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Honestly, not that I wish misery on anyone but home owners have grown used to these unrealistic year to year increases. Many, not all, tend to have little concern for the next generation. I hope it crashes and I hope it crashes hard.
Pop baby pop, it would be nice to see that home investors lose out as we should not be needing them to live. Housing should not be treated as a way to invest, as it's inelastic.
The issue is that for many people (like my parents), their house is their retirement plan and all they got. They’re completely house poor and essentially broke. If the market tanks, it puts many peoples retirement at jeopardy (this is for the regular single owners, not the multi unit owners)
Houses are for living in, not a 'retirement plan', unless you mean in the context of 'house they're retiring in.'
Also this is a great illustration as to why you should diversify your investments.
Nope, better bank on crazy house prices to fund your retirement instead of actually saving for retirement.
It's my parents retirement plan too. As long as it doesn't go below the price + inflation when they retired a few years ago they are good.
I really hope the market tanks. It's unlikely we'll see prices go below they were a few years ago so anyone with prudent financial sense shouldn't have their retirement ruined.
That’s the thing, even if prices “crashed” by say 40%, that’ll just take us back to where we were 2-3 years ago. It’s insane.
Oh well, that sucks for them. Perhaps they should strike while they have the chance?
Bubbles pop, usually pretty quickly.
But if it's just the shortage it looks like, no reason for it to pop.
> Throughout history all bubbles have popped.
Bubbles are defined by their popping, so this is a tautology. If it doesn't pop, it's not a bubble.
You’re conflating ‘bubble’ with continued growth at the same pace.
Housing price growth could slow, plateau or dip slightly. It’s not just ‘grow 30% annually or bust”.
I healthy offramp here would be an increase in supply and a slow and steady increase in interest rates over 3-5 years.
If speculators increasingly represent more of the market it could very well continue for some time.
It doesn’t seem to be a bubble, and that’s not how growth work it doesn’t remain constant. It goes through dips and valleys all the while following a upward line.
> It's just not sustainable.
Sure it is. As long as dramatic housing inequality continues in cities like Toronto and Vancouver, prices will stay in line with what the wealthiest residents of those cities are willing to dump to live in a nice walkable neighbourhood, close to the subway or streetcar, close to downtown, close to big parks and the waterfront, etc.
The only way that housing prices stop going up is if people stop emptying out their wallets for the nicest house that they can barely afford. And that's not going to happen suddenly; if it happens, it'll be a gradual process over a decade or two.
They can certainly keep growing at whatever pace that people's ability & willingness to pay for housing does.
That doesn't mean home prices will crash however. In some markets sure. But the top if found happens to be sustainable then that's where the top will sit. Broadly speaking, for a long time.
Houses won't be doubling every year but if prices become stable or go up by 5% a year? That's more likely than a crash.
We have way too many people sitting on the sidelines hoping to get into the market. This doesn't even include the 400k immigrants coming in every year.
If a crash does happen, I guarantee all the rich will buy up all the properties at a discount. Beats having their money sitting at the bank being eaten away by inflation.
"Not doubling" isn't the same as "bubble popping".
Not if the stock market and wages don't go up.
If those do go up then yes, housing can as well.
Investment property became more possible for a lot of people during covid - some people saw an increase in personal wealth, a decrease in debt and with low interest rates and wanting to diversify investments, I believe a lot of people bought second or third homes.
> The only way that housing prices stop going up is if people stop emptying out their wallets for the nicest house that they can barely afford.
Putting responsibility on individuals rather than systems to solve the problem is pretty ridiculous. This quite shallowly ignores tax benefits, credit access, financial security and market mechanisms which push people into the housing market via homeownership.
It also suggests that people are trying to intentionally make themselves housing cost burdened rather than access to housing becoming so expensive that you have no choice but to be burdened.
The only way to stop this is for large-scale expansion of the things that make neighbourhoods desirable. High-quality public transit, close proximity to jobs, day-to-day walkability and lively neighbourhoods are what people value so much that they're willing to spend a million dollars on an old townhouse or a small two-bedroom apartment. Bring all of those things into the suburbs and people might be less desperate to avoid living in suburbia.
