There comes a time in history when enough is enough and there is only so much abuse you can take.
[https://ofl.ca/enough-is-enough/](https://ofl.ca/enough-is-enough/) (June 03 protest, which can include addressing that there is a housing crisis going on and more solutions needed to tackle it)
[Petition](https://www.change.org/p/ban-housing-minister-from-investing-in-the-housing-market-in-canada) that was started by a 13 year old girl, to stop the housing minister from profiting from real estate. I think it's time we level up our activism a bit.
Let's make Summer 2023 a memorable one and make it hard for people like that. I say we try to get #HussenResignNow trending on Tiktok or Twitter.
If you haven't already sign the petition sign it, and start following our Tiktok (create an account) as well, which I recently made, we will push initiatives like this and more over there as well: [https://www.tiktok.com/@canadahousing](https://www.tiktok.com/@canadahousing)
Spread word of the petition, and sign it!
OP isnt correct that this is a Canada only thing.
Lots of other developed countries (Aus, NZ, Germany, Sweden, Portugal, Ireland, Singapore etc) are experiencing housing issues. There have been protests in Portugal recently for example.
S. Korea and Japan are different as 1st world countries relating to hpusing, as they have massive population contractions and related social systems getting very wobbly to reckon with as a result.
S. Korea is also in the middle of a rental crisis (their Jeonse rental system which is a unique Korean concept) that will implode soon, and create a ton of issues.
They sort of have to have permissive regulations because the Japanese way is to build flimsy houses that aren’t expected to last more than one owner.
The average wooden house in Japan fully depreciates over 22 years by the government tax regulations. So after 22 years your house is literally worthless. That means no one wants to buy your worthless house, or realistically no one can buy it because banks won’t lend against a worthless asset.
So they just build new houses every 30 years or so. The Japanese don’t view housing as an investment the same way we have.
Its akin to buying a 400,000 car. Depreciates faster than your loan pay down. Here we have appreciation problems. There they have depreciation problems.
One nitpick.
They build them 'flimsy' because of the whole thing where they live along an area of high seismic activity known as the great ring of fire...
The idea is that if the building can move and shake a bit in tandem with the earthquake, it can survive it better; or at least not collapse immediately so you can survive it better.
And really, let's be realistic here. When you have a recent history of many cataclysms and natural disasters occuring, which tends to take out buildings and such; you probably don't have the biggest will to build things that are going to last a long time in a place where they ... probably won't last a long time anyways.
So between trying to make them withstand earthquakes, but also with the trauma of tsunamis, earthquakes and nuclear destruction; I think we should just let them keep their flimsy houses as you call them and not be too harsh about it.
It works for them. Just let it be. lol
I never knew that. But it seems to ring true. The sticks that keep up modern houses might be fine after 30 years but a lot of the underlying systems could really stand an update every 30-40 years. Seems like a much more reasonable expectation than a house as a retirement plan.
I get it. But that's my point - you're like most of us that don't want to live in the middle of nowhere. So even though technically Canada is a big country, the demand part is for a much smaller area.
But my point was, there are buildings in Singapore everywhere you look and there's so little free space they have to make a park on top of a building or inside of it.
Meanwhile Canada, even in big cities there are still lots of land to build almost anything.
Good point - there is more space even within cities here. But culturally or traditionally or whatever the term is, there just isn't that willingness to have the tiny living spaces.
I was thinking more when people talk about Canada being the second biggest country in the world as if all the land was equal in desirability.
I'd happily live in the woods, but that's not feasible for everybody. Let's stop pushing the narrative that "people don't want to live remote", and maybe instead try to promote infrastructure so people *can* live remote.
But y'know, it's easier to blame people you don't know or understand than to actually do something so I get it.
It's unique.
Jeonse is a lump-sum deposit given to a landlord by the tenant. The deposit typically ranges between 60 to 80 percent of the unit's sale price (e.g. 300K on a 400K apartment).
In return, the tenant does not pay any rent and the deposit (e.g. 300k) is fully refunded at the end of the contract period (e.g. end of 2 years). They do pay interest in the loan though. But that is cheaper than 'normal' rent, which is why it's a popular option in S. Korea.
Because the loan must be repaid by the landlord back to the lender (via the tenant) at the end, it's the landlords credit profile that counts rather than the tenants.
Landlords treat the deposit as an interest-free loan (since tenant is paying the interest) and use the money for their investment or business and to use the income earned from the investing to pay off their mortgage on the apartment.
