I hope you’re right. However, as long as people are able to service their debt payments we’re fine. So that’s why I think we need to have rapidly increasing int rates and/or a deep recession in order to have cascading defaults.

We’re not talking about a 10-20% correction here. I assumed when you say coming down, you’re expecting a 40-50% crash. If not, I totally agree that we’ll see 10-20% declines.

Debt will bring it down crashing. The highest household debt-to-GDP ratio among the top 35 developed and developing countries.

It is also the answer to all those “we don’t have NINJA loans here” arguments so readily presented by the RE industry.

I agree that foreigners get the ball rolling, up or down. I also agree that they’re significant.

“This market is coming down crashing no matter what” – how do you have so much confidence? What do you think will drive this crash? Unlike the US we didn’t have NINJA loans. I’m not saying that our market is due for a correction/downturn, but what is the catalyst?

The US had rapidly rising rates. We don’t have that. They had massive job losses, which we haven’t had. So it’s hard to see how we would see a rush of defaults. UNLESS, rates shoot up quickly. Then all bets are off.

If we somehow returned to 5-6% mortgages, it’s game over. But I doubt we’ll see that.

Of course the bulk of speculation is local, my wild guess is that the ratio roughly follows the 80/20 rule. The big mistake would be to claim that 20% of foreign speculation is insignificant. It’s a huge number more than capable of driving the market in any direction in the short term.

This market is coming down crashing no matter what. The question is, if Canada wants to have a housing market – a foundational pillar of any healthy economy, or it wants to have a commodity RE market instead of economy.

I tend to agree with you but it’s a bit shortsighted. When that shady money came in, they had to buy the land/properties from locals. So that money was then circulated into the greater Canadian economy. Those sellers could’ve started businesses, invested in businesses, etc.

So we can’t say it didn’t help. One could even argue that the huge RE related economic gains helped us weather the last 8 years.

I would rather that our housing markets return to markets for locals but I think that ship has sailed. It is what it is and I don’t think government will directly save us.

This is the 100% true. Eliminate CMHC and this game is over. We don’t even need it anymore. It was first created to allow returning soldiers to buy homes and start their lives. Now we have 70% ownership, why do we need it? Oh that’s right, we need to protect our banker friends lol.

I get your premise. I agree that our housing market has become a commodity market. But don’t forget the main perpetrators are Canadians. Foreigners started the initial wave and then greedy locals took it over.

The real issue is that our decision makers are politicians who are in the business of staying in power. We need them to make decisions for the future benefit of Canadians HOWEVER, any major policy changes will destroy millions and potentially billions of dollars in home equity values in the country. Now, for people who purchased 10 years ago, they’ll be fine. They’ll lose some gains but they were illusory anyway. The young couples and people who purchased in the 2-4 years will be creamed. They’ll be debt slaves for a generation. That is politically devastating to whoever made the policy changes.

So while I agree that change is required. Good luck getting it. I think the combination of B20, rising rates and a potential NAFTA-driven recession will cause our housing market to drop 10-20% easy. We’ve already dropped 9% on SFHs. Condos are next.

FYI – I’m a renter and I don’t own any RE. I have been on the sidelines watching this $hit show. Should’ve speculated like everyone else but such is life. Now, I’m just waiting for the house of cards to tumble so I can make some opportunistic acquisitions.