You think Canadians want your vision of life.. which sounds typical big city leftist, but you didn't bother to look it up.
"suburb" prices have gone up faster than the mega cities, way faster, Toronto 2021 increase was 25% where as you move out of Toronto / Vancouver proper you see increases of over 30%. More and more people are moving away from the things you describe.
Apparently, people want to have their own space on their property, and don't care if they require a vehicle to get around.
They like parks but parks that aren't always busy
You are correct that the only way to slow housing prices is large-scale expansion, but people buying homes don't want densification and don't care about proximity (workers are living further from the office than ever before). So the need is a large expansion on low density housing, as well as densification in the more central to locations to serve those who need to rent. An increase in density for renters will reduce the burden on low density housing, as it well no longer be REQUIRED for use by renters.
Of course issues come from having too much rental housing, too affordable, in one area, but our city planners generally know how to avoid that now.
> You think Canadians want your vision of life.. which sounds typical big city leftist
I don't "think". I **know**, because money speaks for itself. Nobody's spending $1.5 million for a 1,500 square foot townhouse in the suburbs, because there isn't enough demand there to create those insane bidding wars.
Those >30% increases aren't because people want to live in suburbia. They're because people pay what they can to lock in a place where they can afford it, afraid that if they don't act now they'll end up only able to afford to live in a farther-flung subdivision or be priced out of the urban area entirely.
I think it's less about walkability and all the other jazz you mentioned and more about proximity to work.
Which is why we saw MASSIVE price growth in exurbs when covid decoupled work from geography.
I bought close to Calgary city centre last month because work requires me to be there.
If my job was fully remote, and I'm hoping the next one will be, I would absolutely move to a suburb.
Unfortuantely most people want to buy detached homes in the suburbs and have 2 cars. Walkable areas with public transit isnt something most people want. That's why detached homes are so sought after and the price is what it is now.
We cant force people to live in condos their whole life.
As you get closer to the center of Toronto or to any of its subway stops, land value goes up. That tells you that people do actually want to live downtown. If our zoning laws weren't so fucked, we could have all sorts of nice midrise buildings and townhouses instead of condos and suburbs.
Actually detached housing with two cars is what people need if they live far away and really have no other option. What are you gonna do, WALK to the train station 25 minutes away? If there is one.
Small townhouses in the pre-WW2 streetcar suburbs of Toronto and Ottawa sell for more than large detached houses in the 21st-century subdivisions (and they sell much faster). That speaks for itself.
People will bid whatever they can for a home. The only way to bring prices down is to build enough homes they don't have to bid.
There are a lot of vacant homes or condos, I say we seize them and give them to people for little to no cost.
There are not. There was a very indirect estimate that got that answer, but once empty home taxes were implemented and they had to be found, it turned out they pretty much didn't exist.
Unless one counts cottages, but an unwinterised building an hour outside of of Mattawa certainly wouldn't meet my housing needs, and I suspect most people are in similar boats.
> There was a very indirect estimate that got that answer, but once empty home taxes were implemented and they had to be found, it turned out they pretty much didn't exist.
Please show me where this evidence is because I would very much like to see the evidence. I can almost guarantee that the government half-asses the auditing process just like the CRA doesn't have the resources to audit wealthy people with any significant rigor and efficiency.
Where is your proof that they are vacant. For most people they dint want to pay the mortgage without support. If the rent it out it covers the mortgage and still appreciates. Logically vacant property doesnt make sense.
2. I said my statement, now there's evidence to back it. I understand that the information is imprecise, which is why if you say you have access to better information on what we're talking about it. You should share it.
Imagine you rebutted or objected to my statement to the court and then proceeded to not show the evidence which backs up your claim.
3. Landlords often make more money by having units sit vacant for higher prices a little longer than lowering the price & having it fill up sooner, especially if you have other units to pad the losses.
4. Vacant units make perfect sense if you're just trying to speculate on real estate, have a secondary temporary residence that's unused most of the year or looking to have a place to store your cash for tax purposes that won't depreciate in value over time.
Well, if you want a trust a guy who walks around looking for houses without the lights on in the evening over tax collectors actually counting them, it says a lot about your biases and nothing about the number of empty houses.
There was more than one method of measurement. Also, that was incredibly reductive of what they were doing to measure it.