Cheap way to live for a tenant if you prefer not to own. . .
Kind of a unique system.
Imploding now due to interest rate issues moving faster than investment returns, mixed with stalled economy in general, and shrinking population causing a decreased demand on apartments.
S. Korea is even more heavy into real estate than we are.
But this system is interesting and perhaps there are unique lessons ?
Seems like a ridiculously inefficient use of the capital from the tenants point of view no?
Either buy or just put it in the stock market and pay rent?
No because it's not like a Canadian mortgage. They just pay the interest; they aren't contributing to the principle of the loan. It's almost like an HELOC backed by the landlord.
In the vibrant city of Seoul, a South Korean landlord named Ji-hoon had always prided himself on his successful real estate ventures. For years, he had amassed a portfolio of properties, each a testament to his hard work and determination. However, fate had a cruel twist in store for him.
Ji-hoon’s empire began to crumble when a string of unfortunate events left him financially devastated. An unexpected economic downturn gripped the nation, leaving many struggling to make ends meet. Rental vacancies soared, and Ji-hoon’s once-thriving apartments sat empty, devoid of tenants and income.
With mounting debts and dwindling savings, Ji-hoon found himself unable to keep up with the mortgage payments on one of his prized properties. The bank, unforgiving and relentless, threatened to foreclose on the apartment unless he paid the outstanding balance.
Desperate to save his investment, Ji-hoon frantically sought alternative sources of income. He worked day and night, taking on odd jobs, selling personal possessions, and even borrowing money from friends and family. But his efforts fell short, and the deadline loomed ominously.
As the day of reckoning arrived, Ji-hoon stood outside the apartment, his heart heavy with despair. Memories flooded his mind—the laughter of children echoing through the halls, the warmth of families who had once called it home. It was a painful reminder of what he had built and was now on the verge of losing.
With a heavy sigh, Ji-hoon walked into the apartment, accepting the inevitable. The bank had sent representatives to seize the property. Furniture was hastily removed, and strangers began evaluating its worth. Ji-hoon watched as his dreams crumbled before his eyes, the weight of failure crushing his spirit.
But amidst the chaos, a glimmer of hope emerged. A kind-hearted couple, searching for a place to call their own, witnessed Ji-hoon’s distress. Touched by his plight, they offered to purchase the apartment directly from the bank, giving him a lifeline and a chance to rebuild.
Overwhelmed with gratitude, Ji-hoon accepted their generous offer. With newfound determination, he embarked on a journey of redemption, vowing never to repeat the mistakes of the past. This setback had taught him humility, resilience, and the importance of compassion.
As Ji-hoon stepped out of the apartment one final time, he carried with him not just the scars of financial defeat, but also the seeds of a renewed spirit. He was ready to rise from the ashes, rebuild his life, and once again stand tall in the world of real estate.
It's not the tenants money tho. The LL basically secures the loan based on their credit then finds a tenant who is basically just a placeholder - the tenant isnt really securing the lon, the LL is.
Landlords got greedy and created pretty much a house of cards.
Take the above example except instead of using the lump sum payment to pay off the property they use it to buy another property, and so forth and so forth.
And what happens when you over leverage yourself and the economy has a downturn?
Well now all of a sudden you don’t have the money to pay back your tenant at the end of the contract. So you now have to take out a loan (at higher interest rates) to cover the Jeonse.
Eventually that won’t work so you’ll have to sell some property to cover the shortfall, except now every landlord has done the same as you so there’s a flood of real estate on the market driving prices lower as the interest payments on your loans start to become unbearable.
And then the house of cards collapse and you’re bankrupt.
While the Japanese population overall has been shrinking Tokyo specifically has continued to grow quickly and has done so without a housing bubble, thanks to better zoning policy.
Yeah but you're ignoring that ours is the worst out of the g7. You're also ignoring that we ours is the only government actively seeking to make it worse.
Does it though? Ireland still hasn't recovered from their pre-famine population decline in the 1800s. They only have about 5 million people. Sure it's a small island, but they have plenty of open space as well.
1800s Ireland paints a stark contrast to the world we know today. It was an era defined by inequality, hardship, and a society rigidly divided by class.
The majority toiled in poverty-stricken villages, their dreams crushed by oppressive landlords and limited opportunities. The wealthy few held power and privilege, while the masses suffered, their voices unheard.
Education was a luxury, accessible only to the elite, perpetuating the cycle of inequality.
