries-ucp-privatization/
A new report from the Parkland Institute finds that the privatization of surgeries – expanded under the United Conservative Party’s Alberta Surgical Initiative – has not only failed to relieve hospital wait times, but actually diverted resources away from the public system.
If they are going to protect mortgage holders you can buy this property for the price of a Vancouver crack shack.
https://www.ovlix.com/property/2NWZqx-1809-33-Street-Vernon-BC
Trudeau Trudeau Trudeau – I am SO done with hearing his name – NEXT
Foregone conclusion: Trudeau & Co introduced the fudge. They’ll extend it. Stupid is as stupid does.
Simply, buy a hose now and just ask for a 70 year amortization. Avoid the rush to the bottom.lol
A few things..
Really no question that mortgage amortizations will be extended on renewal . This is the new normal which will float leaky boats.
The builder I finance, sold yesterday, 4.2 in 60 days, central 416. At least 30 showings. People drool for turnkey glitz in the midst of a crowded, gridlocked city about to be taken over by Olivia Chow.
Meanwhile, at the Ponderosa on my zero turn most of Friday. So nice to see the apple and pear trees flowering in the orchard and the giant linden trees bursting with new leaves. Forest is filling in with new growth. Nature never fails to amaze me.
#97 Bdwy
You have a burnt wire in your circuitry!!!
If you make $2.73/day, in a year you will tell me “I made a Grand.”
We have made 20.5 MWh. Swallow it.
#61 Pasha on 05.19.23 at 5:30 pm
#37 Bezengy on 05.19.23 at 4:09 pm
Sooner than later our debt rating will take a direct hit. Austerity measures are on the way.
Remind me again, why austerity measures are to be inflicted on the sick, low income and homeless because you dummies blew your brains out speculating in obviously overpriced real estate?
——————
I don’t speculate on RE, I’m debt free and living on the cheap up here in the north. Pike and weeds some days, but I wouldn’t change a thing. So wrong guy, sorry.
But, to answer your question as to why I think austerity is coming, it’s simple. The budget doesn’t balance itself, and the numbers have to add up. If Trudeau and gang decide to spend more cash than they can tax then sooner or later external forces will make the necessary changes, like to our debt rating, because the folks who loan us money want their money back, or at least the interest which is 20 billion more this year, and I’m pretty sure they don’t care about the sick or homeless, that’s our problem. I wish I had time to explain it further but it’s opening day for you know what, wish me luck will ya.
#106 Doug t
Trudeau Trudeau Trudeau – I am SO done with hearing his name – NEXT
——————————————————————————————————–
https://www.youtube.com/watch?v=-yZHveWFvqM&t=3s
@#110 Whr.Dover
A MW = 1,000,000 watts
A Mwh = 1,000,000 watts/hour
https://www.ucsusa.org/resources/how-electricity-measured#:~:text=Megawatts%20are%20used%20to%20measure,plants%20or%20of%20many%20plants.
Large coal, nuclear, or hydro plants produce megawatts….not residential , rooftop, solar panels in cloudy, rainy, Blackfly N.S.
#111 Bezengy on 05.20.23 at 6:52
I wish I had time to explain it further but it’s opening day for you know what, wish me luck will ya.
—————
Walleye? Good luck. Have fun.
….and in the “carbon neutral” world of green ideas…. and “15 minute livable neighbourhoods”….
https://vancouver.citynews.ca/video/2023/05/19/living-car-free-in-metro-vancouver/
The conclusion?
“In the world as a whole, automobiles contribute only about seven or eight per cent of carbon emissions. In North America, it’s probably twice that. So even if you give up a car, even if everybody gave up their automobiles, the best result possible would be a marginal reduction,”
The truth revealed.
Gimme my diesel belching F-350…..
simple, rescue for sure. too big to fail!
I was pulled into an online group, where everyone’s goal is to have 10+ investment properties. You are a loser if not.
everyone needs a shelter, rental is sky high as well, you like it or now, you have to buy. We also have a government that is so left and a central bank boss whose words actually meant exact the opposite, so rule of gravity doesn’t apply to Canadian RE.