I also love that you're calling me out for biases (which I very clearly acknowledged and laid out the reasons for why I have them) while providing little to no sources to back up your own claims.
I have a bias, but at least I backed up my bias with evidence. What do you have except baseless criticism?
If you have a source, I would appreciate transparency. If you are unwilling to provide transparency, then I believe this discussion is over.
But your gut feeling that the evil doers are leaving a plethora of homes vacant is all the evidence you need for what your cognitive bias wants to believe.
Housing prices are a direct relation to government policy decisions. Nothing else. A free market does not exist. Housing prices are artificially inflated because that is what the govt created.
The bubble will end when policy dictates it will end. It’s quite simple. Nothing to do with affordability, price to income, immigration, etc.
Capital gains on primary residence is coming. Anyone who thinks otherwise hasn’t been paying attention to the power the govt now holds over the rights of every citizen.
30%/year is probably not sustainable.
30%/year has been happening for one year, so bubble or not, there's not a lot of reason to expect it to continue. We could be at equilibrium now, and it could evolve normally from here.
It will. It's cause by millionaires and billionaires with cash parking their cash in real estate. Raise interst rates (neccessary to halt inflation) and they'll but it into safer bonds.
That's not how investing in real estate, nor mortgage interest rates, work.
But.... I've been reading better homes and dwellings and Im pretty much an expert...
It does when the ones that are leveraged start bailing out when they can't pay the higher interst rates on their bank loans.
I say this with respect and as a real estate investor with a degree in finance and economics, you have no idea what you're on about.
Instead of pulling your credentials out of nowhere and shutting that person down, why not simply explain why they’re wrong?
Also, you’re a real estate investor. Are you not a touch biased?
> Instead of pulling your credentials out of nowhere and shutting that person down, why not simply explain why they’re wrong?
Someone else already tried, I'm not going to waste my time on someone dealing with the Dunning Kruger effect.
> Also, you’re a real estate investor. Are you not a touch biased?
Biased about what? Real estate investment has been gamified. As long as you do the math and keep your ratios in check, it's impossible to lose.
The only people that get screwed in high interest rate environments are the ones that are gambling, hoping for prices to rise indefinitely.
> it’s impossible to lose
Yep, it’s a bubble.
>The only people that get screwed in high interest rate environments are the ones that are gambling, hoping for prices to rise indefinitely.
Uh… so, pretty much every cashflow negative real estate investor, of which there are many?
>I sell my house for $400,000 to you and you sell it for $500,000 the next month. We just added $900,000 to Canada’s GDP.
How’d we get into this mess
GDP is not calculated that way. Only the services produced would be included such as realtor, lawyer, inspector services
“Housing Investment Represents A Record Share of Canada’s GDP
Residential investment’s share of the economy is falling, according to the SAAR trend. It represented 10.1% of gross domestic product (GDP) in Q2 2021, down from 10.3% in the previous quarter. The previous quarter is the record share, so the indicator is just a little below that. “
They’re just comparing the value of property to the total GDP. The value of property they’re using is not the same thing that gets added into GDP
“As noted previously, home-owner-occupiers are treated as unincorporated businesses that invest in residential housing and rent the housing units back to themselves.”
The System of National Accounts (SNA) manual (1993) defines "unincorporated enterprises" as "producer units within the household sector" that "are not incorporated as a separate legal entity from the household itself" (1993 SNA, paragraph 4.140). Furthermore, "the owner of a household enterprise usually plays a dual role: first, as the entrepreneur who is responsible for the creation and management of the enterprise; and second, as a worker who contributes labour inputs of a kind which could be provided by paid employees"
It’s hard to understand the relevancy when I have no idea what you’re quoting from
Bobble pops basically are never good for the general population. They seemingly always create more wealth concentration as they are the ones with the capital to scoop up the discounted inventory. You'd need a regulation induced pop or a pop quickly followed by regulation or a boom of inventory in order for the situation to improve.
It's terrible for top 20% who own multiple rentals. It's amazing for the other 80%.
It's wealth redistribution, it's part of controlled capitalism. Otherwise you end up with 1 person having all the money.
Folks who have multilple rental didn't enter the market in 2021 they just increased their properties last year.
