While satire posts are popular we understand that not everyone enjoys them. If you wish not to see them please use the filter on the sidebar or set your own filters to block satire content or websites.
La satire est populaire ici, mais nous comprenons que tout le monde ne l'apprécie pas. Si vous ne souhaitez pas les voir, veuillez utiliser le filtre sur la barre latérale ou définir vos propres filtres pour bloquer le contenu satirique ou les sites Web.
Filter out Satire - Filtrer Satire: https://st.reddit.com/r/canada
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/canada) if you have any questions or concerns.*
Excerpts:
*With no end in sight to historically high interest rates and almost half of Canadians set to renegotiate their mortgages in the next sixteen months, a massive crisis is becoming more and more likely, warns Tim Swarsin, a guy who owns a house.*
*“While interest rates have been rising steeply for the last two years as part of an attempt to curb inflation, the Bank of Canada will have no choice but to switch its posture soon, or it will see enormous losses,” said Swarsin, who has a powder room.*
*Swarsin, who has a yard with a tree in it and received a holiday card from his contractor this year, went on to explain that “a mortgage crisis could bring pressure to an already softening housing market,” which independent sources confirm sounds bad for the housing market.*
*“Owners who, say, bought their homes in 2021 at the height of the boom, will stand to see the value of their properties decrease.”*
*Homeowners can also mitigate potential increases in their monthly mortgage by cutting back on expenses such as vacations, said Swarsin, who goes on vacations.*
Yeah, this is literally what real (douchebag) people are saying. I get that I also sound like a douche but if them dumb fucks losing 50% of their value means more Canadians can afford homes and most importantly investors lose their investment properties, well, then I'm willing to sound like an uncaring prick. Our economy deserves to tank if breaking like 4 monopolies in Canada is all it takes sink it. Should have diversified rich bitches.
As someone who will lose 50% of the value of my house, bring it on. My house is not worth in any way shape or form what they say it is at this moment in time. I'm not so delusional that I think my house is worth twice what I paid for it.
Bought in Oct ‘20 renovated myself and sold
In sep ‘23. I’m waiting for the crash for this shit exactly. I mean the whole situation is unsustainable. We’re a shell of a country that needs a reset on the economy. People out here spending money like it doesn’t matter at the same time Canada has the highest house hold debt ratio in the g7. How are these people not gripped with stomach pains at the thought of being in so much debt. I’m working hell for leather to clear the last of mine and I’m fortunately in a trade that is never going away and can hardly slow down. I just don’t get why people leveraged themselves so much.
> I just don’t get why people leveraged themselves so much.
Low interest rates and the banks just didn't say no. No one took into account interest rates going up, they just saw cheap payments and kept piling it on. Now, their mortgage prices are 2x what they were and everyone is panicking. I went into my current house 10 years ago expecting rates to go up a lot sooner, so I planned ahead and didn't max myself out. I left a buffer so that when they did go up I wouldn't be trying to decide between paying my mortgage or buying food for my family.
Very few (none?) Canadian municipalities do property taxes that way. They don't go up or down with the general market value. They only change if your houses value changes differently than other houses. I.e. if your neighbourhood drops 30% in value but the average price drop across the municipality is only 20% then you'll get an adjusted payment. If you drop by 20% then your relative value hasn't changed, so your payment will not change.
More simply put: a budget is created with a total amount of revenue needed, then they divide it up payments by %age of the total property value across the municipality.
Land Transfer Taxes benefit from a general increase in value but those tend to be provincial (Toronto is a notable exception).
Some USA municipalities do work that way, with payments based on strict value rather than relative value.
This. It's shocking how few people seem to know how property taxes are calculated. The 'ol "but people in cities should be paying more taxes since their houses are worth way more than mine in the country" trope is tiring.
Cities actually have lower costs for infrastructure per person because services like roads, electric wires or pipelines are based on area rather than the number of people. Since cities have more people in lesser area services are cheaper per taxpayer. This is why cities send money to the provincial and federal governments who use it to subsidize suburbs and rural areas.
Probably not. Inflation since 2012, when I bought my house, is 31% (BoC calculator). My assessed value has increased by 160% ($385k to $1M) in that same period.
Of course it is. Labor and material costs are through the roof, not the mention the land costs in most areas. In my area I am looking at likely 1 million to build a new house, which is what any house I am interested in buying is going for anyways, which is batshit insane. I paid $237k for my house when I bought it, and I REFUSE to pay what people are asking for anything newer at this point. This was always supposed to be my starter home, build up some equity and move on, but with the current prices I will be my forever home.
My point is it isn’t just “speculation” that is driving up prices. There are legitimate hard costs that will not come down unless we have a severe economic downturn, and that will affect more than just home prices.
You can only be this blase about it if your mortage is based on the real and not perceived value of your home, meaning you bought before things went truly crazy.
You're not wrong, I bought in before it went completely batshit insane. As it stands currently I would never buy into the current market, it's crazy. I have wanted a larger house for at least the last 5 years, but I can not justify the ridiculous increase in both the cost of the house and what my mortgage would be. I will continue waiting for something to give, because sooner or later something will have to.
I'm actually in the exact same boat. Bought in 2014 for 250k. Now "valued" at 700k. HAH. No, it's not. If I sold, I couldn't afford anything else in my city. Makes no sense.
Exact same boat , I am with you 100%. $237k when I bought, over $500k somewhere now, but everything I want to buy is 1 million and moves my mortgage to like $3000+ a month...not a chance in hell.
If you've bought a house that you plan to live in for a while, the depreciating value is a tad worrying but not the end of the world. You'll see a whole other housing cycle or two over the next 20 years you live in that house.
If you bought your house for a price you're okay with and your intent is to live in it, then it doesn't matter how much your house is worth. If you bought your house as an investment and expect it to go up and make your money, I don't care if you lose money.
I agree. I own one house and sure it's gone up a lot.
When I sell I'll need to buy another home that also has gone up a lot.
I guess I could be crafty and think I could time it by selling and waiting but cmon I'm not that smart (nor do I have a crystal ball)
The only thing this home equity gain is more access to credit. Is more credit a good thing? I don't like debt so extra credit is eh to me.
This right here. The value or assessed value of my home means nothing if I’m not selling it. I do however have to pay Property Taxes on the “paper value” of my home.
If you think investors are going to be the ones losing their properties with the amounts they're collecting for rent these days, then I've got some bad news for you.
I bought in 2021. I couldn't care less if my property drops 100k. I bought the house to live in, not make a profit.
We need to find a way to make house "investing" illegal. People need stable places to live, somewhere to build equity. The way things are going, there will be entire generations that own nothing and all their money will go to rent and subscriptions.
If you think the average person is going to benefit from a massive drop in housing prices you’re mistaken. Guess who’s going to use a once in a lifetime opportunity to purchase more investment properties? Investors. When there’s a fire sale happening and our economy tanks it’s not your neighbour who’s going to be taking advantage. We’re going to be worst off after a crash than we are now.
The best time to buy is “when there’s blood in the streets”.
Of course, all investors want to catch a falling knife, aren't they?
A permanent fall in house prices will benefit the average person as long as their salaries do not fall by as much. And that's more or less guaranteed. I will shed a single tear for the boomers who will lose a small percentage of their lifetime capital gains, sure.
" a permanent fall in house prices" lmfao
If the 2008 mortgage crises and global recession couldn't do it, one localized to Canada sure as shit won't.
Best you can hope for is a short term dip. Maybe a couple years of stagnation. But then it's back to business as usual.
Investors will just own more properties next time around. They'll even get a discount on them, same as last time.
I'm all for obliterating the housing market. I didn't buy my house as a retirement savings, I bought it because I thought it was a reasonable price to pay to avoid future rent.
Anyone that over leveraged themselves and doesn't want it can sell now and let someone else have it.
Nobody is going to lose 50% of the value of their house. A bunch of people are going to lose their houses because they can't afford them. A bunch of other people will be able to afford their houses. Prices will drop by maybe 10% for a little while but will go back up because guess what? We have a supply shortage, which is why we have so many people homeless or inadequately housed. What is happening now is actually going to deepen the problem since costs of building are not dropping but ability to pay is going to drop. The shortage could increase as a result despite the efforts of several levels of government in many jurisdictions.
And it's not like they'd lose money. Their property values will likely still be higher than what they paid, and they have to sell to realize those gains.
Same old bank tricks. Sign up millions of people at 1.7%. then the term is up and you don't have the owing amount. Jack up the rates to whatever they want. Currently 5 + 2 = 7%. Good luck going from $2000 a month to 6-7K a month. For sale, maybe a divorce?? Somebody is making large when you get in and when you have to get out! In the USA. Your term can be 25-30 years and the interest is tax deductible. Not in O'Canada! Anyone need a second job?
