The house horny vote

They weren’t expecting Trudeau to do that.

So when T2 announced the share-equity mortgage program – in place for a mere 10 days – would be wildly inflated, it hit the Tories hard. As politics, it was brilliant. As complex, impractical and bizarre as it is to share your mortgage with the federal government, the plan nonetheless fit into a Tweet. “Too many people are finding it tough to afford their first home,” Mr. Socks said on Twitter in the very first campaign announcement. “We’re going to do something about it.”

Too many people are finding it tough to afford their first home. We’re going to do something about it:

Expand the First-Time Home Buyer Incentive so it’s easier to buy a first home
New tax on properties owned by non-Canadians who don’t live in Canadahttps://t.co/Ws2IwfPVny

— Justin Trudeau (@JustinTrudeau) September 13, 2019

Suddenly houses worth up to $800,000 qualified for a downpayment stuffed with tax dollars – but only in those cities were prices are bizarre. Turns out they’re also regions (Van, the LM, 416 and 905) where Liberals need lots and lots and lots of ballots. Moreover, the Trudeau team is out to suck up the entire Millennial vote. Give ‘em weed, then get ‘em a house.

At the same time young Scheer is being painted as the New Harper (only worse), who’s real agenda is outlawing abortion, doing Doug Ford-style spending slashes and populating his front benches with scary white power, anti-Muslim knuckledraggers.

How do you like the election so far?

Anyway, housing policy was the very first thing the Libs trotted out – not the economy, jobs, taxes or trade – so you can tell where this is all headed. And rest assured the Cons will recover and fight back. I hear there are two initiatives on the agenda:

• Debone the stress test, &
• Bring back 30-year insured mortgages.

This is meant not only to counter the Trudeau assault, but also solidify the blue vote – namely in pissed-off Alberta. As reported here, the barbarian lord of that principality, Jason Kenny, has already attacked the stress test saying it’s an evil thing designed to punish speckers, flippers and girlymen in Van and Toronto and has only made a bad recession worse in AB. Backed by the real estate cartel and the developer lobby in Calgary and Edmonton, these people point out house prices there peaked over a decade ago and have been languishing since. As long as new buyers are forced to qualify for loans at twice the market rate, nothing will get better, they contend.

Meanwhile, the current federal government has already increased the RRSP home Buyers Plan limit by a huge 40% (to $35,000 per person for a down payment), and now brought in a coast-to-coast anti-Chinese-dude ownership tax. The Cons will counter with making it easier for moisters to qualify for, and carry, fat mortgages. The NDP, of course, is irrelevant.

In short, this is turning into a house horny election. Our first ever. And it’s not good.

A few days ago (Friday), T2’s own government quietly released the latest debt figures. Now we owe, on average, 177% of what we earn. That’s up by almost to-thirds since 2000 – before we turned houses into investment assets. Servicing all this debt takes more income than ever before. And that explains why the national savings rate sucks. Houses are bleeding us dry – yet governments continue to prime the pump, arguing that, “Too many people are finding it tough to afford their first home.”

The political meme is that owning a house is a right. Our two major parties work hard to make you believe that and suggest something’s wrong when home ownership is only 70%, not 100%. What a dangerous farce that is.

The courageous boss at CMHC, Evan Siddall, has argued against this lunacy and vehemently supported maintaining the stress test to prevent people from buying properties they can’t afford. The Bank of Canada says over and again that the greatest vulnerability in our economy is household debt. The debt-to-income rate has never been higher. And yet the people running the country continue to do things to encourage borrowing, make buying easier and jack prices – leading to more debt and less affordability. How is this not a vicious circle?

Of course the correct policy is to let the real estate market correct rather than feeding it. Maybe renters ought to be subsidized, to reduce demand. Perhaps the 5% down payment threshold should be 10%. Maybe lefty Adam Vaughan is right and house profits should be taxed like investment gains. And why are we letting people raid their retirement savings to buy real estate at a time when pension plans are croaking?

Just wondering. Also confirming why I’m utterly unelectable.