Tuesday, 16 February 2010

Making it Harder to Own?

Jim Flaherty obviously recognizes my wisdom.

But I have a quibble:

The new [tightened mortgage] rules are meant to ``have some stabilizing effect” and encourage ``moderation” in the market, Mr. Flaherty said. When asked if that means the moves will push home prices lower, the minister said the main purpose was to curb the type of ``excesses” that helped fuel the subprime-mortgage meltdown in the United States.

Mr. Flaherty please understand. Home prices are already too high for the average Canadian. Truth is, we can't afford what is out there now. Holding prices back will not help the excessive debt load Canadians are under.

Canadian household debt soared to a record average of $96,000 last year, and more families were behind in paying their mortgages, according to a study by the Vanier Institute of the Family.

The number of mortgage payments at least 90 days late was up 50 per cent in 2009, compared with 2008

The message is out there, but no ones listening.


Ken Breadner said...

This whole mess started when people began thinking of "homes" as "investments" rather than "places to live and raise families". I don't see it ending any time soon, because there's a sizeable subset of people who have no attachment to their homes except insofar as they can make money.

Catelli said...

True enough Ken. The only solution I can conceive of is to make gains on home sales taxable (assuming you are not moving into another home as a primary residence).

That would crimp the speculative investment market.