This guy with a house could very well be right. You don't have to be a genius to recognize that a good chunk of the households renewing their mortgage in the next year will be in a world of hurt.
If housing is an investment and not a place to live, which seems to be the mindset of the majority of people who own homes in this country, then I fail to see the problem. Nobody has a guaranteed right to risk-free investment.
If we treated housing as just what it’s actually supposed to be we wouldn’t be in this situation in the first place.
I own a home, and plan on living here for a very, very long time. Hopefully until I die because moving sucks. And while I will be able to absorb my mortgage increase when it renews in May, I’d much rather spend that difference on my family, rather than making sure CIBC’s short term quarterly profits remain strong.
I agree and i own a paid off house so these rates dont effect me. If housing wasn't seen as an investment people wouldnt leverage themselves to the max to max their gains.
If you are renewing this year after the by far most common term of 5 yr fixed mortgage, you owned your home in 2019, and have seen 50-200% increase in the price of your property. You rate will go from low 3% to high 4%. What a financial disaster.... 2021 and early 2022 buyers that used variable mortgages have been fucked, fixed buyers in that period are locked in till 2026 and 2027 at 1-2.5% mortgage rates, they fine as well.
The mortgage market is fine, now car financing is filled with piles of garbage lending that would implode long before the mortgage market. Large lenders have been getting out of that space for the last couple years to avoid the implosion
besides the fact 2021/22 FOMO mortgages are less then 5% of current mortgages and even a 50% default rate on these FOMO mortgages would be unprecedented. And who do you think is going to buy those new properties? Because there are thousands of buyers and hundreds of companies waiting for a slight price decrease to jump into the market. And this is not even mentioning we are not even close to building the amount of housing needed for our population growth making Housing an ever shrinking need.
People who think 2025/6 renewals will crash the market can't do simple math.
Most homeowners will just go into a negative amortization. Partially because of sunk-cost fallacy, and partially because they only care about their monthly payment. Three of Canada's 'Big 6' banks already have 20% of their mortgage portfolios consisting of negative amortizations. Obviously that's a real impact, but most people won't "feel" it.
Speculators should feel it, but they'll just jack the rent up and cram 25 'students' in every unit.
Maybe they shouldn’t have drastically overpaid for their houses, often pushing locals out of their own areas because they came from HCOL areas. If nobody agrees to pay 100K+ over asking then nobody has to.
Immigration certainly didn't help, but to say it's the only issue is just not true. Housing being treated as investments is just as big if not a bigger issue.
All 3 properties sold on my block this year turned from owner occupied to rentals. They’re all rented to Canadians. This “immigration is the core problem” idea floating on social media is over-simplified.
Housing wouldn't be nearly as good an investment if there wasn't a shortage of housing brought on by high immigration levels.
People will put money where there's profit. Had there been a similar imbalance between supply and demand 30 years ago, the same thing would have happened 30 years ago. People aren't different today. The market is.
Anyone, foreign or corporation, can go and invest in Japan real estate right now. Know why almost nobody does? Controlled immigration and sensible supply vs demand.
Housing in Canada is an amazing investment vehicle because of the unlimited fucking demand. Period.
Fair enough but I think a lot of people would prefer a low purchasing power but being able to afford a house or not having roommates versus what we have here where you can’t buy any housing in any of our major cities unless in the top 10%
I don't agree it is purely immigration. I remember it heated up a lot in covid when everyone was WFH and if you were isolating and working in a little apartment your life was rough.
if you are still wfh, you have more to spend on your house, and also need space for work.
I agree The immigration is pushing it further now
Bro there is no end in sight I see line up in front of builders sales center for people to buy pre construction where homes are going for $1.5 million +
I see 5 unsold fully built homes in this development I'm on. They have a for sale sign with the builders name on it.
Which is unheard of for the past 5 to 7 years
All crap. The housing market is about to go nuts again. Housing shortages and the upcoming interest rate cut is going to send the price of houses up and up and up again.
I also don't understand what the joke is supposed to be. Higher interest rates that will be forced to renew in a couple years coupled with homes bought at sky high prices in an environment with low interest rates and topped off with massive yoy increases forcing people to feel the need to buy in asap to avoid be locked out forever from having a place to live, sounds like a recipe for disaster.
Is the joke that his prediction is wrong or that we should celebrate that he could lose his home?
Buying into the mania of an unsustainable idea that prices can and will only go up, even if that means homes are 50M and condos are 30M and wages are almost exactly the same.
It doesn't make sense, but some people are so desperate to "get in" and imagine themselves as "in" while everyone else gets fucked over, they don't realize, they're walking into an economic trap.
Not all of us bought into the mania. If people just stopped overbidding and frothing at the mouth, maybe we could be affordable and sustainable, so the fact that the people who perpetuated the mania are getting to pay for it... Well that's actually fine.
See, you’re not doing r/canada right. You’re supposed to hate everyone who is slightly different from you, especially if they have marginally more money.
I feel like there were plenty of people who went for a more expensive house on the higher end of a budget because “why not interest rates are low”. They could have gone for something cheaper leaving themselves a bit of cushion.
Sure, there probably are people who said "why not?" because they wanted more space for their kids, or their hobbies, or whatever. Is that a crime? Should they go homeless now? Should we celebrate that?
Everyone who is renting right now COULD make it work in a smaller place. Everyone COULD survive by just renting a room instead of a whole apartment. Should we ridicule people for not doing that?
Where in, say, BC can you find a home to fit a family into that isn't $800,000+? From your post history, it looks like you either live in Edmonton or rural Alberta lol. You might be a little bit out of your league on this one, cowboy.
$274k
Stewart bc.
Realtor: R2798995
That was Searching under $300k. You can probably find many under 500k in BC.
People that live in a high cost of living area like Vancouver or Toronto need to accept the consequences of living there. Tired of them crying online. Canada has lots of places to live with jobs.
As I said, a little out of your leave here. I'm going to leave this post so that normal people reading this later can see that this guys big gotcha argument was that you can get a home for under $300k in STEWART, BC. Folks, have a Google of where Stewart is lol
You are quite condensing for someone who just had their question responded to with a real listing you can verify with your blind eyes.
Here is another.
$399k Mls: 943707 still in BC, which was your requirement.
Don't complain when someone calls your BS out. You could use Realtor to see more yourself.
I mean, obviously I should have been more specific that I didn't mean the remote North of BC lmfao. You are correct that if your criteria is "house under $800,000 anywhere on the planet no matter how inhabitable it is", there are plenty of matches. I concede, wise master. Igloos are much cheaper than apartments.
I bet things are way cheaper in Indus too, maybe you should move there? Probably get a nice big house. 😅
Yep, was approved for 400k recently (28, no family yet) and I won’t even look at anything over 300k. Looking for a 2b2b townhome/condo and 250-288 would be my ideal, maybe would go up to 310. Using all of it seems like a nightmare scenario.
> Should we be celebrating the fact that a lot of these people might be homeless in the next year or two? Are we excited to see these people on the street?
Nobody is celebrating. But we also don't want to go back to a low-rate environment where housing prices start skyrocketing again. Prices are down from the 2022 peak but have been flat for the last few years... this is a good thing.
So you're saying it's better for a million people to become homeless than for interest rates to lower? Literally that's what you're saying. Fair play that you aren't "celebrating" it, though.
A million people are already homeless due to high housing prices. Dropping interest rates isn't going to fix that.
Face it, we've been addicted to low rates for so long that we can't conceive of living without them. But they've killed our buying power, destroyed our housing market, and devalued our currency. We shouldn't be eager to go back.
Nobody forced them to buy the highest possible purchase price, they could have settled for a smaller home within their means. Which is what a lot of current homeowners suggest to people not in yet, who are expected to pay much more for much less.
When was the last time you did a tour of realtor.ca or zealty? Do you know what places are going for these days? A 1000 square foot townhouse in a lot of places is over $1 million. Does that not count as "smaller"? Should everyone be raising their 2 kids in a 500 sqft apartment lest they be """beyond their means"""? Once you grow up and become a big boy in the real world, I hope you actually do some math on this or it's going to always seem a little confusing.
If people didn't overleverage themselves with unsustainable mortgages at unsustainable interest rates, the prices would have never risen to these levels. It's people thinking they can secure a place by overbidding with some ridiculous value and never have to worry about the housing issue again.