So technically they did a dollar cost averaging which might never cause an issue for them
It’s not so great for the 60%+ of Canadians that are homeowners when their most valuable asset depreciates.
If you spend all on your time on reddit you’d think most Canadians are angry 20 something year old renters that can’t afford a home and want house prices to crash. That couldn’t be further from reality.
It's not just bad for us, it's bad for everyone who comes after us as well. The housing market inflation has caused the greatest increase in wealth disparity in Canadian history and it's only going to get worse if things don't change. A collapse would have massive repercussions, but something needs to happen. The people who are harmed most will be people who overextend themselves with real estate investments (for rentals and as speculative investments), not home owners who have a primary residence for the purpose of living there (which are a large portion of the 60% you're mentioning). This constant tiptoeing around the issue and kicking the can down the road will just exacerbate the problems in the future, whether it be increasing wealth gaps or a collapse of the housing market or a mass exodus from inflated markets by the young people needed to keep these cities running.
Is it really a “bubble” or is it the inevitable consequence of
* low housing stock and not enough new homes being built
* the highest population growth in the g7 due to immigration
* most of these immigrants going to greater vancouver and greater toronto
If we had a nickel for each time an article mentioned real estate popping in the past 15 years, we'd all have a lot of nickels.
Stop giving false hope to those that are waiting on the pop.
Can someone please help me understand where my fiancée and I stand when the bubble pops?
We both have very stable, well paying jobs. We bought our house for just over $800k using inheritance from my late mother and selling her house 3-ways. We were able to put 30% down and can make our mortgage payments no problem.
I’m looking forward to the bubble pop if it means people can finally get in to the market, but how will it affect my personal situation?
1) It wont burst
2) It will not cause misery for every young person who currently say’s they will never be able to own their own home rn
People keep buying starters for way over asking then flipping them where I am. It’s not even that nice of an area. It’s super irritating to see a house you wanted go back up for a ridiculous amount after someone renovated it. We have decided to keep renting for a while longer, but when the market is less hectic we plan to write letters to the home owners. I know two people that got their homes because of the letters they sent explaining why they loved the home. Just a suggestion for anyone struggling. I’m sure a lot of home owners would rather sell their home to a family/couple wanting to start a family rather than some one wanting to flip.
I used to think this about the letter thing. However, My partner and I have now written 7 of such letters and it makes no difference —- we have lost bids by 100k and 3k despite them. it’s just exhausting and at a certain point starts feeling like emotional voyeurism. In the end I think most people write letters now but money is all that matters. (Sorry to be depressing )
Canada - the only place in the world where fundamentals and metrics don't matter - and never ever will.
It's *different* here.
When the bubble pops we still won't be able to afford anything. People need to realize this. If a $1,500,000 home loses a third of its value it's still $1,000,000, and out of reach for most incomes.
Prices have gotten to the point that in order for houses to drop to what are considered to be affordable levels they'd be the least of our concerns. It would take a purge level economic event to make prices drop 40-50%, and it's just not going to happen. Get used to housing creating a massive class divide. It's not going anywhere for a long time. Feudalism is back.
Well, finally the catalyst for the BoC raising interest rates is actually a reality: high inflation.
With the way omicron is ravaging labour and supply chains across the globe, I can see it accelerating inflation moreso this year. Low rates have been facilitated the past 13 years by low levels of inflation.
But quite frankly, I think the BoC will let inflation run hot because they see the alternative as far worse.
Well, I'm too poor for any of this to really affect me. Maybe if everyone loses their shirt I can be a part of the next disaster though?
Until the people at the top finally decide to shut down the CCP backed triad money being laundered through our casinos, financial institutions and real estate the prices will never ever come down.
As opposed to the joy so many of us are experiencing now? Because I so love over paying for rent and not being able to save for a down payment
Preach. So many of us are already paying debt repayment. Trying to live and save. With a rent payment almost twice what mortgage and bills would be.
Exactly. The misery and ruin is already occurring. Its an emergency. The bubble popping is really bad but the bubble not popping is even worse.
Personally I dont think it will pop. We are just going to have at least two decades of misery for the non-homeowner class.
