[Claeren]

The problem is that most people (sadly) buy the max that they can afford based on payments - not house price.

Therefore the market is not balanced. The point between buyers and seller is inflated and moved in the favour of sellers (and banks) as long as house prices grow and then crashes and destroys an incrediable amount, in America's case trillions and counting, in value that never should have existed in the first place.

I understand that in a perfect conservative world you would let people take that fall, unfortunately it is too destabilizing to society as a hole though and it is good to take action to protect most people from most people, even if some people do not need to be protected from some people.

It is worth noting that (according to the National Post) ~70% of mortgages this year in Canada have been for more than 25 years and that 35% have been for the full 40 years/0 down - with higher percentages of both in Calgary than anywhere else in Canada. That shows that affordability is gone and desperate people are resorting to desperate measures to get homes 'before they miss out completely'. In short, they are extending a bubble that should have burst 2 years ago.


Despite what speculators, real estate types and the newspapers they support through ad revenue tell you, on-going double digit home price increases are neither good nor sustainable. A couple percent above inflation year over year would indicate an economy outperforming the norm, but more than that and it is a bubble over time.


I would take this as a sign that higher-ups are finally acknowledging that Canada's housing boom is over and that price drops like (but not equal to) we have seen in the States are on their way shortly. This move will help remove some people from the fallout, forcing them to the sidelines for their own good. Buying on a 40 year, 0 down mortgage right before housing prices collapse is brutal - poeple just walk away form their homes hurting everyone (including themselves) in the process.


It is worth noting this WILL help a lot of long time home owners. It provides less support for prices in the short term but in the long term housing prices should stabilize sooner. There would be a larger group of renters and there will be less 'false demand' and thus 'false inventory' to work out of the system in Canada post-drop.


(Looks like much/all of what i said would happen in the old real estate thread is in fact playing out.

As an aside: *North American markets more expensive than Calgary? Hawaii, SanFran, NYC, LA, Vancouver (All comparable right? lol). *Prairie Cities more expensive than Calgary? 0! *Oil cities pricing compared to Calgary: $200k Houston/Dallas v. $475k in Calgary, and you get 50% more square feet on top of that! Brutal.)


Claeren.