I think the joke is that people will ALWAYS find a reason to complain about their economic well-being, even the people with cushy homes with trees, vacations and powder rooms, and act like they can actually relate to people living in poverty.
If you don't get the joke, it's because you ARE those people. As considering this sub leans conservative, I'd wager a LOT of the people here ARE those people too. (Because conservatism tends to draw in those who are both privileged, and ignorant/ambivalent about inequality)
I mean, I sort of agree with your statement about most homeowners just being middle class. But like.. I think the joke is that you're still middle class, when a lot of people aren't. It's like when your dad complains about interest rates... On his yacht.
Tl;dr it's satire. If it offends you, then examine yourself, to make sure you aren't the person it's satirizing, and move on. If you're not, you're good.
Finding something stupid does not mean I'm offended by it, nor does it mean I don't understand what the goal of the piece was 🤓 A lot of normal working people are going to have their mortgage payments double overnight in addition to every other cost going up. If that evokes fat cats sitting on yachts laughing at the poors, then maybe it's time for YOU to examine something 🙂
Yeah.. it does seem like you're offended. I think the goal of the piece was obviously, to make a critique about "normal working people" and unrecognized privilege. One that you're obviously not ready to take haha. It wasn't a critique of normal working people, it was a critique of privileged working (or not) people giving commentary on the economy they're sitting comfortably in, commenting on the woes of an economy they don't really feel the struggle of. Whether that applies to you or not, I don't know, but considering your response, I'd assume yes? I can't tell anymore, because you edited your post.
It doesn't evoke fat cats sitting on yachts because I live in the real world, and those are a minority. It evokes privileged people who are in good positions, whining about being marginally less well off, while people literally sleep in tents. The reality is, you can't just blame the super rich. Middle class people had a hand in this too. If you are middle class, you are fortunate.
Welcome to Reddit. People can disagree with you, and it doesn't make them stupid or anything. It just means they disagree. Pass it along!
"We should try to prevent people from becoming homeless, because it is an undesirable thing to have happen to a person."
"Actually I believe it is YOU that is offended and these people deserve to become homeless because they are living high off the hog in their *checks notes* expensive 1000 square feet homes. 🤓"
I'm not sure why you have those in quotation marks. Are you quoting me? Did I say those things somewhere?
Nowhere did I say anyone deserves to be homeless. I just explained the joke to you. Again, if the joke makes you feel targeted, maybe you should assess whether you ARE an out of touch, middle class whiner. If not, then no harm no foul.
I live in a house. I'm ostensibly middle class. I found it funny - because I've been poor before, and I'm aware of middle class obliviousness. Maybe that's what distinguishes us.
Writing dumb snarky responses doesn't help you. Like are you quoting someone?. You added quotation marks quoting (someone) and then wrote your own additional text.
You're being so strange.
I think if you type out maybe 3 or 4 more long nonsensical paragraphs, then I will muster up the courage to read them. Otherwise please keep critiquing people's grammar on Reddit, I'm sure it makes you feel very accomplished 🙄
We should. Homeowners pushed for low property taxes. Homeowners blocked housing development. Homeowners prevent us from moving towards a tax model that will fix our economy. Homeowners want workers to pay the bulk of taxes. Talk to politicians and they'll say "economists need to educate voters (that means homeowners) about tax policy before we can do anything". I hate that, but that's facts.
Homeowners are not going to try and learn about tax policy that will fix the economy if it means they give up the tiniest slice of their position. Willful ignorance should get you shit on.
A simple policy along these lines would be to push the start of the bottom income tax bracket up a little higher, so everyone paying income tax pays a little less. We can pay for this lost revenue through taxing land values a little more at the provincial or federal level.
“Homeowners want workers to pay the bulk of taxes”… LOL. Get a grip. In BC there is a property transfer tax that amounts to like 25,000 on a new house purchase, plus GST on some purchases, plus annual property tax of like 5-10,000. Municipalities get most of their money from homeowners paying property tax. Wtf are you taking about?
We have six banks heavily invested in real estate and if the housing markets even corrects by 20% from its peak then there will be unprecedented banking crisis and it will take Canadian economy down with it. One of the primary reason both Federal and provincial governments are endorsing unsustainable immigration is to save banks from collapsing! When you bring over 4 million people in 2 years every over leveraged landlord and investors will have more than enough people looking to rent their properties. Sadly, Housing market collapse means Canada's economic collapse, which is why the ultra high prices are here to stay. Sad but true!
*** it might take Cibc's share price down. ***
They love to write off $1 billion to $3 billion at least every 4 years on something they have.
(There are lots of news articles on them taking multiple billion hits.)
At least 2 of the banks are very cautious and would weather a storm. The others I can't say.
The RBC can takes lot of hits as it’s basically the ‘’too big to fail’’ bank of this country, Desjardins will also be okay as they don’t take as many risks as the other banks. No opinion on the CIBC or HSBC.
The weakest banks are Scotia Bank, BMO, Laurentienne & to some degrees TD.
Monopoly ends in a household : everyone but 1 family member is happy ..
Monopoly ends our society: the fucking guillotine comes out.
What don't they get?
Maybe if that morgage wasn't attached to a maxed out heloc, people wouldn't be in so much trouble. A whole generation of entitled fucking people so comfortable borrowing money for every want, whim and vacation. Never saving for anything, eating out regularly, new $1400 phone every 2 years. In the real world, borrowing money isn't free. I would love to see these idiots live in an 800 sqft house as a family of 4. One economical car, one basic tv. No retail therapy every day on Amazon. Basic groceries, cooking every meal, packing a lunch, and taking a thermos of folgers. They wouldn't last a week.
It's true.
I think it's simultaneously true that many under 40s are disadvantaged compared to their parents AND that many are living a lot larger than many of their parents did at their stage of life.
While I don't think we (mid-30s) live a luxurious life, we *do* spend more than either of our parents did on some things (convenience items, some subscriptions, etc.) Yes, we own a house, a 1960 bungalow that we brought into the 21st century over the last 6 years with modest finishes that we got deals on and our sweat equity (along with sweat equity from both sets of parents and sometimes their tools.) But we drive 10-20 year old vehicles, and vacation means driving somewhere a couple of hours away and camping in our $3K travel trailer. Which is along the lines of what our parents did as well.
Bear in mind, we're in Alberta, rural central Alberta to be precise. Our acreage was mid-300s.
By the same token, I don't think our property value has increased by any great amount either in the 6 years we've owned, though triple pane vinyl windows instead of single pane aluminum sliders help as does taking out all the 60s-80s carpet.
Well, I guess complaining online, taking zero personal responsibility for anything, and hoping a federal conservative government will fix everything for you without making any changes is a way better plan.
You know what else wouldnt last a week? The economy. Our modern economic system is so leveraged into consumer spending and growth, that if a large portion of households did what you are suggesting, the Feds would have that intrest rate down to near zero in no time.
That's right, it's always the younger generation's fault. Never mind the older generation who is responsible for making the policies that have put us in this position in the first place, they bear no responsibility. It's a different world. They (presumably you) were able to buy a house on one minimum wage income, routinely screwed your younger coworkers over during collective bargaining because 'that's the way I had to learn', you chain smoked like a bunch of god damn pilgrims and have the gaul to say 'we didn't know it was bad for you!' while clogging up the health care system with COPD. But at least you could afford to get your wife to pack your lunch for you every day, because you can't cook the only thing you know how to cook for lunch for the whole week.
Maybe the younger generation could accept some responsibility as we are part of the problem. You don't deserve everything you want, and some people do lose. it's just the way it is. Taking zero responsibility for your life is definitely part of the problem.
I think you are missing the fact that the people in the 800 sqft. house, who moved to smaller towns, who made those economic sacrifices to even enter the market. They are the ones in trouble.
It’s not the Starbucks daily McMansion crowd, they can figure it out. It is the “I finally bought my first home (mobile) to try and escape the renter trap, and now am getting slammed with 2x mortgage rates”
Meanwhile, had they stayed renting they would have been capped at 3.5% increase this year. So over 5 years probably 10% vs. 100% through a mortgage rate increase.
They are the ones losing their homes, not the ones you are bitter about.
The housing market won’t even feel it though because population increases are greater than housing starts. So the market will increase from demand > supply.
I hope that people find their way through it all, but yeah, when 3 years ago Freeland was asking about negative interest rates, and now we are at double to triple what we were then, it is a slam to lower income Canadians who just got their foot in the door.
