Part 4 *Why didn’t we Stop the Boom before it Busted?

Updated July 11, 2018

NUMBER 4

Failure of the General/ConFederal and Ontario government departments of Finance/Revenue, Economics, Social Policy, Housing Policy, Landlord-Tenancy Policy, Taxation of HST, Income, Capital Gains, World-wide Income etc, Non-Resident Investment Policy and attitudes towards Tax Deferrals, Avoidance, Evasion and “they’ll never find me” Scofflaws to “nip” the Real Estate Price escalation as it moved from “recovery & appreciation” to “speculative”, “frothy” and finally to “irrational exuberance”

Notwithstanding the fact that there were an elongated series of “underwriting tightenings & stress-testings” at CMHC and the Lenders from ~2007 onward

PLUS some clamping down by CRA on Principal residence declarations

AND even though I really like the “Declaration of Intentions” that the Buyer must make now when arranging to pay the Ontario Land Transfer Tax (it really will help finding HST and Income Tax Scofflaws – congrats on this)

SO …. WHY DID ONTARIO WAIT SO LONG?

AND then do EVERYTHING … all at once … in late April 2017?

A boom (that would not speak it’s name) starting in 1996, with a blip in 2008-09 and then the ZERO INTEREST rate stimulus era of “borrow at 2% in a 2% inflation climate”  PLUS ‘as an investor it’s deductible’ became a wave, then a rally, a tsunami and then 16 measures announced at once and … poof, not with a bang but a whimper … the lights went out ….

WHY didn’t we think to introduce the +2% Qualifying for all Borrowers earlier – esp given the above paragraph on low interest and the HELOC phenomenon and MONO-Line Originations and off-loading to the CMHC-portfolio basket … and all that …why didn’t we slow it down in 2014-15. …. we are all to blame … not just the not-any-more-brilliant-than-we-are Stewards of the Crown’s Assets, Treasury and Citizenry in Ontario and Ottawa

4-CPI-adjTREBpricesVsNominal-JUNE2018

Part 1 — 7 or 9 rarely-noted points that absolutely must be discussed

Part 2 *Inventory, New Listings, Days on Market, Months of Inventory & Sales as%

Part 3 * More about Point of View – using The School Year Sept 1-Aug 31, 

Part 4 *Why didn’t we Stop the Boom before it Busted?

Part 5(i) * -The Two Solitudes of the GTA/GGHA

Part 5(ii) 905 vs 416 — A closer look (5 yrs) at the Price Dichotomy

Part 6 * Inflation & Interest Rates – Friend or Foe? 

Part 7 * The Adjustment Lag – the 3-phased time it takes 

Part 8 It’s demand that drives Realty Prices – supply is a by-product of Price engendered Fear, Greed &/or Opportunity 

Part 9 (and again in Late March of 2018) I’ve been wondering about the “Hot Market” Sales Spikes that occurred in Q1 of 1991 & 1994

 

8 thoughts on “Part 4 *Why didn’t we Stop the Boom before it Busted?

  1. Pingback: Part 1 * 7 or 9 rarely-noted points that absolutely must be discussed re Toronto/GTA Real Estate 2018 – or we’ll never get anywhere. Not now … and not then … First of 5 sets of charts below and on 9 more numbered-posts | unclebobex

  2. Pingback: Part 5(ii) 905 vs 416 — A closer look (5 yrs) at the Price Dichotomy | unclebobexplains

  3. Pingback: Part 7 –The Adjustment Lag – the 3-phased time it takes for a) registered practitioners, b) active Buyers/Sellers and then c) commentators/pundits &media shills to catch onto New Conditions and refocus their formerly useful “Lenses&#

  4. Pingback: Part 6 * Inflation & Interest Rates – Friend or Foe? TREB 1969 – 2018. The very ‘real’ component of appreciation that gets you nuthin’ except a bigger number 2) Low interest rates, a “leveraged” investment and

  5. Pingback: Part 8 – It’s demand that drives Realty Prices – supply is a by-product of Price engendered Fear, Greed &/or Opportunity (what can I buy with that increase in $$) But … there is always a transitional lag – a delayed wave

  6. Pingback: Part 6 * Inflation & Interest Rates – Friend or Foe? TREB 1969 – 2018. The very ‘real’ component of appreciation that gets you nuthin’ except a bigger number. 2)Low interest rates, a “leveraged” investment and

  7. Pingback: Part 6 * Inflation & Interest Rates – Friend or Foe? TREB 1969 – 2018. The very ‘real’ component of appreciation that gets you nuthin’ except a bigger number. 2)Low interest rates, a “leveraged” investment and

  8. Pingback: Part 6 * Inflation & Interest Rates – Friend or Foe? TREB 1969 – 2018. The very ‘real’ component of appreciation that gets you nuthin’ except a bigger number. 2)Low interest rates, a “leveraged” investment and

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