The Government DOESN'T Want Home Prices to Come Down!

[00:00:00]Hello and welcome back. Thank you for tuning in. So, we have yet another government bailout messing with the free markets, keeping prices elevated for you, the buyers, and it's not good. They they shouldn't be every time bailing out who and who knows who they're bailing out. Who are these developers? Are they connected to them? And the banks involved in these deals. The banks finance these commercial projects now, too. So, they're saving the banks.

[00:00:26]They're saving the developers. And you know damn well that Mark Carney and Doug Ford, they're connected. They know people. They know what they're doing.

[00:00:35]This is not innocent. You'll see stuff come out after that. You know, they had some connection or somebody knew somebody. Now they're getting better at it, especially Doug Ford. But it doesn't matter who they are, if it's the Liberal government or the progressive conservatives. They seem complicit in bailing out these people, keeping prices elevated for you. Prices are declining, but these guys are trying to put a floor underneath. uh the the developers don't want to take a loss, so they're helping them out. Again, messing with the free market. This is crony capitalism. And somebody mentioned on one of my posts like this is the end of capitalism when this happens. So, yeah, not good situation, but we're going to check out the facts today and some other information. So, let's get right into this. All right, so here's an article from the Fraser Institute from June 15th. Ontario government should not bail out housing developers who made bad decisions. It's true. You make a bad decision, you shouldn't get bailout.

[00:01:24]about the buyers that made bad decisions in 2021 and 2022. Should we bail them out, too? I know they gave them certain perks already with uh extended advertisations and whatnot, but uh yeah, no, you shouldn't. And this article makes some great points here. The Ford government plans to invest $300 million to purchase 2,200 vacant Toronto condos and convert them into rentals. But in reality, this move may reward poor performing developers for their own bad decisions and keep condo prices out of reach for wouldbe buyers. Very true.

[00:01:56]Shoe box condos, here you go. No problem. You guys built crap products.

[00:02:00]There you go. Just like in 2008 with the uh automaker bailout. GM and Chrysler, they weren't going to make it. And it would have been good. They would have had to restructure, redo things, and offer better products. But no, they had products just like these are condos. and the government comes to save them. And this is everything you've it goes against everything you've been taught in life. Like this is what you kind of get on Timbit soccer. You know, everyone gets a medal at the end. Well, this is what they're doing here instead of uh true capitalism in reality where if you don't have a good product, you're not going to succeed and yeah, they're just rewarding them for having shitty products. That's a real problem for developers trying to sell or rent these condos, but it should not be a problem for Ontario taxpayers. Very true. you know, you're going to get special assessments. You're going to get an audit and it's all to fund these things.

[00:02:50]So, it's not like your tax dollars are already have already been collected for this. They're going to keep collecting more and more tax dollars as they keep racking up the bills for things like this and they're going to come after you and they're going to increase the HST or they're going to audit you and they're going to pick your pockets and it's happening. You'll see it. So, that's why they hired all those CRA agents to come after you to fund their lifestyle. Not only does the government risk overpaying for these condos and weakening the competition that would otherwise push down condo prices, it may also shield developers from the consequences of their poor decisions. A developer that builds the wrong homes for the wrong price should bear the financial consequences of those decisions. That's not only fair, it's the foundation of competition in the housing market. Very true. Again, based on the Ford government's plan, developers who made undesirable condos may get to sell them to the government instead of having to price them low enough to attract home buyers or renters. That makes the government's investment a taxpayerf funded subsidy for poor performing developers. And from the bureau, the moral hazard on steroids, the investor who called the big short says Carney's condo bailout is worse than 2008 subprime fiasco. Mark Coades made his name betting against the US subprime collapse. He says Ottawa's $3.2 billion plan to absorb Vancouver's unsold condos is the same mistake in reverse. And let me tell you, people are not very happy about this decision from Carney and of course Ford too, but Carney is a federal decision here. And let's listen to some key points here and then we're going to read some reactions. Just a few, but there's many out there. I have not seen anyone sticking up for them. Too many completed condos sitting empty. In Metro Vancouver alone, around 2500 finished units are standing vacant with no buyers. With higher interest rates, weaker investment demand, developers are stuck. They don't want to sell at a loss. They can't afford to hold those empty units indefinitely. We will convert vacant condos into affordable housing. Uh condos that have been built, that are unoccupied, that are going to sit there potentially for another couple of years. we're going to go use the right financing mechanisms, convert those into affordable housing so people can move in and use that.