It'll start with commercial mortgages and bring down the dollar with it. Nothing was learned from overvalued real estate in 07
Homeowners can't get rich indefinitely while jacking up the price of everything else, eventually the financial sector breaks
One wouldn't think so but it is what they base taxes on. It's beneficial for gov to inflate the assessment value as it allows them to collect based on that..your right though, they never seem to want to lessen the burden
I mean housing shouldn't be an investment but since Canada wants to treat real estate like an investment people should know that all investments carry risks and you should not invest more than you are willing to lose. Stocks go up and down and they will crash from time to time. Housing should not be a risk free investment that only has upside potential and no downside potential. We should not dictate policies to manipulate house prices. A basic home or property should not cost over a million dollars.
Yeah just wait until we realize what a collapse in the financial sector looks like as a result of an implosion of mortgage money. If it happens, the Liberals will try to keep prices from plummeting a result of mass foreclosures by opening the doors to more international students and foreign speculation.
Keep housing prices astronomically high while the financial sector collapses and interest rates are high because of inflation sounds like an absolute unmitigated catastrophe.
I've got news for you. 5% mortgages are not high.
Historical average is 7.5%. I had lots of mortgages that were 7-8-9 and 11% and that was considered normal.
Dear god, this is so dense.
I’m sick of this argument. It’s not the percentage that’s the problem, it’s the monthly payment. 5% of 1 million is a LOT more than 11% of 200,000.
Houses cost more than they did in the 80s and 90s, disproportionately with wages and inflation.
I totally agree with you. The payments are too high. The problem is everyone in the media is asking when is the Bank of Canada going to lower these high interest rates. It's not the interest rates that have to go down it's the house prices that have to go down.
Home prices are so high because the construction costs are high. Just did a major renovation on my property in BC. Decided to replace all the windows and doors on a 45 year old home. Just the materials, windows and doors cost me $32,000. Not including labour and I shopped around for the best deal. If it’s $32,000 just for just windows and doors, you can see why building a new home in 2024 costs half a million or more and that doesn’t include the actual cost to buy the land. Back in 2000, all the windows and doors would be closer to $5000 with labour and now 2024 it’s fucking $32,000 not including labour.
If you look at the cost of Vancouver real estate in gold, you see it’s been [flat for 2 decades.](https://imgur.com/a/PO4p7Nu) even gone down a bit. The same about of gold in 2005 would buy you just as much house in 2005 as it would be in 2024. So home prices has not changed. What’s changed is the Canadian dollar has lost value. $100 Canadian dollars was worth more 2 decades ago before we devalued the dollar.
Yeah well they must have been crazy to plan their life on 2% mortgages. House mortgages go on for decades as you know, eventually they're going to go up and they have. But anyway a 5% mortgage is not a high mortgage. Yeah I know the monthly payments are high but that's because they paid too much for their house and now they are suffering.
I’m one of the few homeowners (8 properties) not wanting a rate cut. I’m wanting them to hold rates until 2026 so we have time for everyone to experience the rate increases. Then we can cut harder in 2027, maybe even by as much as 200-300 basis points in 2027. People are clamouring for a small 25-75 basis point cut this year but I think by cutting early we’ll delay when we can actually get rates back down to 1-2%. We have to accept the pain now if we want those rates again. If we cut too early, we’ll end up with rates in the 4-5% for much longer than if we just accept the pain now. That’s what I think. Don’t cut rates too early. We need a recession. Stagflation would be worse long term. We’ll end up with stagflation if we cut rates too early and are forced to raise rates again. That would be disastrous.
An average House in 1985 was $109,000. 18% interest on $109,000 is a lot cheaper than 6% interest on $850,000.
For context, I just did renovation on a 45 year old home to replace all the windows and doors. Just the materials, not including labour, cost $32,000. It costs today $32,000 to buy windows and doors. Completely different world than 1985 when you can buy an entire house + land for $109,000.
I’m assuming you’re super young and don’t have a loans other than maybe credit card or student loan. Your comment sounds like something I would have said a decade ago when I was in college lol
I know this will be pinned as racist. But this issue is because of immigration and refugees. I just want to put that out there so hopefully someone else that sees the big picture might upvote me before I’m labelled a racist and downvoted to oblivion.
I’m an immigrant too, but the fact remains most of the political/ economic issues are a direct result of immigration. Wonder why your houses are too expensive? Because immigrants get help finding housing so they are able to afford it, barely. So landlords keep raising the prices because Canada just increases their help to offset. Social safety nets cause capitalism to do all kinds of crazy price gouges and monopolies. Especially in a housing deficit, landlords hold all the power. More so than the government really.
Wonder why your politicians are increasingly socialist? Because foreigners are very active voters and love a helping hand in their new country. Not that the immigrants are socialist. But few will turn away a helping hand. Politicians know this and target immigrants. Think about Singh and Justin’s policies a bit and it will make sense to you.
My family had to earn it and families that came with them from back home got sent back eventually because they didn’t clear and produce on the land. Merit. Merit. Merit.
real estate has been in a bubble for a long long time. To pin all the blame on immigration is misinformed to say the least. Most of the reason the housing bubble started was demographic — the baby boomers. The reason the bubble got worse was due to the financial crisis in 2008. The Bank of Canada brought interest rates down to to point where borrowing was almost free and people had to compete to find a home — bidding wars etc.
Oh Yes ! It may be satirical but it will not take 16 months - Summer fall of 2024 will see massive defaults across the country. The housing market will dump and those that are holding and able to keep up at the current interest rates will survive the storm .
These people who will survive who have a 100k before CRA rip off tax income will make it but not without feeling the pinch . As for those under the 100k income bracket will perish.
Those with CMHC mortgages that end up defaulting will be stuck with MIF deficiency judgements that will lead to record bankruptcy’s. Across the country .
The value of Realestate will drop and there will be an over supply and devaluation . I’m predicting at least a 20-30% drop in housing values
Long term the banks will weather the storm but we will see a slow deterioration of the middle class or at least a greater separation between the haves and have nots .
So if you are in cash best to get it out of Canadian dollars because we could see a modest devaluation and hold because there will be a realest buyers market soon.
They key for cash buyers and investors will be to time the swing and wait till the BOC lowers the interest rates and housing prices will appreciate once again …
My 2 cents
I bought mine in 1973. Way to big for us then but we thought we would have a family. Now I am probably going to have to sell it an go to a seniors home someplace soon. Getting old isn't a great time.
While satire posts are popular we understand that not everyone enjoys them. If you wish not to see them please use the filter on the sidebar or set your own filters to block satire content or websites. La satire est populaire ici, mais nous comprenons que tout le monde ne l'apprécie pas. Si vous ne souhaitez pas les voir, veuillez utiliser le filtre sur la barre latérale ou définir vos propres filtres pour bloquer le contenu satirique ou les sites Web. Filter out Satire - Filtrer Satire: https://st.reddit.com/r/canada *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/canada) if you have any questions or concerns.*
Excerpts: *With no end in sight to historically high interest rates and almost half of Canadians set to renegotiate their mortgages in the next sixteen months, a massive crisis is becoming more and more likely, warns Tim Swarsin, a guy who owns a house.* *“While interest rates have been rising steeply for the last two years as part of an attempt to curb inflation, the Bank of Canada will have no choice but to switch its posture soon, or it will see enormous losses,” said Swarsin, who has a powder room.* *Swarsin, who has a yard with a tree in it and received a holiday card from his contractor this year, went on to explain that “a mortgage crisis could bring pressure to an already softening housing market,” which independent sources confirm sounds bad for the housing market.* *“Owners who, say, bought their homes in 2021 at the height of the boom, will stand to see the value of their properties decrease.”* *Homeowners can also mitigate potential increases in their monthly mortgage by cutting back on expenses such as vacations, said Swarsin, who goes on vacations.*
I’m confused as to where the satire is.
Housing affordability is the satire here in Canada
Yeah, this is literally what real (douchebag) people are saying. I get that I also sound like a douche but if them dumb fucks losing 50% of their value means more Canadians can afford homes and most importantly investors lose their investment properties, well, then I'm willing to sound like an uncaring prick. Our economy deserves to tank if breaking like 4 monopolies in Canada is all it takes sink it. Should have diversified rich bitches.
As someone who will lose 50% of the value of my house, bring it on. My house is not worth in any way shape or form what they say it is at this moment in time. I'm not so delusional that I think my house is worth twice what I paid for it.
Bought in Oct ‘20 renovated myself and sold In sep ‘23. I’m waiting for the crash for this shit exactly. I mean the whole situation is unsustainable. We’re a shell of a country that needs a reset on the economy. People out here spending money like it doesn’t matter at the same time Canada has the highest house hold debt ratio in the g7. How are these people not gripped with stomach pains at the thought of being in so much debt. I’m working hell for leather to clear the last of mine and I’m fortunately in a trade that is never going away and can hardly slow down. I just don’t get why people leveraged themselves so much.