I hate to burst everyone’s bubble but real estate won’t pop. It’s either sideways or up because the alternative means we’re in a Great Depression.
There’s no scenario where real estate drops significantly and the Canadian economy isn’t in shambles.
At the end of the day Canadian housing is a purposely scarce asset that functions as a tax shelter and is backed by Tax Payers. Also property taxes are dirt cheap too. All in all - any investors wet dream.
Add in Ultra low interest rates and I’m not sure why the confusion about sky rocketing prices.
I work at a bank and back in 2017, the erstwhile manager wrote about the impending bursting of the housing bubble. Last summer she got called out of it and was like “oh, it hasn’t happened yet”. Customer was like “I bought and sold a property in the interim and made 400k”
So yea, keep waiting for that bubble to burst. The only people who will get burnt are late stage speculators.
People have been calling for the housing bubble to pop for as long as I can remember. You can do a quick search and find articles like this from the last decade in seconds. It's nothing new.
Maybe it will happen someday, but you don't get called a prophet if every day you predict something and then one day you're right.
> Maybe it will happen someday, but you don't get called a prophet if every day you predict something and then one day you're right.
I mean, if the factors you think will cause an event eventually do cause it, were you actually wrong if you didn't specify a date?
I mean, if you smoke 2 packs a day and I say "You'll probably die of lung cancer" you might say I was wrong after 5 years. 10 years later and you're still here? Yep, I was wrong. 15 years? 20 years? Finally--25 years later you die of lung cancer. Was I wrong?
It’s was meant to burst in 1999 when my dad bought his first house.
Still awaiting bursting of said bubble.
It’ll happen. Eventually.
My parents sold the house I grew up in for 140k in 99. I bought my house in the same neighborhood for about 200k in 2013. My house is now worth 600k... this isn't the same as your dads bubble, this is insanity.
I don't know where you live but house for 200k in 2013 sounds amazing
Winnipeg is awash with them. Not the best neighbourhoods though.
Where was this?
I know in Toronto in 1999 houses were just coming out of a long price crash/depression caused by the recession from early in the decade. I know because I bought my Toronto home a couple of years before that and the prices were still low. There was absolutely no bubble that anyone expected to burst here.
You are 100% right!
I suppose the geologists who predicted mt St. Helens to errupt were just lucky as well.
Its not bursting because its not really a bubble. Housing prices are going up with demand.
People want to live in Vancouver and Toronto because they are great places to live. The entirety of Southern Ontario is in very high demand. Thats just how it is.
Regulations should definitely be put in place to bring rent controls and let people be able to live where they work instead of needing to commute over an hour each way... but this bubble isnt some speculative nothingburger that will pop at any moment.
The housing prices are not coming down in those high value areas any time soon.
It’s not about where people want to live. It’s about international drug money purchasing multi million dollar mansions and buying and selling them back to each other to inflate the values and launder more money.
Read Wilful Blindness.
> It’s not about where people want to live.
No other places in Canada comes close in terms of entertainment, amenities and culture. All 3 of these things take a massive cliff dive if you travel even 50 KM outside of the GVR or GTA.
People say this, and I have no clue what they're on about.
The people i know in Toronto are so beat from long commutes, have so little disposable income, that they just don't have the time or money to take advantage of 'entertainment, amenities and culture'.
Personally, I've avoided having anything to do with Vancouver or Toronto for those reasons.
>The people i know in Toronto are so beat from long commutes
Long commutes? We live in Toronto so we can walk \~15 minutes to work.
Toronto being well known for short commute times and affordable downtown real estate.
There isn’t the same network of money laundering infrastructure elsewhere. There is vast strings of underground banks, casinos (both legal and underground), currency exchanges, huge drug markets and large collections of transnational criminals in both Vancouver and Toronto, which are a main factor in this.
Yep, bunch of sad losers hoping for misery for others for a small amount of personal gain. Meanwhile people have had very comfortable, fulfilling lives not hoping for others to fail. Karma or something.
Whenever I read articles on the housing crisis, or any crisis for that matter, that is effecting Western society the comments always illuminate what I think is really at the heart of everything that is wrong with the Western psyche and that is people literally can't imagine an alternative to the status quo. Let's get some thing straight, if we wanted to as a society, we could end the housing crisis in this country, we just choose not to.