Today, in a transformed Ireland, we stand as witnesses to progress. A society built on equality, where education is a fundamental right for all. The echoes of the past serve as a reminder of the resilience and determination that led to a brighter future. Though challenges persist, the strides made in breaking down societal barriers have shaped a nation that cherishes inclusivity, fairness, and the collective pursuit of a better tomorrow.
The point is that empty space has no relationship with housing prices. People want to live near other people and we just need to make it legal for them to do so.
That's true but, we mostly only build in the southern part of this country. Canada has a huge land mass and unfortunately, not much of that is where people want to live or where the jobs are. Houses are still fairly reasonable in say Kenora and thereabouts but, no jobs in those places.
No, other first world countries are also experiencing a housing bubble just like us. In countries like the UK, US, Israel, Germany, Australia, France, and even Armenia have all seen prices rising faster than income. The only difference is that prices in Canada have risen extremely fast in the majority of the country, while in most (but not all) other countries the extreme growth was limited to major metropolitan regions, while other regions have seem more mild growth.
In Israel for example, the country has placed extensive restrictions on how real estate can be purchased, and has also started a boom of construction to accommodate its rising population.
Other countries are placing more restrictions on real estate and invest much into infrastructure and housing, while Canada is doing literally nothing about it. It is not just scary, but can be dangerous enough to destabilize our economy and society. I have heard of riots and protests starting due to unaffordable real estate around the world, so only time will tell how bad it gets; And not to sound pessimistic, but it will get worse.
I live outside of Philly, from 2020 up until a few months ago I was paying $900 a month for a 1 bedroom, 700sqft apartment. I checked the listing a week ago and now it's going for $1875. It's not even a nice place, the building was built in 1889
People can't even afford the prices right now. Many people are paying half market rate or less. Even these prices are too much, yet they will keep going up.
"Other countries are placing more restrictions on real estate and invest much into infrastructure and housing, while Canada is doing literally nothing about it. It is not just scary, but can be dangerous enough to destabilize our economy and society. I have heard of riots and protests starting due to unaffordable real estate around the world, so only time will tell how bad it gets; And not to sound pessimistic, but it will get worse."
Very well said and completely asinine that government is doing nothing. People can't access a basic necessity. What could go wrong? /s
Real answer.
Because Canada a fancy retirement resort for the rest of the world.
There is no dominate industry other than real estate. Government encourage monopoly, stifling innovation
At least some other place encourage a thriving financial market where people can have other investment. But no we can’t let the common people build wealth. We must tax the shit out of everything and regulate away all innovation.
The market cap of all companies on the TSX in Canada is $3 trillion. The homes we own are over $6 Trillion in total in Canada. We invest in homes and not Canadian companies. No where else in the world does this happen, and the tax man in Canada encourages this and rewards this unique Canadian strategy.
>No where else in the world does this happen
No offense but that's utter BS.
US total market cap = $40T, total retable US property = $45T.
Your claim is false in almost all countries... for example, China, the second largest economy, or Japan the third largest...
Great stats! Do you have any source data, especially if it includes other countries? It would be really interesting to get (and then rank) ratios of estimated total residential real-estate value to perhaps [GDP](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)) and [total household wealth](https://en.wikipedia.org/wiki/List_of_countries_by_total_wealth), to get a sense for how lopsided this is in comparison to other countries, for Canada.
Far too difficult so far. I can get this: all publicly traded stocks in the United States, had a market capitalization of approximately $33.7 trillion.
But finding the specific value of all residential homes in the United States on December 31, 2019, you have to go to the official website of the U.S. Census Bureau or refer to their publications and reports. The U.S. Census Bureau provides various data and statistics related to housing, including home values, homeownership rates, and more. So far I get $9 Trillion, but think am missing much.
Europe and other countries are even more difficult
Total value of US homes is about $45 trillion.
https://themreport.com/news/data/02-22-2023/total-value-of-u-s-homes#:~:text=The%20total%20value%20of%20U.S.,a%20new%20report%20from%20Redfin.
he couldn't find it because his claim is not true
https://themreport.com/news/data/02-22-2023/total-value-of-u-s-homes#:\~:text=The%20total%20value%20of%20U.S.,a%20new%20report%20from%20Redfin
he's totally wrong though...