#113 crowdedelevatorfartz on 05.20.23 at 9:04 am
@#110 Whr.Dover
A MW = 1,000,000 watts
A Mwh = 1,000,000 watts/hour
_______________________________
#98 Bdwy on 05.19.23 at 2:30 am
73 Wrk.dover on 05.18.23 at 8:15 pm
It would be nice to have a carbon credit for the 20 megawatts of solar power we produced on our roof
. .. .. .. ..
Thanks for the help Furz! As you can see here, the original posting never referred to hours. But the Maga guy started arguing it did, and somehow I started including it in my flurry of frustration defending truth.
When I log into mu account with Enphase, (ENPH Nasdaq, Market cap 22.25 billion USD), they tell me I have produced 20.5 Megawatts of power.
I trust Enphase to know what a Megawatt is.
I trust Bdwy to argue like a republican.
Everyone should learn something from this story, energy units are could well be the base of currency eventually.
#113 crowdedelevatorfartz on 05.20.23 at 9:04 am
#110 Wrk.dover on 05.20.23 at 6:17 am
#97 Bdwy
A joule is a quantity of energy.
A Watt us a joule per second = rate of energy burn/transfer
A Watt-hour is a quantity of energy equivalent to using energy at a rate of one watt for an hour. units are W*h
If you do the unit conversion, a W*h boils back down to joules which, again, is a quantity of energy.
The prefix for mega, meaning million, is a capital M. the prefix for milli, meaning on thousandth, is lower case m. The unit Watt is abbreviated with a capital W.
So, let’s revisit:
First, 2mW is 0.002 W. Small. One calculator amorphous silicon cell aught to cover that draw. Second, if you meant MW, simply divide rated panel power into total W. 2,000,000 / 225W = 8,888 panels. Round up to 10,000 panels not 120,000… But what’s an order of magnitude among friends?
Neither are relevant as it was pretty obvious to me that Wrk.dover meant 2MWh.
Nobody ever meant mW nor kw.
TSLA investors… easily duped and struggle with facts. Par for thr course. Shrug.
Thr. Instant karma. LOL
With a 70-90 year amortization who would bother keeping the house. Simple math will show it’s cheaper to rent long term. Most houses need significant reno’s every 20-25 years.
If they do hang on we will see a lot of 75 year olds working.
I forgot, people can’t do basic math anymore. “just tell me the monthly payment”
“So, what are the odds? Crash or rescue? Decide”.-Garth
Nice escape route Garth.
But, you are the finance guy… what is your take?
How did the Rescue work in 2008?
You are suggesting something they already did. And assuming will try again. Recall in the USA homes imploded and Canada went on its merry way.
The odds of this just happening for eternity is about as absurd as current price of a home in Canada. This will end-no different than every other bubble. Period.
And musing about a bailout is about as bad as Tiffs famous “interest rates will stay low forever” comment.
What I don’t see when people are talking about 30 to
70 year amortizations is the life happens.
You loose your job
You have to move to another city town or province
You get divorced
You grow out of the house. Ooopsie.
You die.
If you have to write a big fat check to the bank and there is no equity in your house then I think that would be pretty distressing.
Stresses in the Chinese real estate market? https://www.youtube.com/watch?v=oJf79iP1DIA
It seems like the answer will be somewhere in between. Incomes have and will continue to rise over the next 3 or 4 years and at the same time amortization will have to adjust to 30 or 35 years – a 30 yr MTG @5% is roughly 10 percent higher than a [email protected]. Well within a margin for pay increases and manageable with some budgeting
This blog introduces some spicy meatballs! Things are clearly out of hand here with housing costs and someone needs to be an adult and show some real leadership to come up with solutions. Pepe appears to be a charlatan but is the only alternative to a T2 government that has not come close to living up to its mandate of providing affordable housing too the “middle class”. They are not solely to blame (we are, partially, as a society) but will just continue to dig deeper holes with bad policies to pander to voters craving the opportunity to live like their parents.
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