[00:05:06]>> You see his language with his thing.

[00:05:08]He's like, we're going to go and we're going to like like this is what he's doing to try to convince you. And he doesn't seem very convincing in the beginning. He's very low energy and is like, yeah, he's he knows he knows he's up to something here. And anyway, let's read some other uh comments and disgust on this. Anyway, Steve Sesi said, "This is totally bananas." And it is. It's true. You're you're you're messing with the Well, it's not a free market. I I'm mistaken. We hasn't been a free market for a while, but they're blatantly doing it now out in the open, and it's just total anarchy when it comes to this kind of stuff with the government. They just don't care. Here's one from Hargie Singh Gill. Hardworking Canadians are working six days a week, taking second jobs, struggling to keep their homes, facing long hospital wait times, and paying hundreds of thousands of dollars to send their children abroad for education because spaces in Canad in Canada are limited. Now, we're told taxpayers should help developers who don't want to sell at a loss. If families, homeowners, and small businesses must live with the market risk, why should developers be treated differently? What is the plan for Canadians? Canada simultaneously has a housing shortage of 3.5 million homes and a glut of unsold condos that the government just spent $3.2 billion bailing out. This is how you know the economy is broken. This is what happens when speculation runs rampant. The the condo developers, they were speculating on the land. They knew fundamentally that these things didn't make sense, but they just looked at what sold last and let's just keep going, right? This will never end. We just got to keep pumping money into this. They didn't they didn't think about affordability for Canadians.

[00:06:40]They didn't run the numbers. They didn't think about the household income to average home price ratio or any of this stuff. They just said, "Hey, how much money can we make? Let's just pay more for the next piece of land and let's just keep this thing going." Doug Boswell, why should taxpayers who cannot afford to buy a home have their tax dollars used to bail out developers?

[00:06:56]Developers are business people. They took a gamble and lost. Very good point.

[00:07:01]These taxpayers, so like you might not even own a home and you're paying for these condos, for rentals for other people. And if you don't think you are, you are. It's going to come back sooner or later. It's coming right out of your tax dollars. They're going to hit you with more taxes, special assessments, audits. I'm telling you, it's happening.

[00:07:16]Another one here. Let me guess, Brookfield is in the condo building business from Lisa. Canadians are hearing two messages at the same time.

[00:07:24]There are not enough homes, 5 million shortage, there are too many homes, and they're sitting unsold. The truth, these condos will sell at the right price.

[00:07:30]Condo developers made a bad decision to build 450 foot condos props, especially when asking price is too high. Another truth, taxpayers should not be bailing these developers out. We should not be.

[00:07:43]This is not going to bankrupt the country. This is the automakers I don't agree with. They should have let them go belly up too. But there was a lot of jobs on the line with these condos.

[00:07:52]There's no jobs on the line. They've already been built. They're sitting there empty. And let's look at what the prime minister in waiting has to say about this, the leader of the opposition. and he makes some good points. So, listen to what he says.

[00:08:02]>> Where is your bailout? Because Mark Carney's got a seems to have a bailout for anyone who's part of the liberal club of power brokers, corporate insiders, and lobbyists. They all get a bailout. The latest example is the the bailout that Mark Carney announced for developers and banks here in Vancouver.

[00:08:24]Let's just be clear what he's promising.

[00:08:27]He came here and said he was going to transform, 2,200 empty condos into affordable homes using what he called innovative financial tools. What innovative financial tools?

[00:08:50]It sounds like magic. And the enormally the innovative financial tool to turn an overpriced empty condo into an affordable home is for the price to drop until someone can afford to buy or rent it. So why not just let that happen?

[00:09:03]Well, Mr. Carney answered that question.

[00:09:05]He said because the developers do not want to lose money.

[00:09:09]All right. Well, they may they took a risk. They decided they wanted to build those condos at a time that we were in a housing bubble, but now they're selling those houses in those homes at a time when the housing bubble has burst. So, the risk did not pay off and they would lose money. Well, somebody's going to lose money here because if the house the condo goes from expensive to less expensive, who's going to pay the difference? Well, Mark Carney wants you, the taxpayer who's struggling with mortgage payments, grocery bills, and high gas prices to pay those losses instead of the developers who took the risk in the first place. He wants to privatize the profit and socialize the losses. In other words, make you pay the price. This is a transfer of wealth by Mark Carney. It is a transfer of wealth from the have- nots to the have yachts whom Mark Carney wants to bail out.