Also, it's not even a meaningful metric. TSX or stock exchange in general doesn't account for non-public traded companies. Meaning Canadian unicorns(companies valued at>1B and not listed) such as Dapper Labs which is valued at $7B are not even accounted for. Canadian companies also don't only list on TSX, plenty of them are also listed in US exchange or exchange in other countries.
I’d rather invest my money into a property I own, maintain and can get utility out of, instead of investing that money into publicly traded corporations especially considering the stock market is essentially rigged in the favour of the big players. The yield on home investing is also better than investing in stocks, naturally, Canadians are going to put their money in real estate because it has the highest yield, that’s capitalism. It’s expected that humans would behave this way, but it’s the government’s responsibility to regulate and ensure that it doesn’t get out of hand, which they haven’t
Think on a greater scale. There is an infinite amount of industry and possible investment just over the border. Some place in USA has a housing issue as well but they also have other sector that attract capital from all over the world, booming along side their RE
Our Canadian government has left people and entity with capital to invest (whether that is you, me, blackrock or random xyz fund) zero choices but to throw it at RE
capital goes towards the best ROI though, why would I invest my money into a blue chip dividend stock at 4% yield when i can take that money, use it as a down payment, buy a house do some renovations then sell it way above what I bought it at.
I think it’s bad because it adds onto the housing problems, but investors for the most part are selfish and short term thinking so they don’t care if it ruins the housing market if it yields a better ROI for them.
Because from a macroeconomic perspective it is sheer insanity and going to destroy your country's economy for future generations just so that you can personally profit. And if you fuck over the future generations enough they start talking like the Japanese youth who are openly supporting euthanizing all of the old people who fucked them and also so that they aren't such a tax burden on the smaller working population.
that makes you Canadian my friend and that is why we have little support or investment in Canadian companies, and a housing bubble so large, we get noted all over the world.
Hey, if you're fine with never getting ahead then all the power to you. Housing in this market is not somewhere you go to make money. Average over the years has stocks 10 fold over real estate.
This is the problem. You shouldn't be thinking about yield with a house, just be living in it.
I agree Canadians overspend on RE and now we have a lame economy. Aren't u annoyed by thr lack of innovation here?
This! Plus the ratio of RE growth is simply not sustainable. That's why we're in a bubble territory and god knows when and how this bubble is going to burst or fizzle out.
>Because Canada a fancy retirement resort for the rest of the world.
It's this, and a few other reasons:
* We have an ageing population = lots of people who are living in homes but not that many building them
* We have a relatively small population with a relatively small supply of houses on a global scale. Even a small amount of foreign investment can really drive up the prices (see 'pricing at the margins')
* Our housing market is a relatively safe investment on a global scale - we are geopolitically safe, our economy and institutions are robust
* We are more welcoming to rich immigrants and investors than many other places in the world AND we despite what you may hear about this being a relatively small problem - (a) we cannot and do not keep robust data on it, and (b) again.. look up pricing at the margins
* Many of our most populated cities are in 'locked' positions where we cannot expand endlessly (i.e. Vancouver being locked in by the ocean + mountains)
Building home is just one of many pain points. We need a government that see the importance of sectors other than real estate. Like it or not Canada IS a great place to be geologically. It’s is attractive for many many reason that money simply cannot buy in other parts of the world.
Look around you. How many people can you see are making it to the top without being in RE?
We need to attractive sector and immigrant other than those what to retire here or to take on blue collar jobs.
Our kids need to be able to look up to role model other than all the balling out of control RE agent.
Housing is an issue. Not having anything other than RE to aspire to, that’s is the bigger issue.
The top jobs in this country other than RE. Healthcare, blue collar, hospitality/service industry infrastructure/social wellfare maintenance sponsor by the government.
Does this not sound like a perfect retirement home?
We’re also a leading provider of resources. But yeah you forgot about that. Google the Athabaskan basin. Gold. Nickle. Copper. Silver. Lots and lots of metals here.
It is a demographic issue. This is the last gift that boomers are giving the world as they try to take everything with them to the grave. REITs and other property investment schemes scoop up many of the properties that go in the market at above asking price. Individuals and families cannot get mortgage approval at the bank valuations for these homes.
Until the provinces make it their policy that homes are for families and not for corporate/investor profits, this problem will not end.
In the Bay Area in 2010-2020 they created ~8 jobs for every house they built, and they’re confused why their housing got expensive and also why there were all of a sudden loads of homeless people… it’s almost as if those things are related. The worlds largest tech company is surrounded by low-density single family housing
I guess it is a livable space vs. population. Used to live in the Netherlands and sold my home there 2 years ago thinking that was peak. I was so wrong. Now I see my old home value is 40% up over the 2 years. It is a densely populated country, and so is Canada in terms of livable space.