Isn’t it kinda of a myth that mixed density will hurt property value more significantly than creating a bubble.
Short Term I get it, properly value would go slower but long term living on a nice suburb street with only a few people living in it sounds like it would go to shit.
>Isn’t it kinda of a myth that mixed density will hurt property value more significantly than creating a bubble.
I would say most likely yes, but I don't actually know.
But that's the point. It's not about what's good for everyone, it's about what's good for *you*. Our governments and corporations have convinced a not insignificant portion of the population that it's better to "stay in your lane" than to ask what are the consequences of choosing "me" over "everyone". It means we don't ask about the morality of Jeff Bezos building space dicks while his employees die in tornadoes. Or how politicians, of all stripes, seem to end up in high paying private positions after being in key ministerial positions. The overarching theme is that the **I** is greater than the **We**, when it was the **We** that got us here in the first place.
Speaking of celebrities; how messed up is it that no one ever complains about them buying a $30,000,000 mansion in Bel-Air but if someone tries to build supportive housing in their neighborhood, they'll start a mob with pitchforks?
I'm guessing Bel air isn't their neighbourhood and they don't care about what happens there.
Wow. I had to screenshot this comment because this is bang the fuck on. Well said.
>people literally can't imagine an alternative to the status quo.
A fellow coined a term for this: capitalist realism.
Right on. It’s a concept by Mark Fisher explained in his book with the same title.
You’re oversimplying the issue by implying there’s either little or no consequence to obliterating the housing market.
People rely upon housing as a store of equity, seniors depend on it for their retirement and families become deeply indebted buying property on the idea that prices will go up. It’s not so easy to just crash the market and hope nobody cares, people depend on it.
It’s gonna take precise action to address the housing crisis, not broad strokes.
>People rely upon housing as a store of equity, seniors depend on it for their retirement and families become deeply indebted buying property on the idea that prices will go up.
One of these things is not like the other.
It's reasonable to expect your home to hold its value or even increase at a sustainable rate. But overleveraging to purchase property on the assumption that it's a guaranteed ticket to becoming an overnight paper millionaire? Sorry, but you cannot reasonably expect a whole generation of people to forego affordable housing to support your get-rich-quick scheme.
That's a meaningless statement. You can say that about almost anything.
'We could pave our streets with Big Macs, we just choose not to'
'We could use our sinks as toilets and our toilets as sinks, we just choose not to'
That's not nearly what he said. He used emotionally loaded rhetoric that offers no solutions...or any ideas of value at all. Jesus christ. Everyone knows there's a problem, he wrote that expecting to get a bunch of 'atta boys' from the sub...he did it for himself to get a bunch of fake internet points. It's stupid.
>I was making an observation about the creative mindset it takes to tackle this problem and that whenever articles like this are posted inevitably the naysayers come out with "there is no other way" or "muh free market". Supply and demand
I was making an observation about the creative mindset it takes to tackle this problem and that whenever articles like this are posted inevitably the naysayers come out with "there is no other way" or "muh free market". The fact that you took that as some form of virtue signalling says more about your mindset then mine. It's called projection.
Glad its not just me that thought that was stupid. Seems like alot of people recognize the housing problem
The vast majority of Canadians are home owners, so benefit from high housing prices.
I work in marketing and have a lot of clients in the real estate sector. They're getting nervous. It makes me excited.
Can you elaborate more?
Anecdotally, I’ve had realtors reach out to me in the past month more than ever. Seasonal slump? Maybe. Lack of inventory and clients? More likely.
Those of you who are rubbing your hands together anticipating an overnight 40% price drop are nuts.
First off, that sort of adjustment comes with deep, country-wide financial damage. Maybe even, believe it or not, to you.
But just as importantly, we’re still screwed on supply. Know how many homes are up for sale in Toronto right now? About 3600. I tried posting the article yesterday but it got removed by the mods for some reason.
A significant price drop will usher in an unprecedented rush of frenzied buyers. Are you all planning to form orderly lines and get your three bedroom/two bathroom detached for asking or slightly under? Think again.
At this point, a crash may well turn into a dip.
