In response to growing criticism and worry over the housing-crisis in Canada, political representatives have decided to push forth with their plans for new taxes as their solution to help with the problem. One thing that concerns many local residents is the number of vacant houses and other vacant properties around the city, some feel that by imposing the new taxes on these properties that it will prompt those home-owners to either rent or sell their properties and thus help to turn around the problem of houses being too expensive for locals. But others say that taxes aren't a long-term solution to solving the issue of why an increasing number of Canadians cannot afford suitable accommodation for themselves, and if anything they might only make the situation worse.
According to inflation calculations, the same $800,000 item today (which is enough to buy you a decent home in the lower mainland area) would have cost roughly $32,000 back in 1913, and this is because the currency has lost over 95 per cent of its value. Similarly, the Canadian loonie has also lost over 90 per cent of its value and purchasing power too. Not only are low interest rates and foreign investments contributing to the Canadian real estate problem, but one major issue that many Canadians don't even know about is that the value of their currency itself is declining, and it has been degraded by those in positions of power which have approved of seemingly corrupt monetary systems. Of course there are salary discrepancies between now and 1913 and the loss in value doesn't mean that it is now impossible to own a home, but it just means that it will become increasingly harder as the years go by; as the purchasing power continually becomes eroded. Back in 1913 it also wasn't common to spend $30,000 on a home, the average was closer to $4,000 which would be roughly $100,000 now. But it is clear how damaging the central bank policies have been to the value of the currency.
Why will Trudeau, Greg Robertson, and other “representatives” never touch on this important issue? Considering it is one which effects every single Canadian and their direct standard of living. They only seem to want to talk about how they can tax us some more and place further restrictions within the market upon people who are trying to make voluntary and peaceful exchanges.
Perhaps many more individuals and families would find that they are able to buy the things that they need, and that they are more able to afford suitable accommodations for their family, if their currency was worth 95 per cent more in value? Also, by the central banks providing low interest rates they encourage people to get into the housing market who perhaps otherwise might not have because they couldn't afford it without superficially low rates, and that in-turn will drive housing prices up.
If the central bank wasn't meddling within the market, then private lenders themselves would be able to naturally establish what the rate should be. The central banks pretending to know what's best for the central economy hasn't proved to be working thus far, considering that a growing number of citizens are finding it harder to get by and maintain their standard of living and the currency has been almost fully eroded.
The Canadian real estate market has been in a bubble for a couple of decades now, according to some investment and financial experts, and it's just a matter of time they say before the bubble pops. In the meantime, political figures are scrambling and trying to offer the public solutions to ease their worries about not being able to afford a home. Thus far, the only “solution” they've conjured is potential further restrictions on foreign buyers and new taxes for vacant homes. The B.C. Government just this week announced that it will permit Vancouver to impose the new taxes on empty homes and there are also calls for the state to implement a “flip tax” on homes that are purchased by non-residents.
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