Addressing the housing market's problems might be impossible at this point, markets observer says
The Liberals’ latest plan to fix the Canadian housing market’s problems might prove to be a valiant but ultimately futile attempt, according to veteran markets analyst Don Pittis.
Writing for CBC News, Pittis noted that despite the noble intentions, the newly introduced plan should not be expected to serve as the panacea that its proponents are hoping it to be.
“While the new government strategy makes a welcome political gesture toward solving problems created by the high cost of housing, there is evidence that the problem is bigger, more complicated and more intractable than any government can handle, even with this latest decade-long multi-billion-dollar plan,” Pittis wrote.
Read more: Former budget watchdog warns gov’t to be careful in its new housing spending
“The criticisms [of the plan] could be grouped into four general categories. It wasn’t enough. It was too late. It didn’t do the right things. And it didn't help the right people,” Pittis explained. “All those critiques may be fair. But what no one, including the federal government, was going to admit was that solving the housing crisis is simply impossible.”
Also, while some quarters are proposing that the government keep its hands off entirely and let the free market regulate itself, “voters don’t like the idea of some Canadian families living in cardboard boxes and others in mansions. And the government knows it.”
In a bitter irony, a solution will come in the form of a sudden crash that will come about once the property bubble bursts – and by then, “the complaint that federal spending plan is too late will become a virtue.”
At the moment, the best choice that Canadians can go for is a brutal realism that eschews previous generations’ ideas of the perfect home.
“Canada is going through a difficult transition that others have gone through before. There is no longer room for every family to have its suburban picket fence,” Pittis concluded.
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Writing for CBC News, Pittis noted that despite the noble intentions, the newly introduced plan should not be expected to serve as the panacea that its proponents are hoping it to be.
“While the new government strategy makes a welcome political gesture toward solving problems created by the high cost of housing, there is evidence that the problem is bigger, more complicated and more intractable than any government can handle, even with this latest decade-long multi-billion-dollar plan,” Pittis wrote.
Read more: Former budget watchdog warns gov’t to be careful in its new housing spending
“The criticisms [of the plan] could be grouped into four general categories. It wasn’t enough. It was too late. It didn’t do the right things. And it didn't help the right people,” Pittis explained. “All those critiques may be fair. But what no one, including the federal government, was going to admit was that solving the housing crisis is simply impossible.”
Also, while some quarters are proposing that the government keep its hands off entirely and let the free market regulate itself, “voters don’t like the idea of some Canadian families living in cardboard boxes and others in mansions. And the government knows it.”
In a bitter irony, a solution will come in the form of a sudden crash that will come about once the property bubble bursts – and by then, “the complaint that federal spending plan is too late will become a virtue.”
At the moment, the best choice that Canadians can go for is a brutal realism that eschews previous generations’ ideas of the perfect home.
“Canada is going through a difficult transition that others have gone through before. There is no longer room for every family to have its suburban picket fence,” Pittis concluded.
Related stories:
Influx of foreign capital not the root cause of price growth – analyst
Canada might be underestimating tighter mortgage rules
