Lets see what the benefits are:
1) Hundreds of thousands of low-skilled employment in the construction industry and thousands of skilled jobs too (electrician, plumber etc)
2) Lots of transactions generating tax revenue, and commissions which keep another big swath of folks working and paying (hopefully) some taxes.
3) The 70% of people who own FEEL richer. they spend more, buy that BMW they always wanted, renovate which employs another chunk of people.
4) Money pours into the country to buy into our RE bank from all over the world.
There would seem to be no downside. No wonder Governments love to stimulate housing. Even the Conservatives who closed the Wheat Marketing Board against the Farmers' wishes because it was not 'free-market enough' turned to the enabler of speculation, CMHC, to boost housing and get them re-elected.
Of course we bears know the down-sides all too well.
An economy overly dependant on one sector, which when it stumbles will bring many things down with it. Firstly how will the hundreds of thousands of hammer-ready workers transition to anything else? There will have to be a constant stream of 'road to nowhere' projects to keep them employed.
What will replace it?
Should we not be looking at retraining this army of low-skilled workers now and diversifying our economy away from just banging together two-by-fours and putting up some tarp paper??
Real Estate Agents could transition to other sales jobs.
Then there is the effect on young couples who have to enter this frenzied markets, burdened by debt and fear and uncertaintity. Even is China where the frenzy of speculation has reached fever pitch and which is being exported to our shores, the fate of those just entering the property market is precarious.
Once again the prudent are being penalized and will be penalized even further when the bust happens and we will all be asked to help out the speculators and the innocent young couple. Interest rates will remain low forever, the CMHC will affect the Canadian government's fiscal rating (the IMF has said as much) and we will enter a post RE-party with a hang-over that will damage our society.
The worse thing is that it could have all been prevented.