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March 11, 2020 | Fake con

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

PUBLIC NOTICE: The following blog post has nothing to do with Covid-19. It is virus-free, devoid of any toilet tissue, and no respirologists were injured during its production. You are on your own.

Imagine it’s October. Biden vs Trump. And in Canada the newly-minted Con leader, Peter MacKay, is angling for a no-confidence vote in Parliament prompting a general election. Given the country’s ballooning federal deficit, the oil-induced recession, the Wexit barbarians plus the FN goofs and their economy-crashing barricades, he figures he can win.

So why would the guy be such a fool as to send out this note to his right-leaning supporters?

Buying a home is hard. The world isn’t what it used to be. The cost of housing has skyrocketed across Canada. That might be great for people who already own homes, but it’s bad news for people struggling to make their first purchase. Buying a family home is the biggest investment most people will make in their lives.

Right now, we have a federal government mucking around trying to look like they’re doing something about it, but they’ve come up with a crazy plan to have the government own part of your home.

They’ve increased the limit you can “borrow” from your RRSP – but there shouldn’t be any limit at all. Your RRSP is your money. You should be able to use it to buy your first home. As Prime Minister, I would remove the limit on how much you can withdraw from an RRSP to purchase your first home. I’d also remove the requirement to “pay it back.”

This is a Conservative solution. Government getting out of the way instead of creating more problems with more expensive programs.

Seriously. Has Peter been kidnapped by a bunch of homeless weedy moisters, held down and plied with edibles before coming up with a platform? How can a conservative thinker ever devise such a ridiculous, counter-productive, market-distorting, pandering policy?

First, an RRSP ain’t all your money. A big hunk of it is unpaid taxes. When contributions are made, income taxes are returned. When you take money out, the tax is repaid. By letting people turn their RRSPs into downpayments, never having to return the money into their registered accounts, or pony up the tax, the cost to all taxpayers would be in the billions. In effect everybody would be subsidizing the few in a grossly unfair fashion. Nothing conservative about that.

Second, RRSPs were created to help ensure people can retire without becoming wards of that state. Now that corporate pensions are gone for 70% of the population and the savings rate has collapsed, it’s more critical than ever that folks amass some serious assets for the last third of their lives. Allowing people to take those diversified investments and dump them into a house, becoming less self-sufficient and more dependent on government retirement pogey, is nuts. And it’s sure not conservative.

Third, if PM is worried about people not being able to afford houses, how is throwing billions in taxpayer-subsidized dollars into the market supposed to help? Increasing demand is no way to restore affordability. Quite the opposite. This policy would create a real estate gasbag of Biblical proportion. Pure market distortion. How is that conservative?

Meanwhile a certain germ that will remain nameless in this virus-free posting is busy nibbling away at mortgage rates.. A fiver will be 1.99%, which means home loans could slide into negative territory – less than the inflation rate – boosting purchasing power and suppressing the stress test. Surely a good con would be happy to sit back and let market forces prevail, instead of deep diddling like the Libs love to do.

“I’ve been a card carrying Conservative since the party was formed in 2004,” says one of this pathetic blog’s heathen readers. “Was Reform/Alliance for 15 years before that, I will not be maintaining a membership if this is the type of thing the party now stands for.”

Advice to Peter: the kids are all commies. Ignore them. If they can’t vote with an app, they probably won’t bother. Just be a conservative. That would be refreshing.

*     *     *

So, you ask, whazzup with Van real estate? Realtors say things are getting way better. Multiple offers. Rising sales. But many disagree. Meanwhile the Horgan Dippers increase housing taxes at every opportunity, chase rich people away and repel foreign buyers (the few who remain).

According to local analyst Dane Eitel, the carnage has only just started. Current condo prices (average $666,000) are down 11% from the peak, and by this time next year will have dropped to $525,000 – a beefy 30% correction, and a big surprise to current buyers.

Spring will bring more inventory, Eitel says, and meanwhile a lot of units bought in pre-con developments years ago are coming online.

The frenzied presale market of 2016 is beginning to rear its ugly head. Those pre sold properties are just beginning to hit the market. Some buildings are seeing 25% of the building for sale while an additional 25% of the building is for rent. Meaning 50% of the building is available in one way or another. This does not bode well for the overall market as this is just one early example.

His advice? If you own a condo in YVR, bail. “This opportunity to sell with less competition is rapidly closing. Eitel Insights urges those thinking of selling to act now before you become another casualty of this upcoming chaos.”

Ah, chaos. Come back tomorrow. Bring Charmin.

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March 11th, 2020

Posted In: The Greater Fool

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