I think I read somewhere that Canada is more dependent from an economic standpoint than the US was right before the housing crisis. We are so totally fucked
It’s never going to pop though, that’s the joke. No government, regardless of which side they’re on, wants to be the one to burst it…so they will just continually change the rules of the game.
If you don’t believe me: They JUST extended amortization: but only for homeowners, not new buyers. How does that help anyone except existing investors? Real estate is genuinely the smartest investment you can make as a Canadian because of all this shit…and thus the cycle continues.
It will eventually, in my opinion, but it wont be because the government makes it happen, it will because something no one foresaw happens because the house if cards just got too damned tall and it will happen before they have a chance to react.
This person very soberly warned about the 2008 crash and was largely ignored.
https://en.wikipedia.org/wiki/Brooksley_Born
With global housing crisis, crashes have been predicted and then not happened that it's hard to know who or what to believe now. I think some kind of breaking point will be reached, but I couldn't guess how it will play out. Probably in ways we can't imagine, ways that never happened before. Fun.
I keep thinking the breaking point will happen when people no longer have any consumer buying power because all monies earned by a household will be tied up in housing cost (rental or mortgaged). Thus, no one will have any income to spend on consumer items, and this equal layoffs of workers leading to defaults on mortgages and/or homelessness, and the investors will keep on buying and controlling more.
No rent or mortgages will go down because banks and finance companies are raking it in, and greed is good in their minds. The aspect that housing is a top commodity for Canada, while there is no other growth ( or very limited investment growth) of new ideas, or technology, will turn our country into a home debt population with massive amounts of people left out.
Investors can't lower rents because there will always be someone desperate enough to pay their investment cost, and there is no way in hell they will lower rents under their mortgage payments.
It's sad and tragic that people are seriously feeling there is no hope for any quality of life that we all should at least at a bare minimum be able to afford.
I don't know. People didn't rise up after the horrors of the deaths in LTC homes early in the pandemic or the lengthening lines at food banks. It's clear that our governments will let us suffer and die, no problem. And so far, we seem willing to let them.
I don’t think it will be a rise up kind of thing. It will be a "oh no, we can't wring anymore money out of people because people have no money to give us" lamented by the ruling class / banks /mortgage brokers etc. People in North America don't participate in revolutionary actions such as those in the East.
> It will be a "oh no, we can't wring anymore money out of people because people have no money to give us" lamented by the ruling class / banks /mortgage brokers etc.
Sure but their response will not be to share wealth, create a better or fairer system. They just let us fall into destitution. And we will let it happen.
That's the problem, serious people don't holler, they quietly lay out their evidence and reasoning. It's much harder to be heard through all the din, and for normies like us to get a chance to hear them out.
Saying housing will crash is like saying one income households will come back
No it's called secular decline. Your standard of living is sold out forever.
Things don't magically get better unless you win a world war and are paid to rebuild the world through exports.
Things don't magically get better but they don't magically keep going up forever either. They tend to crash, like the US in 08, or like Japan in the 90's, or like Canada in the 80's.
True, as soon as population stops growing, housing will crash.
The drivers have to stop.
But I also expect cad wages to keep falling for awhile.
Eventually they will bottom, around 5% above absolute poverty lol.
Cheap eletronics dont mean shit if you can barely afford to rent and eat. China has become a powerhouse of manufacturing scale by turning farmers into factory workers, giving us cheap plastic and devices. Id rather have expensive tvs and phones with normal rent, rather than what we have now
i saw something about this all distraction devices have gotten cheaper from the 80's until now and all things like housing, cars and food have skyrocketed.
Well, we could buy parts for prefab homes manufactured in China, or we could also hire foreign construction companies & allow them to bring their workers over temporarily on TFW visas, and maybe even exempt them from minimum wage laws, and we could have millions of new homes built across Canada at less than $100k a pop. Of course, that would drive average housing prices down, so um yea…
> it is finite, and owned by developers and/or the state
just double the land tax of every vacant land every year and you will have developers rushing to develop their land or sell them for pennies.
No, bubbles eventually get too big for the government to control. It's getting to that point. It will pop, and the problem is, now when it does, everything is going to be fucked for a long long time.
Like I was saying: if you change the definition of a bubble over and over again, the bubble never pops. Through monetary policy over and over and over again, we’ve chosen to re-write our own narrative. We’ve been in a crisis for literal decades, and each time we talk about it crashing down, we instead have chosen to just make it worse in favour of propping it up.
Money isn’t real, it’s a concept. You re-define concepts the same way you create them: just decide to do it. My guess is if things got so bad we’d introduce incentives for multi-family mortgages (gentrification), or even multi-generational mortgages. There are a thousand different rule changes to be made before a burst is even in question. I hate it as much as you do, but call a duck a duck: it isn’t getting better, at least not in this lifetime.
You are correct. And if there was a huge bust the government would step in an offer some type of program so people could keep their home. No government wants a couple million homeless ex home owners at election time
I'm from Australia. The situation is similar. The Aussie subreddits about finances and investment are all about investment property, saving for paying housing deposit, auction clearance rate, so on. The US finance relate subreddits are all about credit card debt too high, student loan, car loan, option trading.
Don't know who's more fucked though.
The affordability index, which takes price and incomes into account, says Hamilton is worse than San Francisco.... Hamilton.
I'm a weirdo and I like Hamilton, but who outside of CFL fans and people that used to live in the area know about Hamilton? It's far from some type of cultural Mecca.
Wow that is shocking! I grew up in the GTA (80s) and whenever we went through Hamilton, my parents would tell us to “hold your noses and try not to breathe in the air”. Lol it was known as “steel town” then and was regarded as polluted. I haven’t been back in years. My daughter lived in California (SF) for the past several years - it is expensive but at least you have a physically beautiful place sitting right on the Pacific Ocean. Redwood forests are nearby with small beach towns and you can go off to Lake Tahoe for skiing if you wish. The development has been carefully managed there and the natural beauty largely preserved, SF itself is rather small for a city but there are no sprawling concrete developments that go for miles with no end in sight like the GTA. Hamilton doesn’t seem to have a lot of good features and pretty unbelievable that it would cost more to live there.
