Yet another article trying to deflect blame from the government.
Cut immigration back to 2014 levels, set the rules about international students being able to work back to what they were in 2014, set the RRSP Home Buyers Plan withdrawal limit back to what it was in 2014, abolish the FHSA, and roll back all the government's laws concerning mortgage amortization periods and tax credits for homeowners to what they were before Trudeau got elected. See if it's still 'the banks' then.
There's other stuff in the article that would pre-date Trudeau, but I think you're right that it's all a mix of these things coming together.
"The report shows that banks play a major role in the rental crisis, yet the depth of their influence is rarely acknowledged by the media, mainstream economists, or the real estate insiders whom news outlets often cite.
When large landlords, developers, or pension funds seek commercial financing to buy apartment buildings, banks evaluate the deals using formulas that reward owners who push rents higher. The most important metric here is what’s called the debt service coverage ratio."
It's when you add to that these other elements (plus plus plus) but ultimately we're reverse engineering from crisis, rather than starting from perfect and working our way back.
The government can do all of those things right now. Those were regulatory changes designed to pump the price of real estate, and simply rolling those regulations back to the old ones would help return the market to normal. The FHSA especially is only two years old, and the budget last year that instructed banks to extend mortgage amortizations to infinity to allow people to make their payments at higher interest rates is easily u
i really doubt its the rrsp home buyers plan and the fhsa that's triggering these high prices. Well at least not the fhsa. The fhsa became available in 2023 of april. Even if you maxed it out it the total 24,000 as of right now. Housing prices peaked in 2022 with low interest, low interest was the fault of central bank. However it's government policy that did force their hand.
Banks follow. They don't lead or make the rules. The government does that, and it does it through means like last year's budget where it ordered the banks to extend mortgage amortizations to infinity so people could keep their monthly payments low in order to keep their overinflated speculative assets.
Third, the enhancements to the Canadian Mortgage Charter will also include an expectation that, where appropriate, permanent amortization relief will be made available to protect existing homeowners that meet specific eligibility criteria. Amortization relief means eligible homeowners can reduce their monthly mortgage payment to a number they can afford, for as long as they need to. “Amortization” refers to the length of time a homeowner has to repay their mortgage; amortization relief can lower mortgage payments by stretching out this length of time. Thanks to permanent amortization relief, those homeowners who are most at risk are now better positioned to stay in their home and retain control over these important life decisions.
These are the gravy days for landlords. Most of them exist decade after decade in a slow motion world of low to moderate income. Then along comes Covid and an immigrant flood, soaking up everything, et voila! Suddenly landlords are making money like tent venders during a gold rush. Of course they are going to gouge: that is how supply and demand works.
The annoying thing is that lots of people saw the need to build more supply over the past 30 years, and we kept getting told that “the market” would handle it. But it didn’t, because the developers made bigger homes that made them more money in shorter amount of time with fewer red tape hassles.
The way that eastern European countries handled this was to quickly build thousands of apartment buildings that were not fancy but provided one and two bedroom homes. For that to happen here the government has to step in, override local rules and sensibilities, so that every city sees clumps of dozens of apartment buildings going up, often where people did not imagine that would happen.
As a former bank employee I can state with absolute certainty that banks are complicit in the housing fiasco. I can think of one case in particular where a bank employee was colluding with a family member at a competing bank. This employee was observed manufacturing documents for clients. This occurred dozens of times over multiple years with the family member working at multiple big FI’s. When I reported it to not only my leadership but to the other Banks they did nothing and the investigation was stopped. Banks know full well that a large number of mortgages were not worth the paper they were printed on but choose to fund them anyway. It is my opinion that Canada could positively impact the current housing crisis in a significant way by re-evaluating mortgages issued in the last 10 years. Where there is fraud, seizing the asset and fining the financial institution.
Truly. I've mentioned before but like over 50 of the 103 recommendations from the money laundering inquiry they did in BC had to do with the real estate and financial industry and insufficient tools to get a better grapple on money laundering.
"In this release, people who own multiple residential properties are those whose name is on the property title of more than one residential property within a given province or territory. For the purposes of this release, people who own one property in a given jurisdiction and a second property in another jurisdiction are not included among multiple-property owners at this time"
So the select provinces they have data on they are saying if owners live in an excluded province then it would not be captured here.
The Bank of Canada found one in five mortgages since 2014 were by investors (this was using data prior to the big jump in 2021/22) and wasn't counting cash or corporate purchases.
Canadian banks are a solid investment because they know how to make money, decade after decade. So for sure they make money from every version of the housing market. They don’t independently set mortgage rates: they charge a slice more than the rate set by the government.
Yet another article trying to deflect blame from the government.
