It is very apparent that when government gets involved in the free enterprise system, they only screw things up. As a proud Canadian and also being blessed to be in the mortgage industry, I have seen this mess building up with policies mostly being driven up by politicians. At Robert Floris’ Mortgage Architects Office in Hamilton, we shake our heads as to how the established is trying to manage the real estate industry when they can’t even balance their own budget.

Let us begin with a review of the past 10 years:

• stock market crashes in 2007
• government artificially lowers interest rates to stimulate the economy
• with rates low, people can now afford homes (this is good)
• CMHC come out with many exotic products:
  • 40 year amortizations
  • no money down payment purchase
  • refinances up to 95%
• economy and specifically building start to boom (this is a good thing)
• big banks are advancing all kinds of unsecured debt to Canadians (not good and government did not intervene)
• Canadian are paying $1.67 in debt for every $1 earned
• government cuts out all “exotic” products
• change banking rules where small boutique companies cannot play the same game as the big banks (unfair to the small finance companies, but more importantly to the Canadian consumer)
• government changes all the mortgage rules so it is very difficult for the average Canadian to be approved
• in B.C., real estate agents cannot double end a deal anymore
• in Toronto, the regional planners have done such a poor plan of making land available that the price has almost tripled in the last 3 years (look for more high density building in the near future)

It saddens me since this will have an effect in 2018. New purchasers will have to settle for housing 20% cheaper. Refinancing will be tougher. Financial stress will only increase and hopefully not have a great impact on the family household.

We will all adjust, we always do. But I really hope the government stops meddling and lets the market happen more naturally. The market has always rebounded. This time around should be very interesting.

Robert can be contacted at 905-574-9200 Ext. 215 OR by email at mortgages@robertfloris.com. You can fill out an application online here with absolutely no pressure and no obligation.

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