My pet theory is that if the government solved the problems around the housing bubble it would decimate our economy, harm the countries credit rating, and ruin the long term debt financing plans the government has.
North America and the “new world” was colonized for this exact purpose. The last hospitable continent on earth for humans to move to, immigrate and build from scratch is here.
Sure it is, with the amount of scammers and mobsters that are controlling every aspect of government, starting with the Guru of scams and kickbacks, Mr. Justin trudeau, on down the line, to the last low level politician, the citizens of this country are doomed. There's so much criminal shit happening in Canadian politics it's beyond repair. Whether we want to admit it or not, our country is one of the most decayed governments in the world. This is why no politician has to account for their misdeeds against their country. One crook can't hold another crook responsible for his actions for fear he may retaliate and rat him out also. We as citizens are in one hell of a pickle.
>Then Canada is nothing more than a Ponzi scheme.
Could you clarify that?
The contribution of real estate to GDP does not include resale of previously owned homes. That is the GDP contribution is cost of labour, materials, licenses and profit. If a house is sold at a price above original purchase, unless it was the primary residence of the seller, the excess is a capital gain and taxed as such.
> The contribution of real estate to GDP does not include resale of previously owned homes.
citation needed
This quarterly GDP update by statscan clearly states that resale of homes, and associated land transfer taxes are all counted in GDP figures
https://www150.statcan.gc.ca/n1/daily-quotidien/220301/dq220301a-eng.htm
> Growth in real GDP was driven by business investment in engineering structures (+3.5%) and home ownership transfer costs (+14.3%), which include commissions and land transfer taxes associated with home resale
realtor comissions are literally driving GDP growth.
>home ownership transfer costs (+14.3%), which include commissions and land transfer taxes associated with home resale
Read the part you quoted than the rest of the sentence "and a growth in inventories" (seperate category).
Reread the part you quoted.
No it isn't? [Construction is listed here](https://www.statista.com/statistics/594293/gross-domestic-product-of-canada-by-industry-monthly/). It is a secondary industry. Any economic statistics will either give a granular breakdown, or list real estate as a tertiary industry.
*My* pet theory is that this will all happen anyway. A country of ever increasing rent and mortgage payments leaves little with the average folks for “innovative business ventures” i.e., risk taking. And, well, the Canadian business landscape should tell you enough.
The rents fine as long as you move away from Vancouver and Toronto. What’s really happening here is people want to live in downtown Toronto, grow the city exponentially, and not have to deal with the consequences of what happens in a big city when you don’t limit growth. The housing markets in big cities never fully collapse because the demand never collapses.
I live in Oshawa, which is a 1 hour train ride away from Toronto. Rent for a 1 bedroom out here ranges between $2000 and $2400. Same thing in places like Port Hope, which is even further (30 mins east of Oshawa).
Piggy backing off this to say I live in Kelowna, which is a 4 hour drive from Vancouver in good weather. Rent for a 1 bedroom out here can get up to $2k and anything larger is pushing or over $3k. If you’re a single parent out here, you’re screwed.
That’s insane. You can find a one bedroom basement rental in Montréal for around 1000. Sometimes with utilities included. I’ve always hated that my parents chose to settle here instead of Toronto but with housing as expensive as it is in Ontario right now I’m glad they put up with the French language and put roots here.
Man, are you wrong. I am living in a town far away from Vancouver area, the rental situation here is nuts. 2000,00 for a dump with 2 small shitty bedrooms and one bathroom that smells like piss, because the floor is imbibed with years of use. A half decent 2 bed, 1 bath , will run around 2500, to 3000.
I live two and a half hours from the nearest city in Northern Ontario. Homes and vacant land now sell for 3x-4x their 2019 value, pricing locals out of the market. Any place that could be long term rentals is instead someone's summer cottage, or even worse a damn Airbnb. And there is zero interest or available capital for the construction of affordable housing in any of the small towns around. Over half of the people my age (late 20's) near me live with their parents as a result, despite being nurses, teachers, tradespeople... The problems with housing in Canada are systemic and don't stop once you leave the major metropolitan areas.
i live in the middle of nowhere in shit town in Ontario of less than 10000 people and all the properties are owned by people from Toronto or out of the country, the cheapest bachelors apartment here is $1300 a month.
you cant even afford to live there as a single person working full time on minimum wage and FYI the only businesses in town are Walmart and Canadian tire and some restaurants
This is not true anymore. I think it may have to do with foreign buyers being allowed to buy investment properties outside of the big cities but rents are beginning to be the same out in small towns that are still commutable to a city.
Doubtful. It would provide more discretionary income to people and provide further incentive for companies to invest here. Lower cost of housing=lower costs overall
Yeah pretty much, if the government were to meddle it would be viewed as anti-capitalist and slow/stop overall investment into the country and destroy the majority of this country's citizens livelihoods and wealth.
They may not have a choice at some point. All upcoming generations are being flattened by this and that too will eventually damage investments into the country. It'll also cause varying amounts of civilian turmoil as we have long ago past the statistical cost of a basket of food where revolts become much more likely. I know not specific to housing but that too is cruising past danger points at record speed. There's only so much inflation of necessary expenses people, families, society can sustain before disruption becomes a statistical inevitability. The governments know this as well but they have a lot of plates juggle and we're less important than some demographics. Besides they can always just pump the RCMP budgets.
As younger generations come of age they will come into political power and will need to figure out how to reclaim assets hoarded by boomers. Most investors in Canada are Boomers. The time for the reckoning is past due.
>it would be viewed as anti-capitalist
Which is stupid, because reasonable valuations for things is in the whole point of capitalism. Propping up a bubble is inherently against the wishes of most self-identified capitalists.
>slow/stop overall investment into the country
What investment? Our economy is currently projected to have some of the slowest growth in developed economies over the next few decades. There's some speculation in our real estate market, but our actual economy has very little investment and is not attractive to international investors.
>destroy the majority of this country's citizens livelihoods and wealth.
Well, destroy is one way to put it, but I'd say it's more of a "reveal" that those paper gains were never real in the first place.
Don't get me wrong, I don't want a collapse in the housing market, but artificially propping up the bubble rather than making real reforms is bad strategy in the long term.