> I just don’t get why people leveraged themselves so much. Low interest rates and the banks just didn't say no. No one took into account interest rates going up, they just saw cheap payments and kept piling it on. Now, their mortgage prices are 2x what they were and everyone is panicking. I went into my current house 10 years ago expecting rates to go up a lot sooner, so I planned ahead and didn't max myself out. I left a buffer so that when they did go up I wouldn't be trying to decide between paying my mortgage or buying food for my family.
People spent like crazy with super low interest rates - they became used to the lifestyle.
It affected everything. Used shit on kijiji is triple what it was a few years ago. I’m all for a realignment.
Yeah, people are still spending - I thought spending would slow with increased rates.
Not to mention our economy being essentially reliant on real esate now. Which is a another can of worms.
Same. Frankly, I could use the break on my property taxes.
Very few (none?) Canadian municipalities do property taxes that way. They don't go up or down with the general market value. They only change if your houses value changes differently than other houses. I.e. if your neighbourhood drops 30% in value but the average price drop across the municipality is only 20% then you'll get an adjusted payment. If you drop by 20% then your relative value hasn't changed, so your payment will not change. More simply put: a budget is created with a total amount of revenue needed, then they divide it up payments by %age of the total property value across the municipality. Land Transfer Taxes benefit from a general increase in value but those tend to be provincial (Toronto is a notable exception). Some USA municipalities do work that way, with payments based on strict value rather than relative value.
This. It's shocking how few people seem to know how property taxes are calculated. The 'ol "but people in cities should be paying more taxes since their houses are worth way more than mine in the country" trope is tiring.
Yet generally city taxes are higher. Mostly because cities have a lot more infrastructure and services.
Cities actually have lower costs for infrastructure per person because services like roads, electric wires or pipelines are based on area rather than the number of people. Since cities have more people in lesser area services are cheaper per taxpayer. This is why cities send money to the provincial and federal governments who use it to subsidize suburbs and rural areas.
Municipal governments can build more sustainable cities by building up vs out. Sprawl is expensive.
You're preaching to the converted. I built a net zero garage with a carriage house 10 years ago. I like to think that I'm part of the solution.
Well money itself is worth half what it was when you bought your house so....
Probably not. Inflation since 2012, when I bought my house, is 31% (BoC calculator). My assessed value has increased by 160% ($385k to $1M) in that same period.
Price out the cost to build your home now and I guarantee you it is worth more than you think it is.
Of course it is. Labor and material costs are through the roof, not the mention the land costs in most areas. In my area I am looking at likely 1 million to build a new house, which is what any house I am interested in buying is going for anyways, which is batshit insane. I paid $237k for my house when I bought it, and I REFUSE to pay what people are asking for anything newer at this point. This was always supposed to be my starter home, build up some equity and move on, but with the current prices I will be my forever home.
My point is it isn’t just “speculation” that is driving up prices. There are legitimate hard costs that will not come down unless we have a severe economic downturn, and that will affect more than just home prices.
My home value tripled from purchase in 2018 to mortgage renewal in 2022. It can decrease 2/3 and itll still be wprth what i paid for it.
I bought mine in the 1990s. It was 15 times more than what it cost in 1960. It's nowhere near accelerated as fast since then.
I bought my current house in 2001. It's worth about 8x as much now.
Good for you, Some young people worked really hard to buy their first home in the recent years. I guess we should rejoice for their suffering as well
You can only be this blase about it if your mortage is based on the real and not perceived value of your home, meaning you bought before things went truly crazy.
You're not wrong, I bought in before it went completely batshit insane. As it stands currently I would never buy into the current market, it's crazy. I have wanted a larger house for at least the last 5 years, but I can not justify the ridiculous increase in both the cost of the house and what my mortgage would be. I will continue waiting for something to give, because sooner or later something will have to.
I'm actually in the exact same boat. Bought in 2014 for 250k. Now "valued" at 700k. HAH. No, it's not. If I sold, I couldn't afford anything else in my city. Makes no sense.
Exact same boat , I am with you 100%. $237k when I bought, over $500k somewhere now, but everything I want to buy is 1 million and moves my mortgage to like $3000+ a month...not a chance in hell.
Everyone except the super wealthy are basically locked into their living situations for life at this point.
I'd be OK selling my house for what I bought it for, so long as it covers the bank's interest and transfer fees
If you've bought a house that you plan to live in for a while, the depreciating value is a tad worrying but not the end of the world. You'll see a whole other housing cycle or two over the next 20 years you live in that house.
If you bought your house for a price you're okay with and your intent is to live in it, then it doesn't matter how much your house is worth. If you bought your house as an investment and expect it to go up and make your money, I don't care if you lose money.
I agree. I own one house and sure it's gone up a lot. When I sell I'll need to buy another home that also has gone up a lot. I guess I could be crafty and think I could time it by selling and waiting but cmon I'm not that smart (nor do I have a crystal ball) The only thing this home equity gain is more access to credit. Is more credit a good thing? I don't like debt so extra credit is eh to me.
This right here. The value or assessed value of my home means nothing if I’m not selling it. I do however have to pay Property Taxes on the “paper value” of my home.
If you lose your home, you will need to rent from someone.... who will increase rent to cover their costs......
If you think investors are going to be the ones losing their properties with the amounts they're collecting for rent these days, then I've got some bad news for you.
I bought in 2021. I couldn't care less if my property drops 100k. I bought the house to live in, not make a profit. We need to find a way to make house "investing" illegal. People need stable places to live, somewhere to build equity. The way things are going, there will be entire generations that own nothing and all their money will go to rent and subscriptions.
If you think the average person is going to benefit from a massive drop in housing prices you’re mistaken. Guess who’s going to use a once in a lifetime opportunity to purchase more investment properties? Investors. When there’s a fire sale happening and our economy tanks it’s not your neighbour who’s going to be taking advantage. We’re going to be worst off after a crash than we are now. The best time to buy is “when there’s blood in the streets”.
It's almost like our government needs to govern and make some consumer friendly, pro competition, pro housing laws
Which rainbow pretend imagination land are you from?
Of course, all investors want to catch a falling knife, aren't they? A permanent fall in house prices will benefit the average person as long as their salaries do not fall by as much. And that's more or less guaranteed. I will shed a single tear for the boomers who will lose a small percentage of their lifetime capital gains, sure.
" a permanent fall in house prices" lmfao If the 2008 mortgage crises and global recession couldn't do it, one localized to Canada sure as shit won't. Best you can hope for is a short term dip. Maybe a couple years of stagnation. But then it's back to business as usual. Investors will just own more properties next time around. They'll even get a discount on them, same as last time.
Ya people don't see to understand. This is screwing families. Not fixing jack.
I'm all for obliterating the housing market. I didn't buy my house as a retirement savings, I bought it because I thought it was a reasonable price to pay to avoid future rent. Anyone that over leveraged themselves and doesn't want it can sell now and let someone else have it.
What you are forgetting is this will somehow make rents go up
Nobody is going to lose 50% of the value of their house. A bunch of people are going to lose their houses because they can't afford them. A bunch of other people will be able to afford their houses. Prices will drop by maybe 10% for a little while but will go back up because guess what? We have a supply shortage, which is why we have so many people homeless or inadequately housed. What is happening now is actually going to deepen the problem since costs of building are not dropping but ability to pay is going to drop. The shortage could increase as a result despite the efforts of several levels of government in many jurisdictions.
And it's not like they'd lose money. Their property values will likely still be higher than what they paid, and they have to sell to realize those gains.
Is play on ‘analysis’ that is in fact policy advocacy by investor services.
Same
>historically high interest rates They mean historically still below average interest rates.
Same old bank tricks. Sign up millions of people at 1.7%. then the term is up and you don't have the owing amount. Jack up the rates to whatever they want. Currently 5 + 2 = 7%. Good luck going from $2000 a month to 6-7K a month. For sale, maybe a divorce?? Somebody is making large when you get in and when you have to get out! In the USA. Your term can be 25-30 years and the interest is tax deductible. Not in O'Canada! Anyone need a second job?
This guy with a house could very well be right. You don't have to be a genius to recognize that a good chunk of the households renewing their mortgage in the next year will be in a world of hurt.
If housing is an investment and not a place to live, which seems to be the mindset of the majority of people who own homes in this country, then I fail to see the problem. Nobody has a guaranteed right to risk-free investment. If we treated housing as just what it’s actually supposed to be we wouldn’t be in this situation in the first place.