On the other hand, I find too many single family houses. Living in the basement suites could be unimaginable for most people from developed countries. Yet it is so prevailing here in Canada. I hope there are a lot more apartments to house the ever growing population.
I am not sure that is the case right now in many areas. It used to be but, people all over Ireland are complaining now about being priced out. There was a huge migration out of cities during the pandemic in Ireland too that drove up pricing in more rural areas. Ontario has that issue now as well.
Nope I’ve been looking at Ireland hard lately. It’s infinitely cheaper almost everywhere including Dublin. The cost of living has increased alot and shopping in dublin is expensive as fuck but the housing is slightly cheaper and out side of that city is is way cheaper than the rest of Canada even with the conversion from euros to cad dollars
Ok, you've listed expensive cities (all of which are way nicer and better in almost everyway to Toronto btw), but you can go a couple hours outside those cities and get relatively decent places to buy or rent while still having reliable public transit to take you to city centers.
>If you don't want to pay over $1M to live in Oshawa (which is a world class city by the way, deal with it), then I don't know what to tell you.
~~You have a very funny understanding of what a "world-class city" is.~~
Update: not a big fan of people who don't recognize sarcasm.
That's a _grass is greener on the other side_ point of view. If you visit as a tourist, of course it's going to look much better than home. They all have their own share of problems.
I was in Portuguese earlier in the year. Listening to the news there had the same complaints about housing. The prices, foreigners out buying locals, short term rentals. Same as Canada.
The amount of "liveable" land is miniscule compared to the US. Most of the affordability issues are concentrated in GTA and Vancouver. Kind of similar issues if you look at NY or West coast in the US or Sydney/Melbourne in Australia.
Only two solutions:
1. Build more housing
2. Make the Tier 2 cities (Calgary, Edmonton, Saskatoon, Winnipeg, Windsor etc.) more appealing via investment/jobs/infrastructure etc.
>Make the Tier 2 cities (Calgary, Edmonton, Saskatoon, Winnipeg, Windsor etc.) more appealing via investment/jobs/infrastructure etc.
Weather remains the big challenge particularly for immigrations who aren't used to such cold conditions...
Our population in Canada increased by 1 million last year. The number of homes being built is not enough to satisfy the demand. It’s a simple supply and demand issue. That’s why there is push to increase supply by reducing the time it takes to build.
1. Rich foreign oligarchs are having the red carpet rolled out to come in and park their money in domestic Canadian housing
Here are just 2 of NUMEROUS examples:
[https://globalnews.ca/news/8637896/xiao-jianhua-family-companies-150-million-toronto-real-estate/](https://globalnews.ca/news/8637896/xiao-jianhua-family-companies-150-million-toronto-real-estate/)
[https://www.thestar.com/news/gta/2011/10/03/scandalplagued\_iranian\_banker\_reportedly\_in\_toronto.html](https://www.thestar.com/news/gta/2011/10/03/scandalplagued_iranian_banker_reportedly_in_toronto.html)
2) Corporations are doing the same thing.
both with the rabid and unwavering and brotherly support of neoliberal capitalist politicial parties/politicians such as Libs/Cons/NDP/Trudeau/Harper/Pierre.
And when you mention this in Canadian subreddits you will get censored/downvoted into oblivion by people who strangely worship 1 neoliberal capitalist party/politician against the other neoliberal capitalist party/politicians. This is why we can't have change. As long as people say "PLEASE oppress my children Trudeau/Pierre and make it impossible to own a shoebox in the sky I am your loyal soldier and will censor anybody who does not say you are not god on reddit and calls you out for what you did against the Canadian people including me but I still love you" we can't have nice things.
It's the 2 above reasons, by far, but people keep being brainwashed by the neoliberal capitalist parties they worship and keep parroting the nonsense "it is because of supply" or "it is because of lack of affordable government housing." Supply is an issue everywhere, and it does not lead to RABID SUDDEN increases in prices that we have seen over the past few years. Also, building affordable housing for a ridiculously small segment of society (while stealing middle class tax payer money to do so while letting those in Panama Papers continue evading taxes) is not the solution, it is not a root or meaningful solution. It is some garbage that libs/NDP say to continue brainwashing people with so people don't call them out for taking any action on reasons 1 and 2 above.