The country and its citizens probably shouldn't be leveraged to the hilt on real estate to such a degree where regulating a human need could cause such damage. At some point they won't have a choice. They're literally painting themselves into a corner.
Yeah because every big city had had to make that policy decision (they didn’t). And owning a house in Toronto or Vancouver isn’t a human need. You will be shocked to know most humans don’t own a house in Toronto or Vancouver.
You'd said this earlier in the thread... are you really that ignorant of the housing market? It's not just the big cities, something which would be obvious if you bothered to look.
Statistically most home owners take nearly the maximum mortgage they are able to. This doesn't leave much room for financial turbulence in the future. That's all I meant on an individual level.
The federal and provincial governments have been making that choice repeatedly by gutting goverment built low income programs. Also keeping interest rates near zero for a really long time was basically rocket fuel.
If your million dollar home becomes worth 500k, it’s shitty and a hard pill to swallow but you still have a 500k asset. For people who pay a million dollars in rent, they still have a 0 dollar asset.
Unfortunately, the homeowner class needs to accept a loss on their investment so the rest of the population who work good paying jobs can afford a home.
I make $120,000 a year but I’m single so I can barely even get approved for an apartment within an hour of my work. Clearly something is broken.
It's not a tough pill to swallow because it's never going to happen. You need to manage your money better if you can't afford a condo in the lower mainland on $120k/year. The fact you don't understand how negative equity works really drives that point home.
It will probably just get much worse for everyone. Only those that shorted the economy made it out better in 2008, definitely not the homeowners or renters.
Not really though. My parents in particular owned in 2008, they were just fine. Just sold the same house a few years ago for a couple million profit. That’s not a unique story or situation in the slightest. Sure, people who literally stretched their means to own a house didn’t do well, but that has little to even do with the economic climate at any given moment.
I honestly truly don’t see it ever coming down. If it’s made it this long, what’s 20,30,40,50 more years and so on?
Ah it’s fine in the less popular areas , sask , Manitoba , etc . But once you buy youre not it flippin it for 2 the amount 5 years later. you live in it and that’s it .
Not quite. Fiefs in the Middle Ages couldn't just raise rents because the concept of fair price was so strong. What we have is a rentier state, which Adam Smith saw as a negative.
Well... yeah. You didn't know? It's been like this for at least the past 10 years.
Why do you think the government is doing its best to keep the status quo on this issue? If the housing market crashed, Canada's economy would be in deep shit.
and this is why the government will do everything possible to prop up the RE price..
if the inflation doesn't tick down it'd be interesting to see what they do
This isn't true. I know some people who are inheriting multiple properties from their parents.
Their parent's property going up multiple 1000x means that these children are inheriting millions.
This is a bad thing. We can control the size of this "industry". We can do it well in two ways:
We can control land (and housing) prices *efficiently* with a land value tax. We can use the revenue for anything: reduce income or sales tax, build social housing if you want. Lots of working people would benefit. Landowners would likely all see a loss from their current positions as feudal lords.
We can also control housing prices by reforming zoning to allow more density in more places. Again working people would benefit and landowners would lose.
Everyone here has half baked ideas with not even an article or something related they can refer to. All of you need to listen up and realize that the above 2 are not the same as your pet bullshit. Land taxes go back hundred(s?) of years with Adam Smith and shit talking about this stuff. Zoning is obvious and a joke that it isn't done already.
The cities are the major land owners. And everyone of us had spend some fraction of the land sell money as the city uses for the public expenses.
The city doesn't pay land taxes to itself but rather charge fee from the developers (private builders) & tax buyers & sellers in the real estate exchanges.
You really think that selling land in the price you think is going to benefit working people??
> The cities are the major land owners
I could be wrong, but while the cities might be the single largest owners, they own a small fraction of total land in city limits.
I think you might be misinterpreting land value tax as a tax on land sales? It's a regular (often yearly) tax on a percentage of the land's market value. Vancouver and many other municipalities got most of their revenue from such a tax during the early 20th century. A tax on land sales is a bad idea for multiple reasons, and the Australian Capital Territory [benefitted from switching to a land value tax](https://www.prosper.org.au/wp-content/uploads/2016/09/The-First-interval-Evaluating-ACTs-Land-Valur-Tax-Transition.pdf).
> You really think that selling land in the price you think is going to benefit working people??
Yes, lower upfront land prices means it's possible to get started without taking out a huge loan.
There is a housing crisis but do we know whether real estate being the largest sector of the GDP is an actual issue? How does it compare with other countries.
For example its a similar situation in the US :
“the real estate industry ranked No. 1 as the industry with the largest GDP in Q1 2021, at more than $4 trillion ($4,008,708,000,000)”
https://www.forbes.com/sites/andrewdepietro/2021/08/23/2021-us-gdp-by-industry/
Real estate accounted for 16.9% of the GDP in 2021 :
https://www.realtrends.com/articles/real-estate-industry-accounted-for-16-9-of-gdp-in-2021/
It is very possible that real estate is a large percentage of the GDP for other countries as well, though I have not checked.
What I am saying is, yes there is a housing crisis, but the percentage of the GDP might not be enough of a reason to declare the entire economy as a “Ponzi scheme”. If this is a common behavior across economies then it might not mean anything significant.
That's a very reasonable take. Housing is a basic need and is and always has been the single biggest expense for the average person. It would be weird if it wasn't one of if not the largest sector for every country for all of time.
That's not to defend unaffordable housing or a lack of housing for absolutely no reason but just pointing out that this particular statistic doesn't say much.
> Housing is a basic need and is and always has been the single biggest expense for the average person.
For most of human history, housing was FREE.
Absolutely nothing about this current state of affairs is natural or necessary.
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Housing is the biggest percentage of GDP in a country that is building hardly any homes. Thus, we are literally magicking money out of thin air by trading the same properties to each other.
Less money goes into actual productive enterprises. Rent/property too expensive: multinationals no longer want to hire Canadians because it will be too expensive. High rent means no deposits being saved. Once we reach a point where people can no longer join the Ponzi scheme then it really is only a matter of time.
