Ponzi schemes built on debt-financing always eventually collapse on themselves, regardless of what governments want. But, for the record, here’s a recently stated variant of a common RE bull position. – vreaa.
“It is amusing to watch the bears raise the same old arguments for 6 plus years, pointing out that the inevitable crash is just around the corner. Whether it was zero down/40 year mortgages, slashed interest rates, home reno credits or property tax deferral programs, both the federal and provincial government have demonstrated an ability to implement policies and measure designed to keep the housing market hot. The introduction of each new policy and program has caught the bears by surprise, and each time bears repeat the refrain that the government has used up all its ammunition. But who is to say the government doesn’t have any more “ammunition” left to prevent a collapse of the market? Everyone thought the minor 2008 correction was the beginning of the end, and they were sorely wrong. Bears failed to predict that rock bottom interest rates would be introduced, and that people would run out and buy despite it being “counter intuitive” amidst a recession. And while prices have edged beyond their previous high, bears are secretly (many openly) upset by the current state of affairs. The current state of the market goes contrary to their own personal wishes, “logic” and perception of “economic fundamentals.” Bears love to say that the government is idiotic because they failed to learn from the collapse of other “bubbles” around them. But maybe, just maybe, they have watched and learned and know how to keep things moving nicely all the while preparing for a soft landing or minor deflation. After all, maybe there are a few bright public servants who have paid attention to the global real estate condition. Bears fail to realize that their vested interest in a crash in prices is in stark contrast to the 70% of the population that “counts” from a political perspective. The government will do whatever it can to prevent any US style meltdown. And while a fast correction is in the interest of bears, I am afraid to say that we are looking at 5-10 years of minor price decreases at best, as the government will intervene every step of the way to protect prices. And how many here actually want to continue to rent for 5-10 years while prices slowly deflate? Everyone here wants to buy at the “bottom,” and few if any will buy after only a 10-20% reduction because you will still “lose” that hard earning savings you socked away (difference between rent and home ownership) as prices continue their downward spiral (according to your own theories) Bears pretty much have to keep waiting for many many years in order to have their theories validated. Whether you want to admit it or not, many bears here have put their lives on hold waiting for a crash (despite all the glib comments about 1000 bucks per month in the bank, eating out and traveling more than indebted homeowners). With a culture that constantly socializes you to own, only a fraction of you are self confident enough to be truly happy renting. The vast majority of the posters here cling to the notion that they are rational investors, pretending to be happy renters, all the while hungering for a collapse in the market and loathing homeowners. And while you might be the rational investors, at the end of the day, you are a tiny minority with values that run contrary to the current values of the vast majority – instant gratification, short-term thinking, greed, entitlement, and abdication of personal responsibility (after all the government will bail them out if things go sideways). Unfortunately, or fortunately depending on which side of the market you are on, many bears will be renting for many many years, clinging to the notion that they are “right” and pretending to be happy despite knowing deep down inside that they were/are wrong.”