If one of the largest drivers of inflation is housing, why does the government not balance this act with 0% loans to developers/the construction industry? Drive the supply while slowing demand.
Their whole gamble is building big construction projects sold to investors looking to diversify their portfolio by grounding some of their holdings as physical real estate. As a held asset, these investors want their assets to grow in value, or at the very least, remain stable.
If interest rates rise, the sky rocketing prices of real estate slows. This negatively affects the investors asset ratings and their ability to continue to loan against those assets to do even more with their money/assets.
This vested interest is a shared agreement between big investors, large builders, and their subsidiaries. Actually building houses that are affordable to real people has absolutely nothing to do with their game plan.
They just need to relax zoning, and also open more areas to constructions. (i.e. make a suburbs, that will over time be subdivided into an Urban area.)
One to three years of construction can easily be eclipsed by the unnecessary, onerous, and very lengthy "planning" processes imposed by government, especially if tribunals, appeals, and other bureaucratic overhead is imposed on a project.
But if the government itself wants to tax or borrow in order to subsidize loans for housing, that's something they can do. But not the central bank.
* that and ouright corruption.
CMHC does exactly this if you are willing to build affordable housing. The issue is that construction costs have also gone nuts throughout COVID and a lot of development business plans have been destroyed at these new construction prices.
Way too many ft2, too many valleys in the roofs, too many yards.
We solve the housing crisis with high density, modest housing, not the absurd mcmansions everyone keeps demanding.
No. The needs of society as a whole outweigh the wants of a few excessively privileged persons.
Also, if we don't do as you want and instead build high density only and start demolishing the sprawling suburbs then we can have forests a 5 minute walk from everyone... Parks everywhere, nature thriving, while we have to only travel 4 blocks to do everything we need to in life because the density means that Walmart and everything else can and will be in close proximity to Everyone all without the need for a personal vehicle.
See, your demand has serious knock on effects you either didn't consider or view as irrelevant against your personal privileges....
"May you live in the world as you would have it, so long as you live as the least advantaged."
To me it's a blessing. To the majority it's a curse. In both cases it's a manifestation of our underlying natures and preferences.
What is it to you?
I'm not playing your game.
It's right there in thier description, they aren't providing a good value for the dollar and letting that happen at the expense of any housing for magnitudes more people is a clearly untenable policy.
Maybe it would help if these loans would help to get new developers and builders into the game. But if those need to hire the same builders, it's questionable whether there is more build capacity in the end.
This statement is absurd. By your logic they could charge $20,000/sf but aren’t because of… restraint? No, turns out there are market forces in real estate just like every industry and the more profit there is, the more competitors turn out to play, driving the profit down to a market level.
Specifically, mortgage interest is the largest driver of inflation, accounting for 30% of the growth in CPI as of the May figures.
> why does the government not balance this act
Probably the same reason they pushed the inflation problem off on to the BoC back in the 90s. They don't want to deal with it.