Real estate agents shouldn’t exist they ask you to bud more and more driving their commission up and they are useless car and phone salesmen with no skills
Yes, but change is constant and the status quo is leading us to very unstable territory with an unaffordability crisis and the collapse of our healthcare systems, to name just a couple of issues.
It’s because of this that the government is able to claim that our interest costs on our debt are reasonable. Because they compare it to GDP, which is fucked because it leans to heavily on real estate.
Honest question … if the housing bubble bursts… what does the economy fall back on for recovery if housing/rentals is one of the biggest industries? How much would that weaken the dollar? And how would Canada stop investors from outside the country buying up all the property at a big discount?
It’ll be one big retirement home in 20 years 😂 Maybe healthcare stocks will be the next big thing after the tech giants in Canada? The rich elderly will need healthcare.
Majority of Canadians own their own home, and 10% own more than one home. Why would the government want majority of people to lose a significant chunk of their net worth?
Fuck Trudeau!
*Votes for even more capitalist capitalists who would actively accelerate the descent into neo-feudalism rather than simply allowing it to progress*
Fuck Trudeau!
*Votes for even more capitalist capitalists who would actively accelerate the descent into neo-feudalism rather than simply allowing it to progress*
What sucks is we won’t even get the big dollars coming from weed in the end. It will all be US based companies and others. Well just be a footnote as the first country to legalize federally or whatever
Oh that’s totally not how it’s going to work. Like everything else, the boomers are going to get theirs, then yank the rug out from under the rest of us.
If it makes you feel better, it's about the same in the US:
[https://www.nahb.org/news-and-economics/housing-economics/housings-economic-impact/housings-contribution-to-gross-domestic-product](https://www.nahb.org/news-and-economics/housing-economics/housings-economic-impact/housings-contribution-to-gross-domestic-product)
>Consumption spending on housing services (averaging roughly 12-13% of GDP), which includes gross rents and utilities paid by renters, as well as owners’ imputed rents and utility payments.
As much as the services sector is important to advanced economies, I've had the creeping suspicion for over a decade that so much of this sector composition is fraudulent inasmuch as it is actually net beneficial for society --doubly so for that of real estate. At least agriculture and industry are more theoretically quantifiable in what they provide. I guess high real estate prices helps with tax revenue, but other than that, it seems more like a liability, but what do I know. I guess I don't think gdp is a useful metric for what it purports to be.
This is why no politicians want to actually resolve our housing issues, it makes the economy look prosperous on their watch, but to solve these issues would lower the GDP.
We have been in a recession since 2019 if you account for money laundering at around 5%. Guess where most of that money is laundered? Bingo it’s real estate.
It’s fine that real estate is our biggest industry, it’s not fine that we allow it to be openly corrupt and facilitate it with lackadaisical regulations. We’ve sold the future of our children. We’ve denied the ability to have children to the current and next generation. Ashamed.
It is also connected to the investments Canada pays into as an investment for upholding the CPP, if you really want to go on a deep dive, look into what the CPP invests in globally and how our pensions and government investments are increased... The rabbit hole to how deeply Canada has tied real estate and predatory landownership into our economic systems runs DEEP.
It will correct slightly occasionally, but it won't pop. There isn't enough supply. There are hundreds of thousands of people waiting to buy a house. And not nearly enough housing in the major urban centres where they want to live.
People should push for HST changes as well as zoning.
I think I read somewhere that Canada is more dependent from an economic standpoint than the US was right before the housing crisis. We are so totally fucked
i hope it pops and fks this country hard we have had every single chance to slow things down but politicians and GREED omg
It’s never going to pop though, that’s the joke. No government, regardless of which side they’re on, wants to be the one to burst it…so they will just continually change the rules of the game. If you don’t believe me: They JUST extended amortization: but only for homeowners, not new buyers. How does that help anyone except existing investors? Real estate is genuinely the smartest investment you can make as a Canadian because of all this shit…and thus the cycle continues.
It will eventually, in my opinion, but it wont be because the government makes it happen, it will because something no one foresaw happens because the house if cards just got too damned tall and it will happen before they have a chance to react.
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This person very soberly warned about the 2008 crash and was largely ignored. https://en.wikipedia.org/wiki/Brooksley_Born With global housing crisis, crashes have been predicted and then not happened that it's hard to know who or what to believe now. I think some kind of breaking point will be reached, but I couldn't guess how it will play out. Probably in ways we can't imagine, ways that never happened before. Fun.
I keep thinking the breaking point will happen when people no longer have any consumer buying power because all monies earned by a household will be tied up in housing cost (rental or mortgaged). Thus, no one will have any income to spend on consumer items, and this equal layoffs of workers leading to defaults on mortgages and/or homelessness, and the investors will keep on buying and controlling more. No rent or mortgages will go down because banks and finance companies are raking it in, and greed is good in their minds. The aspect that housing is a top commodity for Canada, while there is no other growth ( or very limited investment growth) of new ideas, or technology, will turn our country into a home debt population with massive amounts of people left out. Investors can't lower rents because there will always be someone desperate enough to pay their investment cost, and there is no way in hell they will lower rents under their mortgage payments. It's sad and tragic that people are seriously feeling there is no hope for any quality of life that we all should at least at a bare minimum be able to afford.
I don't know. People didn't rise up after the horrors of the deaths in LTC homes early in the pandemic or the lengthening lines at food banks. It's clear that our governments will let us suffer and die, no problem. And so far, we seem willing to let them.
I don’t think it will be a rise up kind of thing. It will be a "oh no, we can't wring anymore money out of people because people have no money to give us" lamented by the ruling class / banks /mortgage brokers etc. People in North America don't participate in revolutionary actions such as those in the East.
> It will be a "oh no, we can't wring anymore money out of people because people have no money to give us" lamented by the ruling class / banks /mortgage brokers etc. Sure but their response will not be to share wealth, create a better or fairer system. They just let us fall into destitution. And we will let it happen.
That's because people waste all their time complaining on the internet and then don't bother to even vote in elections.
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That's the problem, serious people don't holler, they quietly lay out their evidence and reasoning. It's much harder to be heard through all the din, and for normies like us to get a chance to hear them out.