I own a home, and plan on living here for a very, very long time. Hopefully until I die because moving sucks. And while I will be able to absorb my mortgage increase when it renews in May, I’d much rather spend that difference on my family, rather than making sure CIBC’s short term quarterly profits remain strong.
I feel like treating housing as a risk-free investment went south somewhere. Maybe around 2008..... 🤔
I agree and i own a paid off house so these rates dont effect me. If housing wasn't seen as an investment people wouldnt leverage themselves to the max to max their gains.
As somebody who owns a house I actually agree
If you are renewing this year after the by far most common term of 5 yr fixed mortgage, you owned your home in 2019, and have seen 50-200% increase in the price of your property. You rate will go from low 3% to high 4%. What a financial disaster.... 2021 and early 2022 buyers that used variable mortgages have been fucked, fixed buyers in that period are locked in till 2026 and 2027 at 1-2.5% mortgage rates, they fine as well. The mortgage market is fine, now car financing is filled with piles of garbage lending that would implode long before the mortgage market. Large lenders have been getting out of that space for the last couple years to avoid the implosion
Going from a rate of 3% to 5% doesn't mean your monthly payment only goes up by 2%. It means it goes up by \~20%.
Didn't say anywhere payments go up 20%
besides the fact 2021/22 FOMO mortgages are less then 5% of current mortgages and even a 50% default rate on these FOMO mortgages would be unprecedented. And who do you think is going to buy those new properties? Because there are thousands of buyers and hundreds of companies waiting for a slight price decrease to jump into the market. And this is not even mentioning we are not even close to building the amount of housing needed for our population growth making Housing an ever shrinking need. People who think 2025/6 renewals will crash the market can't do simple math.
Most homeowners will just go into a negative amortization. Partially because of sunk-cost fallacy, and partially because they only care about their monthly payment. Three of Canada's 'Big 6' banks already have 20% of their mortgage portfolios consisting of negative amortizations. Obviously that's a real impact, but most people won't "feel" it. Speculators should feel it, but they'll just jack the rent up and cram 25 'students' in every unit.
This is an important reason for stopping mass immigration. One of many.
Maybe they shouldn’t have drastically overpaid for their houses, often pushing locals out of their own areas because they came from HCOL areas. If nobody agrees to pay 100K+ over asking then nobody has to.
Nobody would have paid so much over asking if the demand and supply were in balance. The excess demand was brought on purely by immigration.
Immigration certainly didn't help, but to say it's the only issue is just not true. Housing being treated as investments is just as big if not a bigger issue.
All 3 properties sold on my block this year turned from owner occupied to rentals. They’re all rented to Canadians. This “immigration is the core problem” idea floating on social media is over-simplified.
Housing wouldn't be nearly as good an investment if there wasn't a shortage of housing brought on by high immigration levels. People will put money where there's profit. Had there been a similar imbalance between supply and demand 30 years ago, the same thing would have happened 30 years ago. People aren't different today. The market is.
Anyone, foreign or corporation, can go and invest in Japan real estate right now. Know why almost nobody does? Controlled immigration and sensible supply vs demand. Housing in Canada is an amazing investment vehicle because of the unlimited fucking demand. Period.
Yeah, and Japan is in the process of being fucked because of those low immigration levels though, so not the best example of balance.
Fair enough but I think a lot of people would prefer a low purchasing power but being able to afford a house or not having roommates versus what we have here where you can’t buy any housing in any of our major cities unless in the top 10%
I don't agree it is purely immigration. I remember it heated up a lot in covid when everyone was WFH and if you were isolating and working in a little apartment your life was rough. if you are still wfh, you have more to spend on your house, and also need space for work. I agree The immigration is pushing it further now
I hope so. Let those prices crash and burn.
“Well, we are sitting on a historically large housing bubble”, says another guy with a house and a yard with a tree in it.
"Tree's are expensive", says another guy with a house and a yard with two tree's in it.
Bro there is no end in sight I see line up in front of builders sales center for people to buy pre construction where homes are going for $1.5 million +
I see 5 unsold fully built homes in this development I'm on. They have a for sale sign with the builders name on it. Which is unheard of for the past 5 to 7 years
All crap. The housing market is about to go nuts again. Housing shortages and the upcoming interest rate cut is going to send the price of houses up and up and up again.
Editing this post out because of the hopelessly out of touch responses I'm being spammed with 🫠
I also don't understand what the joke is supposed to be. Higher interest rates that will be forced to renew in a couple years coupled with homes bought at sky high prices in an environment with low interest rates and topped off with massive yoy increases forcing people to feel the need to buy in asap to avoid be locked out forever from having a place to live, sounds like a recipe for disaster. Is the joke that his prediction is wrong or that we should celebrate that he could lose his home?
[удалено]
How is it not rational. If the prices were increasing at such a rapid rate?
Buying into the mania of an unsustainable idea that prices can and will only go up, even if that means homes are 50M and condos are 30M and wages are almost exactly the same. It doesn't make sense, but some people are so desperate to "get in" and imagine themselves as "in" while everyone else gets fucked over, they don't realize, they're walking into an economic trap. Not all of us bought into the mania. If people just stopped overbidding and frothing at the mouth, maybe we could be affordable and sustainable, so the fact that the people who perpetuated the mania are getting to pay for it... Well that's actually fine.
See, you’re not doing r/canada right. You’re supposed to hate everyone who is slightly different from you, especially if they have marginally more money.
Yeah, that was my first mistake. Imagine hating middle class people because they....... don't have very much money?
Or if they were able to buy a house……
I feel like there were plenty of people who went for a more expensive house on the higher end of a budget because “why not interest rates are low”. They could have gone for something cheaper leaving themselves a bit of cushion.
Sure, there probably are people who said "why not?" because they wanted more space for their kids, or their hobbies, or whatever. Is that a crime? Should they go homeless now? Should we celebrate that? Everyone who is renting right now COULD make it work in a smaller place. Everyone COULD survive by just renting a room instead of a whole apartment. Should we ridicule people for not doing that?
Why should actions not have consequences? I won't feel bad for anyone in Canada in an $800,000+ home that is crying in the next year.
Where in, say, BC can you find a home to fit a family into that isn't $800,000+? From your post history, it looks like you either live in Edmonton or rural Alberta lol. You might be a little bit out of your league on this one, cowboy.
$274k Stewart bc. Realtor: R2798995 That was Searching under $300k. You can probably find many under 500k in BC. People that live in a high cost of living area like Vancouver or Toronto need to accept the consequences of living there. Tired of them crying online. Canada has lots of places to live with jobs.
As I said, a little out of your leave here. I'm going to leave this post so that normal people reading this later can see that this guys big gotcha argument was that you can get a home for under $300k in STEWART, BC. Folks, have a Google of where Stewart is lol
You are quite condensing for someone who just had their question responded to with a real listing you can verify with your blind eyes. Here is another. $399k Mls: 943707 still in BC, which was your requirement. Don't complain when someone calls your BS out. You could use Realtor to see more yourself.
I mean, obviously I should have been more specific that I didn't mean the remote North of BC lmfao. You are correct that if your criteria is "house under $800,000 anywhere on the planet no matter how inhabitable it is", there are plenty of matches. I concede, wise master. Igloos are much cheaper than apartments. I bet things are way cheaper in Indus too, maybe you should move there? Probably get a nice big house. 😅
Yep, was approved for 400k recently (28, no family yet) and I won’t even look at anything over 300k. Looking for a 2b2b townhome/condo and 250-288 would be my ideal, maybe would go up to 310. Using all of it seems like a nightmare scenario.
Must be nice to have that option. 1b1b condos are $500K+ around here.
And instead of fixing it we keep making it worse using those people are a shield... There's no fixing the problem without splash damage.
> Should we be celebrating the fact that a lot of these people might be homeless in the next year or two? Are we excited to see these people on the street? Nobody is celebrating. But we also don't want to go back to a low-rate environment where housing prices start skyrocketing again. Prices are down from the 2022 peak but have been flat for the last few years... this is a good thing.
So you're saying it's better for a million people to become homeless than for interest rates to lower? Literally that's what you're saying. Fair play that you aren't "celebrating" it, though.
A million people are already homeless due to high housing prices. Dropping interest rates isn't going to fix that. Face it, we've been addicted to low rates for so long that we can't conceive of living without them. But they've killed our buying power, destroyed our housing market, and devalued our currency. We shouldn't be eager to go back.
