Adamtheman, It’s not a fact only if one closes their eyes and pretends those of us who say a correction will happen aren’t saying a correction will happen.Why isn't the fact that real estate has tripled over 10 years enough for it to drop?...
Because none of you understand the brilliance behind the manoeuvres by OSFI and Flaherty regarding the new mortgage rules and the CMHC. Reading these posts leaves the distinct impression that you crash proponents expect that all insured owners will suddenly and all at once default on their loans thereby enriching the mortgage cos vaults with $600 billion in cash – no subrogation, no mitigation of losses, nothing. That is absurd! That’s akin to expecting every car owner to suddenly crash and demolish their cars wherein the finance cos then bankrupt the insurance cos.... why won't the CMHC debt ceiling be enough to cause that? No one seems to address the CMHC debt ceiling issue here.
I said it many months ago when others were pontificating about CMHC’s ceiling being imminently breached that they would not be increasing that ceiling this year – and they will not. Anyone who thinks the announcement that the government was going to privatize CMHC was a faux pas by the media should think again. Harper actually put out an unofficial invitation to tender and only triple A Canadian registered insurnace companies need apply. The very intention of all the changes this year are to ensure that renewed (insured) mortgages are not increased and those that can’t meet the requirements must sell. Therefore any increase in the insurance in force is expected to be offset at the very least by deadwood sellers. If any increase to the limit is required it will be minimal and instituted only for CMHC’s purchasers’ benefit next year.
That’s a nice chunk of change hitting Ottawa’s coffers isn’t it?
I do not write it off as insignificant you prefer to think I do. That you won’t recognize the truth to my statements that those mortgage renewals started coming up for renewal 16 months ago means that you would rather dismiss the fact that only 12 months remain until the vast majority of all 40 year mortgages issued have run off. None could have been issued after November 2008. That 40 year terms taken over 16 months worth of the 29 months have long been removed from the books eludes you. So your following statement is irrelevant:Why? Let's see... in 2005 as you mentioned, the government introduced the 40 year mortgages. You write this off as being insignificant, yet I disagree.
With the rest of your statements it appears you’ve now switched your argument to the reason for the bubble as opposed to whether or not the market will correct or crash.I wouldn't finance someone for a 40 year 0% down mortage, would you? But the government did. They backed it all.
The causes are now irrelevant to the current direction of this market because we cannot go back in time and undo them. The real estate market will always experience peaks, corrections or crashes for various reasons some of which will be unavoidable.