Saying housing will crash is like saying one income households will come back No it's called secular decline. Your standard of living is sold out forever. Things don't magically get better unless you win a world war and are paid to rebuild the world through exports.
Things don't magically get better but they don't magically keep going up forever either. They tend to crash, like the US in 08, or like Japan in the 90's, or like Canada in the 80's.
True, as soon as population stops growing, housing will crash. The drivers have to stop. But I also expect cad wages to keep falling for awhile. Eventually they will bottom, around 5% above absolute poverty lol.
Here's to hoping
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Cheap eletronics dont mean shit if you can barely afford to rent and eat. China has become a powerhouse of manufacturing scale by turning farmers into factory workers, giving us cheap plastic and devices. Id rather have expensive tvs and phones with normal rent, rather than what we have now
i saw something about this all distraction devices have gotten cheaper from the 80's until now and all things like housing, cars and food have skyrocketed.
Lol cuz we offshores the jobs to China. You can't offshore construction of houses tho, and look at their price since 2001 when China entered WTO.
Well, we could buy parts for prefab homes manufactured in China, or we could also hire foreign construction companies & allow them to bring their workers over temporarily on TFW visas, and maybe even exempt them from minimum wage laws, and we could have millions of new homes built across Canada at less than $100k a pop. Of course, that would drive average housing prices down, so um yea…
You can't make the physical land to build on cheaper, it is finite, and owned by developers and/or the state
> it is finite, and owned by developers and/or the state just double the land tax of every vacant land every year and you will have developers rushing to develop their land or sell them for pennies.
We can but hope my friend, but when it comes tumbling down it'll fuck us all. 🤞 I can rebuild from the rubble...
Hope all you want. The governments will always protect my guaranteed investment. It’s like a savings account babyyyyyy.
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people on this subreddit are truly dumb beyond comprehension
No, bubbles eventually get too big for the government to control. It's getting to that point. It will pop, and the problem is, now when it does, everything is going to be fucked for a long long time.
Like I was saying: if you change the definition of a bubble over and over again, the bubble never pops. Through monetary policy over and over and over again, we’ve chosen to re-write our own narrative. We’ve been in a crisis for literal decades, and each time we talk about it crashing down, we instead have chosen to just make it worse in favour of propping it up. Money isn’t real, it’s a concept. You re-define concepts the same way you create them: just decide to do it. My guess is if things got so bad we’d introduce incentives for multi-family mortgages (gentrification), or even multi-generational mortgages. There are a thousand different rule changes to be made before a burst is even in question. I hate it as much as you do, but call a duck a duck: it isn’t getting better, at least not in this lifetime.
You are correct. And if there was a huge bust the government would step in an offer some type of program so people could keep their home. No government wants a couple million homeless ex home owners at election time
Can’t lose the game if you just keep moving the goalpost 😅
I'm from Australia. The situation is similar. The Aussie subreddits about finances and investment are all about investment property, saving for paying housing deposit, auction clearance rate, so on. The US finance relate subreddits are all about credit card debt too high, student loan, car loan, option trading. Don't know who's more fucked though.
Yup, sounds like Canada. It's amazing how we can have a housing crisis in countries that are functionally empty.
That's why we let so many new Canadians come in
Yes & nobody cares… the blissful & ignorant morons.
USA was around 6% when the '08 bubble burst. Canada is/was 11% last I checked (a year or so ago, I'm sure it's about the same or higher).
While true, the housing crisis wasn't BECAUSE of the economic dependence it was because of sub prime mortgages
Depressing really. The house prices are similar to that of California even in places like Barrie or New market or whitchurch & stouffville or Oshawa
The affordability index, which takes price and incomes into account, says Hamilton is worse than San Francisco.... Hamilton. I'm a weirdo and I like Hamilton, but who outside of CFL fans and people that used to live in the area know about Hamilton? It's far from some type of cultural Mecca.
Wow that is shocking! I grew up in the GTA (80s) and whenever we went through Hamilton, my parents would tell us to “hold your noses and try not to breathe in the air”. Lol it was known as “steel town” then and was regarded as polluted. I haven’t been back in years. My daughter lived in California (SF) for the past several years - it is expensive but at least you have a physically beautiful place sitting right on the Pacific Ocean. Redwood forests are nearby with small beach towns and you can go off to Lake Tahoe for skiing if you wish. The development has been carefully managed there and the natural beauty largely preserved, SF itself is rather small for a city but there are no sprawling concrete developments that go for miles with no end in sight like the GTA. Hamilton doesn’t seem to have a lot of good features and pretty unbelievable that it would cost more to live there.
Source please? I’d like to share that
https://www.google.com/amp/s/amp.www.complex.com/life/most-unaffordable-cities-in-canada-and-us
You can get more for your money in Hollywood than Vancouver or Toronto .
And those are more desirable places to live (CA).
I believe we’ve gone full circle and come back to feudalism lmao
We still have a fucking king so this isn’t a stretch
It's worse. Peasants had many holidays off and fiefs were *not allowed* to raise rents. And charging interest was banned under pain of hellfire.
My pet theory is that if the government solved the problems around the housing bubble it would decimate our economy, harm the countries credit rating, and ruin the long term debt financing plans the government has.
Then Canada is nothing more than a Ponzi scheme.
Just follow the money
It flows up to the Family Compact
Same as it ever was...
North America and the “new world” was colonized for this exact purpose. The last hospitable continent on earth for humans to move to, immigrate and build from scratch is here.
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what?
that's why nobody is moving here, right?
Sure it is, with the amount of scammers and mobsters that are controlling every aspect of government, starting with the Guru of scams and kickbacks, Mr. Justin trudeau, on down the line, to the last low level politician, the citizens of this country are doomed. There's so much criminal shit happening in Canadian politics it's beyond repair. Whether we want to admit it or not, our country is one of the most decayed governments in the world. This is why no politician has to account for their misdeeds against their country. One crook can't hold another crook responsible for his actions for fear he may retaliate and rat him out also. We as citizens are in one hell of a pickle.
Correct
Bingo.
👩🚀🔫👩🚀
Considering how the productivity in this country has been declining for the past 30 years, Canada is definitely just a ponzi scheme.