[00:10:14]>> And there you have it. That is the truth. I sat in a room with some investment bankers and there was a commercial agent there and you know they were brainstorming. This was last year or so. I can't remember exactly when.

[00:10:24]Yeah, it was last winter. And they, you know, they were trying to say, "Well, we got to add more floors. We got to reduce the square footage." And I'm like, "Reduce the square footage? Aren't they already small enough?" And I'm not a commercial guy. And I'm not an investment banker obviously, but it was a very simple solution. But they don't they they can't think this simple like like someone like me would. And I said, "The only way you're going to fix this is with massive losses when everyone lose their shirts. Like that's it. You there's no way out of this. Either the taxpayers or the people are going to have to pay astronomical prices for these condos, for these shoe boxes, or people are going to have to lose a whole lot of money. And the right way is people are going to have to lose a whole lot of money cuz that is free market capitalism. That's what happens. You pump the market, speculation happens, bubble b bursts, everyone lose a bunch of money. A lot of people go bankrupt.

[00:11:14]Developers, banks lose a lot of money, too. And it restarts. When that doesn't happen, things never get fixed. And uh this is what we're dealing with right now. and to solidify our fundamental problems in Canada where we can't sell a bunch of homes or condos, but at the same time, people are lining up because there was like 12 of these homes up near Ottawa for sale and they're camping outside from Tuesday to Saturday for days days like what's that four nights and just to get a home at 7 or 800,000 whatever the price was here. But again, we don't have enough of one product and we have too much of another that people don't want. But this is what happened.

[00:11:54]This is what happens in a bubble.

[00:11:55]Everyone buys a bunch of or builds a bunch of things people don't want and they're not building what the actual homeowners and end users want. And we're in this position right now. But yeah, listen to this. This is insane. This is happening right now. But again, it's not because there's a demand, excessive demand for all housing in the market.

[00:12:11]There's excessive demand for single family homes that families want to live in. And there's not enough of them because the developers and the builders and the government helped them sell out to investments that nobody wants.

[00:12:24]>> For four nights, Amy Sue and her husband have camped outside this Mento sales office in Ottawa, waiting for the release of new homes to purchase.

[00:12:34]>> My husband and I took turns and our in-laws took turns. So, um, yeah, we took turns all being here and sleeping overnight.

[00:12:41]>> The couple have been here since Tuesday.

[00:12:44]It's now Saturday morning.

[00:12:46]>> We waited since Tuesday, pretty much living here. So, we're very, very excited.

[00:12:51]>> The pair are part of a lineup of people waiting for Mento Homes to release 12 new builds for purchase. All qualifying for the HST rebate that allows eligible buyers to not pay HST, saving tens of thousands of dollars.

[00:13:07]>> Extremely tired. My husband and I have been taking three-hour shifts every night. We've been looking for a while and having the 80k incentive of uh saving has definitely pushed us to make that decision and to commit.

[00:13:18]>> The province says homes valued up to $1.5 million would be eligible for a maximum rebate of $130,000.

[00:13:29]It's a big draw for those who camped out here.

[00:13:31]>> For the prices we have right the moment, it's about uh 80 90,000 at least. I was just looking for a bigger house for my family.

[00:13:40]>> Standing here from Tuesday and uh waiting for the new house. Whole family is involved. So, we are coming back and forth.

[00:13:50]>> Mento Homes was not available for comment, but those who work in the real estate industry say it's a telling sign.

[00:13:56]The >> HST rebate, you know, if you're looking at an average home in the $800,000 range, then you're talking about $104,000 HST rebate. So automatically that brings you down below 700,000.

[00:14:07]>> It's definitely noticeable savings, right? Like you have clients that are exploring both uh the resale market and new build. It's it's created a bit of an incentive.

[00:14:15]>> While Sue and her husband were successful and got their home, they won't get to move in until November 2027, but they already know who they will be living near.

[00:14:26]>> It was nice cuz we got to really know our neighbors who we're going to be next to. So it felt like kind of already the start of a community.