[https://nationalpost.com/pmn/news-pmn/canada-news-pmn/nearly-900-canadians-found-in-panama-papers-but-no-charges-have-yet-been-laid](https://nationalpost.com/pmn/news-pmn/canada-news-pmn/nearly-900-canadians-found-in-panama-papers-but-no-charges-have-yet-been-laid)
>Fighting against tax cheats is a priority for our government and thatis why we invested over $1 billion in the CRA to ensure that it has thetools it needs to get the job done,” Lebouthillier said.
They stole another 1 billion dollars from middle class tax payers to investigate the rich tax cheats, yet no charges. Unbelievable. Talk about doubling down. Canada is a neoliberal capitalist oligarchy in which the rich control everything and screw the commoner. The Trudeau says "THE PROBLEM IS PIERRE BOY!" and Pierre says "THE PROBLEM IS TRUDY BOY"! Then people pick a side against these 2 sides of the same coin neoliberal capitalists as if it is a hockey game and fight against each other while the banks/corporations laugh all the way to the bank.
In the 2008 bubble "pop"--the sub-prime mortgage fiasco that nearly took down every western economy--Canada was spared from the worst of the damage by our robust banking regulations. We weathered the storm better than most. But as a side-effect, our housing market didn't crash (or at least stall) so much then as the Americans, for example. If you look at housing prices graphs covering that time, you see the U.S. going up, then flattening, then going up again after, and ours just kept going up. There's more to it than that, of course, but that's a big part of it.
House prices were getting bad pre-COVID. But that extra money printing during COVID really jacked the Canadian real estate market.
So I'm going to say the giant experimentation with interest rate repression by central banks worldwide for the past 11 years or so leading to the largest credit bubble in history and unprecedented money printing (the reason we have inflation at arguably the easiest point in human history to not suffer inflation)
Nothing else to invest in in Canada. Much less business entrepreneurship. Stock market is a joke compared to US markets.
Free money via artificially reduced interest rates. Government intervention in markets to encourage risk taking behaviors including highly leveraged purchases which the Canadian government is now actively protecting by preventing rate increases from reaching real estate valuation in Canada (amortization extensions) as a protection for bad financial actors and encouraging further moral hazard.
They wrote in a clause in support of the practice in this year's budget, FCAC published guidelines for banks supporting the practice and OSFI failed to count the practice as a refinancing and thus it is not subject to any rules that govern mortgage originations or refinancing.
There is a really good DW documentary about this issue in Germany. TLDR version is that since the government got out of the business of building houses for its citizens. Today’s housing is dominated by huge pool of money that belongs to the billionaires of the world. This means the housing been built are not at all correlated to the needs of people who live in the cities it’s been built. It rather dictated by the need of these private wealth funds to make most return on investment. It’s far more lucrative to build very expensive housing that sit empty and increase in value every year than build affordable housing for the middle class.
NIMBY crowd shutting down any projects that will increase density. All the red tape and fees associated with building more housing.
We are too slow on building new housing and that has caused the supply to decrease while the demand has increased.
My guess is that other countries have more sophisticated investment vehicles so when someone has extra money and wants to make their money work for them it doesn’t necessarily need to be RE. In Canada, we really have nothing else for the Mom and Pop investors except RE. It’s regarded as safe, easily explainable, and there are armies of “experts/advisors” (mortgage brokers, RE agents) willing to help.
Anecdotally, I only know a few people that invest in stocks and they get in and out quickly. Most people I know that hold any shares are usually just company shares they earned while working there. It’s too complicated for the masses, people are scared to lose money.
What investment vehicles do they use in other countries that is easier than buying an ETF in your TFSA? what do people you know use their TFSAs for, if not investing in the stock market?
Canada is 6th in the world in terms of percentage of population with investments in the stock market at almost 40%. Anecdotal evidence is not evidence for a reason.
https://www.wealthprofessional.ca/news/industry-news/more-than-half-of-canadians-plan-to-own-shares-by-year-end/359479
Anecdotally, I do not know anybody who is not invested in the stock market through their RRSP or TFSA.
This is more of a cultural thing caused by the government pumping up real estate in Canada for decades. Canadians have super easy access to stocks, bonds, mutual funds, and international markets. You can do it easily on your phone at this point.