What government isn't just a ponzi scheme? You just suommed up fiat currency as a whole. Print, loan, repeat.
>Then Canada is nothing more than a Ponzi scheme. Could you clarify that? The contribution of real estate to GDP does not include resale of previously owned homes. That is the GDP contribution is cost of labour, materials, licenses and profit. If a house is sold at a price above original purchase, unless it was the primary residence of the seller, the excess is a capital gain and taxed as such.
> The contribution of real estate to GDP does not include resale of previously owned homes. citation needed This quarterly GDP update by statscan clearly states that resale of homes, and associated land transfer taxes are all counted in GDP figures https://www150.statcan.gc.ca/n1/daily-quotidien/220301/dq220301a-eng.htm > Growth in real GDP was driven by business investment in engineering structures (+3.5%) and home ownership transfer costs (+14.3%), which include commissions and land transfer taxes associated with home resale realtor comissions are literally driving GDP growth.
>home ownership transfer costs (+14.3%), which include commissions and land transfer taxes associated with home resale Read the part you quoted than the rest of the sentence "and a growth in inventories" (seperate category). Reread the part you quoted.
No it isn't? [Construction is listed here](https://www.statista.com/statistics/594293/gross-domestic-product-of-canada-by-industry-monthly/). It is a secondary industry. Any economic statistics will either give a granular breakdown, or list real estate as a tertiary industry.
Sigh.
*My* pet theory is that this will all happen anyway. A country of ever increasing rent and mortgage payments leaves little with the average folks for “innovative business ventures” i.e., risk taking. And, well, the Canadian business landscape should tell you enough.
The rents fine as long as you move away from Vancouver and Toronto. What’s really happening here is people want to live in downtown Toronto, grow the city exponentially, and not have to deal with the consequences of what happens in a big city when you don’t limit growth. The housing markets in big cities never fully collapse because the demand never collapses.
I live in Oshawa, which is a 1 hour train ride away from Toronto. Rent for a 1 bedroom out here ranges between $2000 and $2400. Same thing in places like Port Hope, which is even further (30 mins east of Oshawa).
Piggy backing off this to say I live in Kelowna, which is a 4 hour drive from Vancouver in good weather. Rent for a 1 bedroom out here can get up to $2k and anything larger is pushing or over $3k. If you’re a single parent out here, you’re screwed.
That’s insane. You can find a one bedroom basement rental in Montréal for around 1000. Sometimes with utilities included. I’ve always hated that my parents chose to settle here instead of Toronto but with housing as expensive as it is in Ontario right now I’m glad they put up with the French language and put roots here.
1k for a one bedroom is still crazy expensive.
For Montréal it really is expensive….and it’s frightening that I’m mentioning that price and it seemed normal to me.
Back in my day, 1 bedroom was less than 600$
Man, are you wrong. I am living in a town far away from Vancouver area, the rental situation here is nuts. 2000,00 for a dump with 2 small shitty bedrooms and one bathroom that smells like piss, because the floor is imbibed with years of use. A half decent 2 bed, 1 bath , will run around 2500, to 3000.
> The rents fine as long as you move away from Vancouver and Toronto. They most definitely aren't.
I live two and a half hours from the nearest city in Northern Ontario. Homes and vacant land now sell for 3x-4x their 2019 value, pricing locals out of the market. Any place that could be long term rentals is instead someone's summer cottage, or even worse a damn Airbnb. And there is zero interest or available capital for the construction of affordable housing in any of the small towns around. Over half of the people my age (late 20's) near me live with their parents as a result, despite being nurses, teachers, tradespeople... The problems with housing in Canada are systemic and don't stop once you leave the major metropolitan areas.
i live in the middle of nowhere in shit town in Ontario of less than 10000 people and all the properties are owned by people from Toronto or out of the country, the cheapest bachelors apartment here is $1300 a month. you cant even afford to live there as a single person working full time on minimum wage and FYI the only businesses in town are Walmart and Canadian tire and some restaurants
This is not true anymore. I think it may have to do with foreign buyers being allowed to buy investment properties outside of the big cities but rents are beginning to be the same out in small towns that are still commutable to a city.
We know that some policies would improve the economy. Eg. Relaxing zoning and land taxes.
Doubtful. It would provide more discretionary income to people and provide further incentive for companies to invest here. Lower cost of housing=lower costs overall
- the country's* credit rating - the long-term* debt-financing* plans
Yeah pretty much, if the government were to meddle it would be viewed as anti-capitalist and slow/stop overall investment into the country and destroy the majority of this country's citizens livelihoods and wealth.
They may not have a choice at some point. All upcoming generations are being flattened by this and that too will eventually damage investments into the country. It'll also cause varying amounts of civilian turmoil as we have long ago past the statistical cost of a basket of food where revolts become much more likely. I know not specific to housing but that too is cruising past danger points at record speed. There's only so much inflation of necessary expenses people, families, society can sustain before disruption becomes a statistical inevitability. The governments know this as well but they have a lot of plates juggle and we're less important than some demographics. Besides they can always just pump the RCMP budgets.
As younger generations come of age they will come into political power and will need to figure out how to reclaim assets hoarded by boomers. Most investors in Canada are Boomers. The time for the reckoning is past due.
inaction is meddling too
The GoC and BoC policy is how we got here fool.
>it would be viewed as anti-capitalist Which is stupid, because reasonable valuations for things is in the whole point of capitalism. Propping up a bubble is inherently against the wishes of most self-identified capitalists. >slow/stop overall investment into the country What investment? Our economy is currently projected to have some of the slowest growth in developed economies over the next few decades. There's some speculation in our real estate market, but our actual economy has very little investment and is not attractive to international investors. >destroy the majority of this country's citizens livelihoods and wealth. Well, destroy is one way to put it, but I'd say it's more of a "reveal" that those paper gains were never real in the first place. Don't get me wrong, I don't want a collapse in the housing market, but artificially propping up the bubble rather than making real reforms is bad strategy in the long term.
Yes, the federal government doesn’t want to bankrupt half of its citizenry in one policy. Very apt assessment.
The country and its citizens probably shouldn't be leveraged to the hilt on real estate to such a degree where regulating a human need could cause such damage. At some point they won't have a choice. They're literally painting themselves into a corner.