Cut immigration back to 2014 levels, set the rules about international students being able to work back to what they were in 2014, set the RRSP Home Buyers Plan withdrawal limit back to what it was in 2014, abolish the FHSA, and roll back all the government's laws concerning mortgage amortization periods and tax credits for homeowners to what they were before Trudeau got elected. See if it's still 'the banks' then.
The government regulates the banks. It is still a failure of the government.
I too would love a time machine.
There's other stuff in the article that would pre-date Trudeau, but I think you're right that it's all a mix of these things coming together.
"The report shows that banks play a major role in the rental crisis, yet the depth of their influence is rarely acknowledged by the media, mainstream economists, or the real estate insiders whom news outlets often cite.
When large landlords, developers, or pension funds seek commercial financing to buy apartment buildings, banks evaluate the deals using formulas that reward owners who push rents higher. The most important metric here is what’s called the debt service coverage ratio."
It's when you add to that these other elements (plus plus plus) but ultimately we're reverse engineering from crisis, rather than starting from perfect and working our way back.
The government can do all of those things right now. Those were regulatory changes designed to pump the price of real estate, and simply rolling those regulations back to the old ones would help return the market to normal. The FHSA especially is only two years old, and the budget last year that instructed banks to extend mortgage amortizations to infinity to allow people to make their payments at higher interest rates is easily u
i really doubt its the rrsp home buyers plan and the fhsa that's triggering these high prices. Well at least not the fhsa. The fhsa became available in 2023 of april. Even if you maxed it out it the total 24,000 as of right now. Housing prices peaked in 2022 with low interest, low interest was the fault of central bank. However it's government policy that did force their hand.
You gotta be some kind of moron to not think that banks have a role in this.
Banks follow. They don't lead or make the rules. The government does that, and it does it through means like last year's budget where it ordered the banks to extend mortgage amortizations to infinity so people could keep their monthly payments low in order to keep their overinflated speculative assets.
https://www.canada.ca/en/department-finance/news/2024/04/putting-home-ownership-back-within-reach-and-supporting-canadian-homeowners.html
Mortgage fraud exists.
Yet another person trying to deflect blame away from landlords.
These are the gravy days for landlords. Most of them exist decade after decade in a slow motion world of low to moderate income. Then along comes Covid and an immigrant flood, soaking up everything, et voila! Suddenly landlords are making money like tent venders during a gold rush. Of course they are going to gouge: that is how supply and demand works.
The annoying thing is that lots of people saw the need to build more supply over the past 30 years, and we kept getting told that “the market” would handle it. But it didn’t, because the developers made bigger homes that made them more money in shorter amount of time with fewer red tape hassles.
The way that eastern European countries handled this was to quickly build thousands of apartment buildings that were not fancy but provided one and two bedroom homes. For that to happen here the government has to step in, override local rules and sensibilities, so that every city sees clumps of dozens of apartment buildings going up, often where people did not imagine that would happen.
As a former bank employee I can state with absolute certainty that banks are complicit in the housing fiasco. I can think of one case in particular where a bank employee was colluding with a family member at a competing bank. This employee was observed manufacturing documents for clients. This occurred dozens of times over multiple years with the family member working at multiple big FI’s. When I reported it to not only my leadership but to the other Banks they did nothing and the investigation was stopped. Banks know full well that a large number of mortgages were not worth the paper they were printed on but choose to fund them anyway. It is my opinion that Canada could positively impact the current housing crisis in a significant way by re-evaluating mortgages issued in the last 10 years. Where there is fraud, seizing the asset and fining the financial institution.
https://www.cbc.ca/news/business/td-bank-penalties-1.7348819
Wow so Biden-era DOJ is more on the ball than Canada. This is a new low.
Truly. I've mentioned before but like over 50 of the 103 recommendations from the money laundering inquiry they did in BC had to do with the real estate and financial industry and insufficient tools to get a better grapple on money laundering.
StatsCan doesn't even have complete data on how much housing wealth is concentrated in how few hands. So think of the numbered corporations folks set up for their spouses or kids to buy up and rent out housing. https://www150.statcan.gc.ca/n1/daily-quotidien/220412/dq220412a-eng.htm
This limitation is stated deep in the footnotes:
"In this release, people who own multiple residential properties are those whose name is on the property title of more than one residential property within a given province or territory. For the purposes of this release, people who own one property in a given jurisdiction and a second property in another jurisdiction are not included among multiple-property owners at this time"
So the select provinces they have data on they are saying if owners live in an excluded province then it would not be captured here.
The Bank of Canada found one in five mortgages since 2014 were by investors (this was using data prior to the big jump in 2021/22) and wasn't counting cash or corporate purchases.
https://www.bankofcanada.ca/2022/01/staff-analytical-note-2022-1/
Water is wet.
Canadian banks are a solid investment because they know how to make money, decade after decade. So for sure they make money from every version of the housing market. They don’t independently set mortgage rates: they charge a slice more than the rate set by the government.
immigrants cant mask years of dirty money