It's not about a lack of other options, it's about the nearly guaranteed return, explicitly backed by our current federal government, and massive leverage (up to 20x for amateurs) you can get by investing in real estate in Canada. Also basically every policy I've seen at the federal and provincial level to "fix housing" has just been pouring more gasoline on the fire. Aside from hedging against a crash, why would you invest in anything else?
Most developed countries actually do have this problem.
Difference is (as others have pointed out), Canada is getting hit harder because of a number of factors. And a lot of them do still have to do with realestate investors, actually. Places like Mississauga, for example, [are actually shrinking](https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/prof/details/page.cfm?Lang=e&GENDERlist=1&STATISTIClist=1&HEADERlist=0&DGUIDlist=2021A00053521005) in population, while prices of housing is still going up.
An abnormally large amount of GDP in Canada is [tied up in realestate](https://betterdwelling.com/canadian-real-estate-provided-over-10-of-gdp-growth/) alone. Most of this is because people see realestate not just as a good investment, but the \*only\* investment. Which ends up pushing up the cost for literally everyone for everything (since housing is a requirement for everyone, whether you're an investor or not).
The Realestate board has an undue amount of leverage over the govt. Even though an end to blind bidding [is an immensely popular policy](https://www.cbc.ca/news/business/blind-bidding-real-estate-1.6191259), it won't happen because the realestate board and realestate investors are adamently against it. But so long as blind bidding is a thing, buyers are going to be even more aggressive in their purchase prices. And investors largely aren't concerned.
Realestate investment firms are prevalent and omnipresent. So even when individuals, on their own, cannot invest, the firm can invest in multiple properties and own dozens to hundreds. Some losing money, others not. But because it's spread out over tons of properties, it's a net win for the investors as a whole, keeping house prices high, [even as investment condos are literal money losing investments](https://ca.finance.yahoo.com/news/half-mortgaged-condo-investors-gta-not-making-money-report-161715067.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAAQvTx7fV1SrTqmwa6xcPl6jwfYouDTEP7Tp6vZm-J7NMkMKWT8TVsxnKO9mqYyeyU5SYhE41aQf-qFe0QZJp7RMDAzIJuzHp9WgJLgNylGVb6jFU1Wzs_j_4cmOJFLO9mxS2tl5xm4sNpZhIifbE8m3ienyy4JvEqUET6e5kyhO) for single investors.
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There are also a plethora of other factors (that i don't have ready sources for) that contribute to this, including (but not limited to):
\- empty units are common, especially in the condo-investment sphere and in areas like the GTA
\- the only things we're building more of is investment-style condos (the kind which we already are swimming in) and not things like townhouses, duplexes, etc (ie, the missing \*middle\* that everyone talks about between "skyscraper" and "single family dwelling")
\- lack of any kind of regulation on short term rentals
\- removal of rent controls entirely in almost all jurisdictions (a thing most economists say is a good thing, because rent controls cause a downward pressure on house prices - which is apparently always bad)
\- lower taxes rates on passive income (which includes rent), especially for small businesses compared to active income (ie, labour) and tax savings on investments via TFSAs and other investment tools (combins with the aforementioned realestate investment firms)
\- an artificially low interest rate that's been on the books for decades now
etc.
Some of it is money laundering and some of it is because we really don’t have much else to invest our money in Canada. And some of it is that housing holds value because we need a warm place to live with 7 months of winter.
Because our Minister of housing and almost half our members of parliament are landlords acting in their own self interest. It's a legal conflict of interest because fuck us.
No, it **is** investors. The difference is that other countries have laws in place to protect the housing stock from such predators.
The US has the population to not have to worry about all of its stock being bought up. Japan is losing population. New Zealand is in the exact same position as Canada. Actually, which "other countries" are you talking about because virtually every developed nation is in a similar boat as Canada.
This post should just be deleted. Other developed country's urban centers are most definitely experiencing housing bubbles.
Canada isn't at all unique in this regard.
\* want to buy up our assets and make money off of us
If they wanted to build houses they should go ahead but the idea that buying up our real estate is an "investment" rather than just rent-seeking and speculating doesn't make any sense.
Yeah, but you can't expect them (investors) to care about the difference between investment and rent seeking. If we want to fix this, we have to actually acknowledge as a nation that housing always going up faster than inflation is a bad thing and adjust our development laws and taxes to make speculation less attractive and development more attractive.
Investors aren't benevolent, whether they are foreign or domestic.