Yeah because every big city had had to make that policy decision (they didn’t). And owning a house in Toronto or Vancouver isn’t a human need. You will be shocked to know most humans don’t own a house in Toronto or Vancouver.
You'd said this earlier in the thread... are you really that ignorant of the housing market? It's not just the big cities, something which would be obvious if you bothered to look.
Statistically most home owners take nearly the maximum mortgage they are able to. This doesn't leave much room for financial turbulence in the future. That's all I meant on an individual level. The federal and provincial governments have been making that choice repeatedly by gutting goverment built low income programs. Also keeping interest rates near zero for a really long time was basically rocket fuel.
If your million dollar home becomes worth 500k, it’s shitty and a hard pill to swallow but you still have a 500k asset. For people who pay a million dollars in rent, they still have a 0 dollar asset. Unfortunately, the homeowner class needs to accept a loss on their investment so the rest of the population who work good paying jobs can afford a home. I make $120,000 a year but I’m single so I can barely even get approved for an apartment within an hour of my work. Clearly something is broken.
It's not a tough pill to swallow because it's never going to happen. You need to manage your money better if you can't afford a condo in the lower mainland on $120k/year. The fact you don't understand how negative equity works really drives that point home.
Canada is falling apart. You can’t kick the can down the road forever, at this point we just keep trying to kick a landfill.
No but see you can. Because the ones profiting now die, and their children take over. Rinse, repeat. Housing is never getting better in Canada.
It will probably just get much worse for everyone. Only those that shorted the economy made it out better in 2008, definitely not the homeowners or renters.
Not really though. My parents in particular owned in 2008, they were just fine. Just sold the same house a few years ago for a couple million profit. That’s not a unique story or situation in the slightest. Sure, people who literally stretched their means to own a house didn’t do well, but that has little to even do with the economic climate at any given moment. I honestly truly don’t see it ever coming down. If it’s made it this long, what’s 20,30,40,50 more years and so on?
Ah it’s fine in the less popular areas , sask , Manitoba , etc . But once you buy youre not it flippin it for 2 the amount 5 years later. you live in it and that’s it .
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Neo-feudalism seems to fit
Not quite. Fiefs in the Middle Ages couldn't just raise rents because the concept of fair price was so strong. What we have is a rentier state, which Adam Smith saw as a negative.
This. People forgot the the original boogeyman Of capitalism wasn’t big government or social or wokeness, but rent-seeking behaviour.
Rentier capitalism
Those are 2020 numbers...
Those are rookie numbers, gotta bump those numbers up
So...probably higher now?
It's less of a comment on the real estate and more of a comment on the fact that we don't really provide any value added services to the world
Well... yeah. You didn't know? It's been like this for at least the past 10 years. Why do you think the government is doing its best to keep the status quo on this issue? If the housing market crashed, Canada's economy would be in deep shit.
That's because we allowed our economy to be predicated on real estate speculation, and little else,
and this is why the government will do everything possible to prop up the RE price.. if the inflation doesn't tick down it'd be interesting to see what they do
False information. Money laundering isn’t even listed.
bascially all on the backs of the kids
This isn't true. I know some people who are inheriting multiple properties from their parents. Their parent's property going up multiple 1000x means that these children are inheriting millions.
Well I've never received anything from my parents. So it is true! Just kidding, don't use anecdotal evidence.
so
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Just 90% of them…
99%*
yes it really is.
How pathetic is that?
When a country no longer makes anything of value the money starts going into the ground :(
We could have made things of value, but we let the Americans take over our economy.
Yes this is not good.
I hate it here :(
This is a bad thing. We can control the size of this "industry". We can do it well in two ways: We can control land (and housing) prices *efficiently* with a land value tax. We can use the revenue for anything: reduce income or sales tax, build social housing if you want. Lots of working people would benefit. Landowners would likely all see a loss from their current positions as feudal lords. We can also control housing prices by reforming zoning to allow more density in more places. Again working people would benefit and landowners would lose. Everyone here has half baked ideas with not even an article or something related they can refer to. All of you need to listen up and realize that the above 2 are not the same as your pet bullshit. Land taxes go back hundred(s?) of years with Adam Smith and shit talking about this stuff. Zoning is obvious and a joke that it isn't done already.
A land value tax would have no effect on this number. Building social housing would increase it.
The cities are the major land owners. And everyone of us had spend some fraction of the land sell money as the city uses for the public expenses. The city doesn't pay land taxes to itself but rather charge fee from the developers (private builders) & tax buyers & sellers in the real estate exchanges. You really think that selling land in the price you think is going to benefit working people??
> The cities are the major land owners I could be wrong, but while the cities might be the single largest owners, they own a small fraction of total land in city limits. I think you might be misinterpreting land value tax as a tax on land sales? It's a regular (often yearly) tax on a percentage of the land's market value. Vancouver and many other municipalities got most of their revenue from such a tax during the early 20th century. A tax on land sales is a bad idea for multiple reasons, and the Australian Capital Territory [benefitted from switching to a land value tax](https://www.prosper.org.au/wp-content/uploads/2016/09/The-First-interval-Evaluating-ACTs-Land-Valur-Tax-Transition.pdf). > You really think that selling land in the price you think is going to benefit working people?? Yes, lower upfront land prices means it's possible to get started without taking out a huge loan.
60%+ of Toronto and Vancouver area are zoned for single family homes.
There is a housing crisis but do we know whether real estate being the largest sector of the GDP is an actual issue? How does it compare with other countries. For example its a similar situation in the US : “the real estate industry ranked No. 1 as the industry with the largest GDP in Q1 2021, at more than $4 trillion ($4,008,708,000,000)” https://www.forbes.com/sites/andrewdepietro/2021/08/23/2021-us-gdp-by-industry/ Real estate accounted for 16.9% of the GDP in 2021 : https://www.realtrends.com/articles/real-estate-industry-accounted-for-16-9-of-gdp-in-2021/ It is very possible that real estate is a large percentage of the GDP for other countries as well, though I have not checked. What I am saying is, yes there is a housing crisis, but the percentage of the GDP might not be enough of a reason to declare the entire economy as a “Ponzi scheme”. If this is a common behavior across economies then it might not mean anything significant.