[00:14:32]>> All right, this next one. I feel bad picking on these agents, but uh anyway, uh two years of losses were supposedly behind us. The market was supposedly normalized. One now one recession headline comes out and suddenly open houses are ghost towns. Maybe the problem wasn't the headlines. Maybe the buyers were already gone. So yeah, check out what this agent has to say. I don't know where she's from. And I believe this must be recently this video. I could be wrong. I can't see a date on it, but uh he's alluding to the fact that it is. And anyway, uh yeah, check it out. It's kind of quiet just like the market here. She's I don't know if she's talking about her being quiet or the market, but yeah, listen to this.

[00:15:07]>> This is officially the quietest open house I've ever hosted in my entire career. And I believe it is a consequence of the recession announcement.

[00:15:20]Everybody's back in their cocoon.

[00:15:22]>> All right, so that was obviously recent because she talked about the recession announcement in it. But again, I feel bad picking on her, but anyway, don't hate me. It's funny. I think it's funny.

[00:15:31]Own it. Right. Uh, so here was one she posted on May 13th. So, this was after the recession announcement, and this is before this on May 13th. It's hilarious.

[00:15:41]>> I'm getting a little bit tired and concerned with the amount of videos and reals that agents and other real estate um accounts are posting about losses.

[00:15:53]Yes, we had a crazy 2 years during CO and right after CO, but the market is just stabilizing and it's quite normal for markets to go up and down. It was an anomaly and now we are back to normal.

[00:16:07]So, please stop scaring people with uh posting losses. It's just getting annoying at this point.

[00:16:14]>> All right. I don't actually feel that bad after that, but uh yeah, look at that. You got to watch what you say.

[00:16:20]There's no proof. Here's the problem. I don't care what she says, but show me the proof. Show me that it's normalizing. Like, she's saying it, but where's some data? Give me something.

[00:16:28]When you're when you're going to make these claims, you got to back it up with data. And and you got to watch if you cherry pick that data, too, cuz people can call you out. So, you got to make sure it's very pretty solid, concrete stuff you got. Otherwise, you're just talking crap online. And this is what uh unfortunately this girl is doing. And unless she could show me some data, then I'll shut my mouth. This is uh this is a week or so old. This one, Canada leads the G7 countries when it comes to household debt. No matter how many warm and fuzzy speeches Carney delivers, this is the truth. Also second highest in the G20. Elbows up. There you have it.

[00:16:58]Household debt percent of GDP, 101%.

[00:17:01]Wow. And look at United States there is 68 to 69%. So yeah, that's that's big.

[00:17:07]No one's even over 100%. We are up there. Wow. And lastly here we have inflation. So the total CPI. Now they don't really track. Yeah, it's all about the core and the median, the trim right now, but uh CPI is up to 3.2%. Uh Ron, the mortgage guy, says it doesn't matter. The bank account is still going to hold, but uh yeah, it's up. And uh yeah, of course, gas prices, I'm sure, uh did affect that a lot. I didn't really look into it, but I know groceries are up 3.8%. I didn't actually look at housing. Let's check out housing here. See what we can find. All right, here we have it. Shelter here. And what is this for? It is 2026, April, May 2026. The blue one there, 1.7% shelter went up. So, I guess that's not driving it. Transportation and food and um what else here? Recreation, not bad there.

[00:18:00]Health and personal, but it's the transportation way up there. All those gas prices and everything else that you're transporting um that's probably affecting the food, the transportation of the food and everything else uh goes up due to that. So, we need deflation.

[00:18:13]We need disinflation and then deflation.

[00:18:16]Deflation is great for the consumers, bad for the government, bad bad for the tax collectors, bad for the rich, but for the normal working people. You should be praying for deflation. There's going to be job losses regardless. So don't listen to people when they talk about, oh, you're going to lose your job. Maybe I have already heard of people losing their jobs, so that's not going to matter. Uh it's better to lose your job and have cheaper stuff to buy after you lose your job than it is to lose your job and have more inflation.

[00:18:41]So that's my take. Uh, deflation is good. Good for the people. Okay, so that's it for this week. Let me know in the comments as always. What do you think about the government bailouts in Vancouver? Do you think that they're doing the right thing by creating more rental housing, affordable housing, whatever it is, and overpaying for these condos, or do you think it's just a really bad decision and bad for the rest of the consumers, the hardworking Canadian consumers out there? Anyway, let me know and I will see you next week.