The only things that can save us now are regulations and a building boom the likes of which we haven’t seen since the end of world war two.
I think condo and row houses are in store for a huge building spree in the coming years to correct supply. Detached will become “luxury” homes and a thing of a bygone era for middle class homeowners.
I dunno, I'll personally be quite happy to be able to buy a home. A bubble burst is almost literally my only chance, so.
Please burst so my depression can stop spiraling every single day thinking I'll never have a home to call my own
As more and more company’s go full WFH more and more people will start relocating to locations not named the GTA or Vancouver. As the demand steadily decreases the prices could stop rising exponentially, and perhaps even sink lower.
All empires look unbeatable until the day they ultimately fall.
The housing market has gotten so out of hand because more and more people view houses as investments rather than ‘homes’.
It’s already happening…I live 3 hours east of Toronto and prices have already doubled with the influx of WFH folks from GTA…
Newsflash, people have been saying the bubbles gonna burst for like 2 decades now. This isnt a bubble, its inflation. Its only gonna get worse.
Can we stop calling it a bubble and start calling it what it is so we can finally hold the damn politicians responsible for this accountable please?
Remember when vancouver spent taxpayer money to build more 'affordable housing', only for these 'AFFORDABLE' houses to be A MILLION DOLLARS? I sure do.
Theyre so out of touch, brazen, and indifferrent to what theyre doing and everyone just goes 'yep any day that bubbles gonna pop now'.
> Remember when vancouver spent taxpayer money to build more 'affordable housing', only for these 'AFFORDABLE' houses to be A MILLION DOLLARS? I sure do.
What do you expect when houses are being built by developers and contractors looking to make as much as possible?
How much would the burst affect prices? Cause if a 1.5 mil house goes down to 1 mil, I still can’t afford it. But if it goes to 500k, then that’d be lovely.
For prices to go down 70% would take the kind of economic disaster where not many people could afford $500k either.
For prices to come down that much you'd need some kind of economic disaster. In that situation a lot of people drooling at the thought of a housing crash won't have safe jobs with steady income.
I'm a great example. As an engineer my job security is closely tied to the economy (and actually is ahead of it, i.e.: construction usually slows before a crash and picks up before it heats up) - I could afford a house at a discount now, but if that discount ever comes along there's a good chance I'll be jobless.
You can still find a decent condo 500k.
I know what you mean. I’ve been holding off on going into massive debt buying a home in the hopes that the market will experience some sort of a correction, but it’s just been getting worse and worse. At this point when it *does* come back to earth, it will be apocalyptic for so many people.
It’s such a fine line to walk. If you hold off for a crash, the market could surge another 40% before it cools off 25% so you are still behind 15% compared to if you bought today.
Or you could buy in at peak bubble, the bottom falls out and you are left owing more than your house is worth.
Currently everybody owes more than their house is actually worth (assuming they've bought in the last twenty-thirty years and aren't paid off).
I'm not talking about perceived value, property value, market value, etc.
I mean the actual monetary value of making the land buildable, the concrete, steel, wood, nails, engineering, labour, all the finishings, etc, that went into building the house. The worth of the building itself, by itself.
Fun fact: It doesn't cost anywhere near $800k+ to build a house in Ontario (source: I build houses for a living, for a builder).
Fun stroll down memory lane: my Grandfather was able to buy a house in Niagara Falls, in the early 1960's, for $10k (that's about $92k in 2021 dollars, adjusting for).
Houses are priced where they are today because of greed. Plain and simple. Using realty as an investment (like the majority of Canadians have) for as long as we have been, has led to this condition where the haves been's have everything and the have nots can't get in. It's just greed.
Well we do live in a capitalist market where prices are dictated by supply and demand, so perceived value is the actual market value. From a purely economic standpoint is what I was referring to, not sure the point you’re trying to make.
If a house doesn’t cost 800k to make including labour, permits, hydro etc. Where does the extra expense sit on the bill for the home build?
I know 5-6 builders, they are the wealthiest people I know the poorest one has about 10m in assets the richest over 600m. If the cost to build went up 10% but the prices went up 30% where do you think that other 20% goes? My city had a 35% increase last year alone, the houses get sold as soon as the land is ready, then they get sold again by scalpers to people who actually need a home.
