In a science fiction tale by the late Iain Banks, the only way a huge computer can make a truly accurate predictive model is to create a near-perfect simulation, including recreating the realistic lives of all the people involved.
Governments don't have the computer power to do that with the Canadian property market. That's a good thing. They avoid the dilemma faced by the science fiction computers over whether to kill off all those virtual people in the simulation.
Royal LePage says the surge in Richmond Hill was the largest in the country
"I've not seen anything that high before, ever," said Dianne Usher, senior vice-president at Johnston and Daniel, a division of Royal LePage.
The point is that, currently, even our most exacting models are ham-handed at predicting how sweeping changes in policy will affect the real world. No one knows for sure how the property market will react to government meddling, but here are just a few of the many ways things could go wrong.
The current round of tools to cool the Ontario market is only the latest in a cumulative series of changes by federal and provincial governments. Like shifts in interest rates, alterations in rules can take a long time to work their way into the market — especially a market as disparate as housing. There is some danger that as foreign buyers, first-time buyers, owners of vacant homes and domestic speculators find themselves nudged out, the housing market will cascade into a tailspin, revealing what so many critics have predicted: that the real estate market is a dangerous bubble in need of a serious correction of between 30 and 50 percent.
Continue to read on.CBC News