So the 2015 has ended. The end come with bitter taste of fallen CAD, higher food cost, T2 gender-perfect mob attacking TFSA, tighter mortgage rules, eroded manufacturing business, and Toronto Stock Exchange hovering just above basement. Although the bitterness of the year-end was sugar-coated with low gas prices, it left me with mental hangover. Housing bubble and consumer debt grown to the epic dimensions and multiple attempts to slow it down were futile like lecturing first year Freedom Arts student about taxes. Higher down payment rule is attached only to $500K+ houses, tighter lending requirements were overrun by brokers, iProduct addicts still believe prices can only go up, 7-year-long car loans infested dealership ads, and average Canuck has less than five grand in savings.
Rates have already started to go up in the US and like bad pop music it can not be prevented from spilling across the border. Cheap money will end soon in land of maple, and house-rich cash-poor crowd will discover (again) its inability to learn from own mistakes. When bubble gets busted and house becomes liability rather than “investment” everyone will ask “how did that happen?”.
Kijiji is full of ads with lease take overs posted by desperados who discovered after 6 months thy can not afford anymore the four-digit monthly payments for the shiny BMW. What could possibly prevent from posting similar adds about houses? Are posts such as “$2000/month mortgage take-over” unthinkable or is it just a matter of time when they show up? How about having Facebook pages ornamented with ads about mortgage takeover right next to “Magic Diet” and “$50 Rolex”?
I supposed to write about cars, but I got distracted….a little bit….