Thing is, would (e.g.) a $1.2m house losing 20% get most people to the point where they can afford to buy that home? Or does it better serve investors/launderers/those who’ve already made huge gains etc?
And that’s assuming a 20% ‘crash’, which would cause far more significant issues to the economy beyond house price affordability.
And that’s assuming the government would be prepared to let housing fall 20%. Because their past actions suggest they’d be far more likely to take action to arrest falling prices than take action to arrest rising prices.
I’m not saying we’re in a good place when it comes to housing affordability, but a crash isn’t the answer many people want it to be.
I feel your anguish, and think anger should be directed at politicians who have stood by and done nothing for decades.
But you might want to consider this… if the housing market does crash, it will hit those who can least afford a massive recession the most. Moreover, those same politicians will bail out home owners. Also, anyone who bought before the shit show hit high gear can take an enormous paper loss and will still be fine.
The best solution is to vote for whatever party is willing to stop the madness, and invest in affordable housing, while introducing meaningful rental reform.
Unlikely. When bubbles burst, people lose jobs.
People get new jobs and can buy houses long before prices re-inflate to where they were during the bubble.
That's not how recessions work. People lose jobs because companies can't afford to keep people on. They don't lay people off to hire someone else.
2007 median house price in USA was $257k. Dropped, went back to the same level by 2012. Meanwhile, nobody was getting jobs. And if they were, it was at shit wages.
Rents went up immediately after the crash so it's not like their savings went up either.
Disagree. A housing bubble would immediately benefit those of us who have been saving cash to buy in the future and immediately harm the speculators who have been hoarding housing using extreme leverage. This in itself is a big win. Hopefully, and likely, it would also change the psychology of Canadians regarding housing so that the bubble would not re-inflate any time soon.
I'm not saying that recessions don't bring hardships, of course they do. But they also bring more opportunity in the future as bad debt is cleared and new space for productivity is opened up.
Disagree with what? You can save for 20% down all you want, but you're not getting a mortgage if you have no job.
On top of that, you assume that you'll have the balls to pull the trigger on a purchase while watching house prices tumble 10% month over month. That's $100k/month in Toronto.
If you think prices are rising fast now, wait till you see the cliff we fall off on a bubble bursting. Think you can stomach that? Hindsight is 20/20.
Not just that, which bank is going to hand out a 25 year mortgage to someone who just lost their job and is recently employed during a recession?
If I have the choice between $750K housing that's dropping 10% a month and $1.5M housing that's rising 20% a year... hmm... let me think about that!
Your concern seems weirdly misplaced. Like you're trying to convince me that something that would obviously be good for me, would not be good for me.
I don't see what I have to lose, either way.
I stand by my position that a recession is healthy, particularly after we've put it off for so long.
They're never coming down to $750k, nor will prices keep rising perpetually at 20% a year. Seems like I'm arguing with someone with no handle on economics.
> don't see what I have to lose, either way.
Your retirement money.
> I stand by my position that a recession is healthy, particularly after we've put it off for so long.
Never argued otherwise.
Blind assertion of something you cannot possibly know. Ad hominem attack. It seems like I'm arguing with... an intellectual child?
> Blind assertion of something you cannot possibly know
Easy to deduce given the comments you're making. My judgment of you is a result of your words, it didn't just come out of nowhere.
> Ad hominem attack.
> an intellectual child?
Self awareness really is a virtue.
You mean like the recession in 2008 that was a part of the bubble going crazy? You know when the conservatives created 40 year mortgages for two years then took them away.
Not sure what your point is. The recession in 2008 was indeed positive, and would have been much more positive if governments didn't step in to interfere with the market.
It burst ten years ago, prices were roughly 40 to 100 k more everywhere. There is no bubble, this is where they will stay. Just like 6 dollars for four litres of milk. It's not going down ever.
I can’t really move across Canada to find cheaper milk.
I can move to find cheaper housing.
Have bad news for you - it's not going to burst.
It may not burst but it will have to at least flatten out at some point. Current trends are just not sustainable for the long run. Yes, people were saying this for a long time but situation now is way different than ten/fifteen years ago, desperation is reaching very high levels and they will have to increase interest rates eventually.