OPINION: CMHC insurance has shifted from enabling homeownership to inflating prices

The Canada Mortgage and Housing Corporation (CMHC) mortgage loan insurance program is a government-backed initiative that allows homebuyers to purchase properties with less than a 20 per cent down payment.

Initially designed to help Canadians without significant savings enter the housing market, CMHC insurance has since become the single greatest catalyst of real estate demand in the federal government’s arsenal.

Interesting article from REM (Real Estate Magazine) — full story from REM Magazine (click).

Dan’s comments:

I have been telling clients for several years now that the understanding of basic economics is all that is needed to understand what different government and banking policies have done to “affordability” of homes in Canada. Follow the money — follow the votes. Don’t listen to people that make money or gain power by pretending to make it easier for a new home buyer to buy a home. If it’s easier for everyone to spend more, then there are more home buyers, then prices go up.

Question “the experts”! Do you think the economists from banks and CEO’s of Real Estate companies just might benefit from more sales and busier real estate markets? Do you think that their jobs and income might be directly tied to number of home sales? Why would you base your home buying decision on what these “experts” say?