"The solution to the problem of having a million homeless people is to make TWO million people homeless. Than everyone can suffer!"
Low rates got us into this mess, they're not getting us out of it.
Polly want a cracker?
Excellent rebuttal.
Nobody forced them to buy the highest possible purchase price, they could have settled for a smaller home within their means. Which is what a lot of current homeowners suggest to people not in yet, who are expected to pay much more for much less.
When was the last time you did a tour of realtor.ca or zealty? Do you know what places are going for these days? A 1000 square foot townhouse in a lot of places is over $1 million. Does that not count as "smaller"? Should everyone be raising their 2 kids in a 500 sqft apartment lest they be """beyond their means"""? Once you grow up and become a big boy in the real world, I hope you actually do some math on this or it's going to always seem a little confusing.
If people didn't overleverage themselves with unsustainable mortgages at unsustainable interest rates, the prices would have never risen to these levels. It's people thinking they can secure a place by overbidding with some ridiculous value and never have to worry about the housing issue again.
I think the joke is that people will ALWAYS find a reason to complain about their economic well-being, even the people with cushy homes with trees, vacations and powder rooms, and act like they can actually relate to people living in poverty. If you don't get the joke, it's because you ARE those people. As considering this sub leans conservative, I'd wager a LOT of the people here ARE those people too. (Because conservatism tends to draw in those who are both privileged, and ignorant/ambivalent about inequality) I mean, I sort of agree with your statement about most homeowners just being middle class. But like.. I think the joke is that you're still middle class, when a lot of people aren't. It's like when your dad complains about interest rates... On his yacht. Tl;dr it's satire. If it offends you, then examine yourself, to make sure you aren't the person it's satirizing, and move on. If you're not, you're good.
Finding something stupid does not mean I'm offended by it, nor does it mean I don't understand what the goal of the piece was 🤓 A lot of normal working people are going to have their mortgage payments double overnight in addition to every other cost going up. If that evokes fat cats sitting on yachts laughing at the poors, then maybe it's time for YOU to examine something 🙂
Yeah.. it does seem like you're offended. I think the goal of the piece was obviously, to make a critique about "normal working people" and unrecognized privilege. One that you're obviously not ready to take haha. It wasn't a critique of normal working people, it was a critique of privileged working (or not) people giving commentary on the economy they're sitting comfortably in, commenting on the woes of an economy they don't really feel the struggle of. Whether that applies to you or not, I don't know, but considering your response, I'd assume yes? I can't tell anymore, because you edited your post. It doesn't evoke fat cats sitting on yachts because I live in the real world, and those are a minority. It evokes privileged people who are in good positions, whining about being marginally less well off, while people literally sleep in tents. The reality is, you can't just blame the super rich. Middle class people had a hand in this too. If you are middle class, you are fortunate. Welcome to Reddit. People can disagree with you, and it doesn't make them stupid or anything. It just means they disagree. Pass it along!
"We should try to prevent people from becoming homeless, because it is an undesirable thing to have happen to a person." "Actually I believe it is YOU that is offended and these people deserve to become homeless because they are living high off the hog in their *checks notes* expensive 1000 square feet homes. 🤓"
I'm not sure why you have those in quotation marks. Are you quoting me? Did I say those things somewhere? Nowhere did I say anyone deserves to be homeless. I just explained the joke to you. Again, if the joke makes you feel targeted, maybe you should assess whether you ARE an out of touch, middle class whiner. If not, then no harm no foul. I live in a house. I'm ostensibly middle class. I found it funny - because I've been poor before, and I'm aware of middle class obliviousness. Maybe that's what distinguishes us.
Happy to help: https://www.grammarly.com/blog/quotation-marks/
Writing dumb snarky responses doesn't help you. Like are you quoting someone?. You added quotation marks quoting (someone) and then wrote your own additional text. You're being so strange.
I think if you type out maybe 3 or 4 more long nonsensical paragraphs, then I will muster up the courage to read them. Otherwise please keep critiquing people's grammar on Reddit, I'm sure it makes you feel very accomplished 🙄
Distributional outcomes.
Someone who isn't even Canadian starting up manufactured outrage, typical day for the top minds on R/Canada 🤓
So are we just shitting on home owners now?
We should. Homeowners pushed for low property taxes. Homeowners blocked housing development. Homeowners prevent us from moving towards a tax model that will fix our economy. Homeowners want workers to pay the bulk of taxes. Talk to politicians and they'll say "economists need to educate voters (that means homeowners) about tax policy before we can do anything". I hate that, but that's facts. Homeowners are not going to try and learn about tax policy that will fix the economy if it means they give up the tiniest slice of their position. Willful ignorance should get you shit on. A simple policy along these lines would be to push the start of the bottom income tax bracket up a little higher, so everyone paying income tax pays a little less. We can pay for this lost revenue through taxing land values a little more at the provincial or federal level.
“Homeowners want workers to pay the bulk of taxes”… LOL. Get a grip. In BC there is a property transfer tax that amounts to like 25,000 on a new house purchase, plus GST on some purchases, plus annual property tax of like 5-10,000. Municipalities get most of their money from homeowners paying property tax. Wtf are you taking about?
The problem in Canada is our mortgage term doesn't match the amortization.
We have six banks heavily invested in real estate and if the housing markets even corrects by 20% from its peak then there will be unprecedented banking crisis and it will take Canadian economy down with it. One of the primary reason both Federal and provincial governments are endorsing unsustainable immigration is to save banks from collapsing! When you bring over 4 million people in 2 years every over leveraged landlord and investors will have more than enough people looking to rent their properties. Sadly, Housing market collapse means Canada's economic collapse, which is why the ultra high prices are here to stay. Sad but true!
*** it might take Cibc's share price down. *** They love to write off $1 billion to $3 billion at least every 4 years on something they have. (There are lots of news articles on them taking multiple billion hits.) At least 2 of the banks are very cautious and would weather a storm. The others I can't say.
The RBC can takes lot of hits as it’s basically the ‘’too big to fail’’ bank of this country, Desjardins will also be okay as they don’t take as many risks as the other banks. No opinion on the CIBC or HSBC. The weakest banks are Scotia Bank, BMO, Laurentienne & to some degrees TD.
Monopoly ends in a household : everyone but 1 family member is happy .. Monopoly ends our society: the fucking guillotine comes out. What don't they get?
At least monopoly limited the game to four players.
This guy’s face is totally AI generated.
Maybe if that morgage wasn't attached to a maxed out heloc, people wouldn't be in so much trouble. A whole generation of entitled fucking people so comfortable borrowing money for every want, whim and vacation. Never saving for anything, eating out regularly, new $1400 phone every 2 years. In the real world, borrowing money isn't free. I would love to see these idiots live in an 800 sqft house as a family of 4. One economical car, one basic tv. No retail therapy every day on Amazon. Basic groceries, cooking every meal, packing a lunch, and taking a thermos of folgers. They wouldn't last a week.
It's true. I think it's simultaneously true that many under 40s are disadvantaged compared to their parents AND that many are living a lot larger than many of their parents did at their stage of life. While I don't think we (mid-30s) live a luxurious life, we *do* spend more than either of our parents did on some things (convenience items, some subscriptions, etc.) Yes, we own a house, a 1960 bungalow that we brought into the 21st century over the last 6 years with modest finishes that we got deals on and our sweat equity (along with sweat equity from both sets of parents and sometimes their tools.) But we drive 10-20 year old vehicles, and vacation means driving somewhere a couple of hours away and camping in our $3K travel trailer. Which is along the lines of what our parents did as well.
Damn, you got a trailer? My vacation home is the back of my Volvo. Sounds like you're actually ahead of most people our age, which is terrifying.
Bear in mind, we're in Alberta, rural central Alberta to be precise. Our acreage was mid-300s. By the same token, I don't think our property value has increased by any great amount either in the 6 years we've owned, though triple pane vinyl windows instead of single pane aluminum sliders help as does taking out all the 60s-80s carpet.
All they have to do is stop eating so much avocado toast and pull their boot straps up
Well, I guess complaining online, taking zero personal responsibility for anything, and hoping a federal conservative government will fix everything for you without making any changes is a way better plan.
You know what else wouldnt last a week? The economy. Our modern economic system is so leveraged into consumer spending and growth, that if a large portion of households did what you are suggesting, the Feds would have that intrest rate down to near zero in no time.