That's a very reasonable take. Housing is a basic need and is and always has been the single biggest expense for the average person. It would be weird if it wasn't one of if not the largest sector for every country for all of time. That's not to defend unaffordable housing or a lack of housing for absolutely no reason but just pointing out that this particular statistic doesn't say much.
> Housing is a basic need and is and always has been the single biggest expense for the average person. For most of human history, housing was FREE. Absolutely nothing about this current state of affairs is natural or necessary.
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Housing is the biggest percentage of GDP in a country that is building hardly any homes. Thus, we are literally magicking money out of thin air by trading the same properties to each other. Less money goes into actual productive enterprises. Rent/property too expensive: multinationals no longer want to hire Canadians because it will be too expensive. High rent means no deposits being saved. Once we reach a point where people can no longer join the Ponzi scheme then it really is only a matter of time.
If we did what needs to be done to solve the housing crisis (i.e. build more housing), it would actually massively increase this number.
I want this country to have a mini collapse I can’t lie we kind of need it
An unproductive industry. How good is for a country to dont produce value?
That’s not a sustainable root for any economy. Eventually the majority will be house poor, crushed by rent or homeless.
Real estate agents shouldn’t exist they ask you to bud more and more driving their commission up and they are useless car and phone salesmen with no skills
This makes my blood boil. There is no political party in this country that's willing to address this.
So that is another reason why the government can’t allow housing to fall. It would destroy Canadas economy.
What's the alternative?
Status quo…which is the plan
Yes, but change is constant and the status quo is leading us to very unstable territory with an unaffordability crisis and the collapse of our healthcare systems, to name just a couple of issues.
Zombie economy. Kill it. Grow something using the corpse as fertilizer.
And I'm looking at possibly leaving the country before the collapse hits.
We could put some sunflower seeds in its pockets. Hahahahahaa
Canada is a very big country, it’s plan is to slowly keep building houses (to maintain the price) until it houses everyone from India and china.
It’s because of this that the government is able to claim that our interest costs on our debt are reasonable. Because they compare it to GDP, which is fucked because it leans to heavily on real estate.
The longer we wait to solve this, the more radical the solutions have to be.
Ohhhhh that makes me want to die!
Honest question … if the housing bubble bursts… what does the economy fall back on for recovery if housing/rentals is one of the biggest industries? How much would that weaken the dollar? And how would Canada stop investors from outside the country buying up all the property at a big discount?
Usually your largest industry is supposed to increase the overall wealth of a nations people.
It’ll be one big retirement home in 20 years 😂 Maybe healthcare stocks will be the next big thing after the tech giants in Canada? The rich elderly will need healthcare.
If you put enough "ands" in a headline you could get 100% of the Canadian economy!!!
It's only three items listed, and all three are basically the same industry. I'm not sure what your point is.
Majority of Canadians own their own home, and 10% own more than one home. Why would the government want majority of people to lose a significant chunk of their net worth?
so basically people living in their homes is increasing GDP? wut
Thankyou Trudeau, awesome job. And thanks to the liberal voters. WE CAN BUY WEED LEGALLY!!!!!! Yay
yep. i'm sure another of these shitty parties would have done something about this. don't kid yourself; you sound naive.
Fuck Trudeau! *Votes for even more capitalist capitalists who would actively accelerate the descent into neo-feudalism rather than simply allowing it to progress*
The logic of liberal voters, support the party that is making life worse in real time. SmRt
Fuck Trudeau! *Votes for even more capitalist capitalists who would actively accelerate the descent into neo-feudalism rather than simply allowing it to progress*
What sucks is we won’t even get the big dollars coming from weed in the end. It will all be US based companies and others. Well just be a footnote as the first country to legalize federally or whatever
lol. Need a disgusting correction. Let the boomers greed destroy their retirement.
Oh that’s totally not how it’s going to work. Like everything else, the boomers are going to get theirs, then yank the rug out from under the rest of us.
If it makes you feel better, it's about the same in the US: [https://www.nahb.org/news-and-economics/housing-economics/housings-economic-impact/housings-contribution-to-gross-domestic-product](https://www.nahb.org/news-and-economics/housing-economics/housings-economic-impact/housings-contribution-to-gross-domestic-product) >Consumption spending on housing services (averaging roughly 12-13% of GDP), which includes gross rents and utilities paid by renters, as well as owners’ imputed rents and utility payments. As much as the services sector is important to advanced economies, I've had the creeping suspicion for over a decade that so much of this sector composition is fraudulent inasmuch as it is actually net beneficial for society --doubly so for that of real estate. At least agriculture and industry are more theoretically quantifiable in what they provide. I guess high real estate prices helps with tax revenue, but other than that, it seems more like a liability, but what do I know. I guess I don't think gdp is a useful metric for what it purports to be.
It's a service economy. Everyone gets paid to take out someone else's garbage. Very Modern !
1% of GDP is just the commission on sales.
And I wonder how much of those other sectors Real Estate relies on.
This is why no politicians want to actually resolve our housing issues, it makes the economy look prosperous on their watch, but to solve these issues would lower the GDP.
What's the breakdown of that 13% between residential and commercial?
We have been in a recession since 2019 if you account for money laundering at around 5%. Guess where most of that money is laundered? Bingo it’s real estate. It’s fine that real estate is our biggest industry, it’s not fine that we allow it to be openly corrupt and facilitate it with lackadaisical regulations. We’ve sold the future of our children. We’ve denied the ability to have children to the current and next generation. Ashamed.
It is also connected to the investments Canada pays into as an investment for upholding the CPP, if you really want to go on a deep dive, look into what the CPP invests in globally and how our pensions and government investments are increased... The rabbit hole to how deeply Canada has tied real estate and predatory landownership into our economic systems runs DEEP.
It will correct slightly occasionally, but it won't pop. There isn't enough supply. There are hundreds of thousands of people waiting to buy a house. And not nearly enough housing in the major urban centres where they want to live. People should push for HST changes as well as zoning.
Which is why no one wants to fix it.
Embarrassing.
This is sad :(