WHY PAY $500,000 MORE AS INTEREST AND DOUBLED MONTHLY PAYMENT?

Hubble and Bubble

In 1990, few months after Canadians saw 1989 housing bubble, 11 tonnes Hubble Space Telescope (HST) was placed just 570 km away from us up there. Since then it is sending the clear signals and images we enjoy.

Unfortunately economists don’t have that kind of eyes yet and still predict future based on past figures. Economists don’t understand that engineering is different. Last year Bank of Montreal’s Chief Economist Doug Porter said that Toronto, Ontario Housing
market has a bubble which was a wrong signal and a wrong prediction because
there was no bubble.

Federal government was watching it closely, consulted with the Bank of Canada and came up with new mortgage rules. With bubble news and tougher mortgage
rules the housing market slowed down but prices remained flat. Desperate sellers sold at lower than their expectations because there were fewer buyers. Buyers were waiting and still waiting for the bubble to burst which is not going to happen. Having said that the prices are not going to increase the way it were increasing for almost a decade.

Good economy, higher wages, low mortgage rates and foreign buyers are blamed for higher home prices in the country especially In British Columbia and Ontario as well as in Quebec. BC took lead and imposed 15% foreign buyer’s tax (FBT) and when the market didn’t respond much they imposed an additional of 5% and made it 20%. To skip the tax foreign buyers moved to Toronto and the condo market jumped. Ontario government took advantage and imposed 15% FBT, for some it’s just a tax grab.

The main sources of foreign buyers are countries that either have surplus foreign
currency or countries facing wars. China is loaded with billions of dollars and Arabian countries affected by war posses’ gold and diamonds. Wealthy people leave
troubled area, reside and spend in trouble-free zones like Canada.

Again, talking about 1990, the world noticed that China who is manufacturing and exporting only 1.9% of the world’s total exports will rise and its export will jump to 4.7% in just few years. It was true, it did. It will wipe out the European export market that was not predicted nor assumed. China has surplus foreign currency and is ready to invest and Canada offers the best soil to them with freedom and dignity.

A year later in 1991, the Gulf War erupted. After a decade war with Iran Saddam
Hussain thought he should be the leader of the entire Gulf. He started harassing
his neighbours but no one took him seriously. To show his teeth he entered in Kuwait and the rest is known to the world. Pakistan was next in trouble fighting with Taliban the entire country was in un-rest. People in the troubled areas around the world saw no future in their regions and dispersed in Europe, Asia, Canada and United States. They are the one shelter means everything to them, money is secondary.

Cities need housing market grow to keep the taxes low because builders pay high development costs. Builders are like family jewels. Knowing the fact builders have increased the prices to an un-affordable level, that is dangerous. Low wages, higher unemployment rates and higher mortgage rates create un-affordability that triggers sell-off means bubble burst.

Covid-19 Defeated

For the first time in history global economic calamity was triggered due to a virus. All flights were shut down, the entire world was put

OPPOSING CAPITALS

OPPOSING CAPITALS India and Pakistan fought two large scale wars in 1965 and in 1971, and two small scale wars in 1949 and 1999. The

WHY PAY $500,000 MORE AS INTEREST AND DOUBLED MONTHLY PAYMENT?

Hubble and Bubble