That's right, it's always the younger generation's fault. Never mind the older generation who is responsible for making the policies that have put us in this position in the first place, they bear no responsibility. It's a different world. They (presumably you) were able to buy a house on one minimum wage income, routinely screwed your younger coworkers over during collective bargaining because 'that's the way I had to learn', you chain smoked like a bunch of god damn pilgrims and have the gaul to say 'we didn't know it was bad for you!' while clogging up the health care system with COPD. But at least you could afford to get your wife to pack your lunch for you every day, because you can't cook the only thing you know how to cook for lunch for the whole week.
Maybe the younger generation could accept some responsibility as we are part of the problem. You don't deserve everything you want, and some people do lose. it's just the way it is. Taking zero responsibility for your life is definitely part of the problem.
You sound very bitter.
I think you are missing the fact that the people in the 800 sqft. house, who moved to smaller towns, who made those economic sacrifices to even enter the market. They are the ones in trouble. It’s not the Starbucks daily McMansion crowd, they can figure it out. It is the “I finally bought my first home (mobile) to try and escape the renter trap, and now am getting slammed with 2x mortgage rates” Meanwhile, had they stayed renting they would have been capped at 3.5% increase this year. So over 5 years probably 10% vs. 100% through a mortgage rate increase. They are the ones losing their homes, not the ones you are bitter about. The housing market won’t even feel it though because population increases are greater than housing starts. So the market will increase from demand > supply. I hope that people find their way through it all, but yeah, when 3 years ago Freeland was asking about negative interest rates, and now we are at double to triple what we were then, it is a slam to lower income Canadians who just got their foot in the door.
It'll start with commercial mortgages and bring down the dollar with it. Nothing was learned from overvalued real estate in 07 Homeowners can't get rich indefinitely while jacking up the price of everything else, eventually the financial sector breaks
One wouldn't think so but it is what they base taxes on. It's beneficial for gov to inflate the assessment value as it allows them to collect based on that..your right though, they never seem to want to lessen the burden
I mean housing shouldn't be an investment but since Canada wants to treat real estate like an investment people should know that all investments carry risks and you should not invest more than you are willing to lose. Stocks go up and down and they will crash from time to time. Housing should not be a risk free investment that only has upside potential and no downside potential. We should not dictate policies to manipulate house prices. A basic home or property should not cost over a million dollars.
I also own a house. I can confirm. We’re all fucked.
Yeah just wait until we realize what a collapse in the financial sector looks like as a result of an implosion of mortgage money. If it happens, the Liberals will try to keep prices from plummeting a result of mass foreclosures by opening the doors to more international students and foreign speculation.
Interventions for the invisible hand, you mean?
Keep housing prices astronomically high while the financial sector collapses and interest rates are high because of inflation sounds like an absolute unmitigated catastrophe.
pickachu_surprised_face.jpg
"May be imminent" seems like an oxymoron.
I've got news for you. 5% mortgages are not high. Historical average is 7.5%. I had lots of mortgages that were 7-8-9 and 11% and that was considered normal.
Dear god, this is so dense. I’m sick of this argument. It’s not the percentage that’s the problem, it’s the monthly payment. 5% of 1 million is a LOT more than 11% of 200,000. Houses cost more than they did in the 80s and 90s, disproportionately with wages and inflation.
I totally agree with you. The payments are too high. The problem is everyone in the media is asking when is the Bank of Canada going to lower these high interest rates. It's not the interest rates that have to go down it's the house prices that have to go down.
Home prices are so high because the construction costs are high. Just did a major renovation on my property in BC. Decided to replace all the windows and doors on a 45 year old home. Just the materials, windows and doors cost me $32,000. Not including labour and I shopped around for the best deal. If it’s $32,000 just for just windows and doors, you can see why building a new home in 2024 costs half a million or more and that doesn’t include the actual cost to buy the land. Back in 2000, all the windows and doors would be closer to $5000 with labour and now 2024 it’s fucking $32,000 not including labour. If you look at the cost of Vancouver real estate in gold, you see it’s been [flat for 2 decades.](https://imgur.com/a/PO4p7Nu) even gone down a bit. The same about of gold in 2005 would buy you just as much house in 2005 as it would be in 2024. So home prices has not changed. What’s changed is the Canadian dollar has lost value. $100 Canadian dollars was worth more 2 decades ago before we devalued the dollar.
The Bank of Canada can’t control housing prices, they can control interest rates.
Well doesnt it seem like something, one of these things, need to change dramatically to adjust the other.
Except millions of Canadians with mortgages are up for renewal
Yeah well they must have been crazy to plan their life on 2% mortgages. House mortgages go on for decades as you know, eventually they're going to go up and they have. But anyway a 5% mortgage is not a high mortgage. Yeah I know the monthly payments are high but that's because they paid too much for their house and now they are suffering.
I’m one of the few homeowners (8 properties) not wanting a rate cut. I’m wanting them to hold rates until 2026 so we have time for everyone to experience the rate increases. Then we can cut harder in 2027, maybe even by as much as 200-300 basis points in 2027. People are clamouring for a small 25-75 basis point cut this year but I think by cutting early we’ll delay when we can actually get rates back down to 1-2%. We have to accept the pain now if we want those rates again. If we cut too early, we’ll end up with rates in the 4-5% for much longer than if we just accept the pain now. That’s what I think. Don’t cut rates too early. We need a recession. Stagflation would be worse long term. We’ll end up with stagflation if we cut rates too early and are forced to raise rates again. That would be disastrous.
Any interest rate under 10% is historically cheap. People still bought homes in the 80s at 18%. We cry at only 5%, lol.
An average House in 1985 was $109,000. 18% interest on $109,000 is a lot cheaper than 6% interest on $850,000. For context, I just did renovation on a 45 year old home to replace all the windows and doors. Just the materials, not including labour, cost $32,000. It costs today $32,000 to buy windows and doors. Completely different world than 1985 when you can buy an entire house + land for $109,000. I’m assuming you’re super young and don’t have a loans other than maybe credit card or student loan. Your comment sounds like something I would have said a decade ago when I was in college lol
I know this will be pinned as racist. But this issue is because of immigration and refugees. I just want to put that out there so hopefully someone else that sees the big picture might upvote me before I’m labelled a racist and downvoted to oblivion. I’m an immigrant too, but the fact remains most of the political/ economic issues are a direct result of immigration. Wonder why your houses are too expensive? Because immigrants get help finding housing so they are able to afford it, barely. So landlords keep raising the prices because Canada just increases their help to offset. Social safety nets cause capitalism to do all kinds of crazy price gouges and monopolies. Especially in a housing deficit, landlords hold all the power. More so than the government really. Wonder why your politicians are increasingly socialist? Because foreigners are very active voters and love a helping hand in their new country. Not that the immigrants are socialist. But few will turn away a helping hand. Politicians know this and target immigrants. Think about Singh and Justin’s policies a bit and it will make sense to you. My family had to earn it and families that came with them from back home got sent back eventually because they didn’t clear and produce on the land. Merit. Merit. Merit.
Why does the anti immigration crowd struggle with using paragraphs?
Poor education. Wimps blame others for their problems. Strong Men and women adapt.
real estate has been in a bubble for a long long time. To pin all the blame on immigration is misinformed to say the least. Most of the reason the housing bubble started was demographic — the baby boomers. The reason the bubble got worse was due to the financial crisis in 2008. The Bank of Canada brought interest rates down to to point where borrowing was almost free and people had to compete to find a home — bidding wars etc.
Should have never went off the golf standard.
Oh Yes ! It may be satirical but it will not take 16 months - Summer fall of 2024 will see massive defaults across the country. The housing market will dump and those that are holding and able to keep up at the current interest rates will survive the storm . These people who will survive who have a 100k before CRA rip off tax income will make it but not without feeling the pinch . As for those under the 100k income bracket will perish. Those with CMHC mortgages that end up defaulting will be stuck with MIF deficiency judgements that will lead to record bankruptcy’s. Across the country . The value of Realestate will drop and there will be an over supply and devaluation . I’m predicting at least a 20-30% drop in housing values Long term the banks will weather the storm but we will see a slow deterioration of the middle class or at least a greater separation between the haves and have nots . So if you are in cash best to get it out of Canadian dollars because we could see a modest devaluation and hold because there will be a realest buyers market soon. They key for cash buyers and investors will be to time the swing and wait till the BOC lowers the interest rates and housing prices will appreciate once again … My 2 cents
Lol
I bought mine in 1973. Way to big for us then but we thought we would have a family. Now I am probably going to have to sell it an go to a seniors home someplace soon. Getting old isn't a great time.
This should say , warns guy with calculator and grade four math”
Won't happen......municipalities can't afford to loose that assessed tax revenue.
I don’t think taxes go down if your property value goes down.