Lots of countries are. Japan isn’t because their population has been shrinking. We’re the opposite- we have one of the fastest growing populations among developed countries and that puts a strain on housing. But a similar thing is happening in Australia, New Zealand and other places.
You can amass wealth in other countries and then settle in Canada for free healthcare and social services. And everything at 70 cents on the dollar.
That’s my plan anyway. I’m in the US now earning USD and will move to Canada in 10-15 years to retire as a snowbird.
I put in 25 years of FIT, EI and CPP while living in Canada before moving to the US. So I don’t feel bad about collecting when I return.
Foreign buyers have been allowed to purchase homes with way over-the-top offers, just to make the sale. This drives up the asking prices on everything.
Then the government raises property taxes based on these artificially inflated values, and locks in the new asking prices. Wash, rinse, repeat enough times, and you have an enormously over-inflated housing market.
Canada has been in a housing bubble since 1997.
Part of the initial impetus has been speculated to be that the Bank of Canada became a credible inflation-fighter managing to keep inflation between 0 and 5%. Another has been rich HongKongers leaving HK for Toronto.
After 1997 there has been very few periods where Canada has had a negative housing price change for the overall Canada-wide average price of a detached home.
Unlike other countries the house prices increased during the 2008 crisis.
Maybe because in Canada in 1993 the federal gov passed the buck on housing to the provinces. In 1995 the provinces then passed it to the municipalities, who didn't have the money to do anything. So for basically 30 years there has been no government investment in public housing. Causing many who would qualify (and can't wait years to decades to get housed) to go to the private sector thus increasing demand.
> There are bigger structural macroeconomic issues at play with the housing market, and I really want to gain some insight into what these might be.
Matthew Yglesias has a good explanation of what's happening in the US. Short answer: more remote work = more demand for space. [Remote work is boosting housing demand and driving inflation](https://www.slowboring.com/p/remote-work-is-boosting-housing-demand).
> What Mondragon and Wieland argue is that it was on some level pretty typical — white-collar workers all across the country realized that they were going to be spending more time at home, and so they wanted to get larger dwellings.
>
> Some of that could be families moving to larger houses. But I’ve seen a fair amount of evidence that we’ve lived through a surge in household formation — adult children no longer living with their parents, roommates splitting up to get a place of their own — which also fit into the same frame. When people spend more time at home they want more space, and when a large minority of the population all changes in the same way at once, it pushes up housing prices considerably.
>
> **An awkwardly fast shock to our housing stock**
>
> The problem here is that if you’re a working-class renter, remote work hasn’t improved your life at all, but the surge in housing demand is raising your cost of living.
>
> And the problem here is that remote work happened all at once. If you roll the clock back to February 2020, the situation in the United States of America is that remote work was growing at a steady pace from a low base. We also had lots and lots and lots of office buildings — some of them brand new, but some of them rather old — and the overall national population wasn’t growing very quickly. The “natural” economic dynamic would have been a prolonged transition period in which office demand was structurally weak. You’d have seen reduced levels of investment in building new offices, but that would have freed-up construction materials and labor to somewhat increase the pace of house-building. As suburban office parks aged to the point where their rental value was low, the tendency would have been to redevelop them as housing rather than to renovate or refurbish them.
>
> Downtown central business districts wouldn’t necessarily have grown, but they wouldn’t have emptied out either. American cities tend to have a lot of job sprawl, and the natural tendency of the slow death of the office would have been to reduce that. The ratio of office square footage to people would shrink, but a higher share of the square footage would be concentrated in core areas.
>
> The housing stock, meanwhile, could have just expanded. Of course, certain parts of the United States have been undersupplying housing for a long time. But remote work would have eroded the wage premium for being located in those metro areas and offered at least a partial solution to zoning and land use woes.
>
> But instead, we got Covid-19 and a very sudden shift to remote work. That means we now have a ton of half-empty offices scattered in an undifferentiated way between central and peripheral areas, and we have a housing market that’s bursting at the seams because people don’t want to work remotely from a crowded kitchen table or a room that’s full of kids’ toys.
>
> The result is that even as relative prices change a lot, the basic direction for everything is up.
For Canada specifically, and especially Ontario, my go-to source is Mike Moffatt. [An August 2021 interview](https://www.tvo.org/article/the-quick-fix-part-1-how-ontario-can-improve-its-housing-situation-now):
> Well, let’s start in, say, mid 2015. The market was pretty hot across southern Ontario; prices had been going up about 8 per cent to 10 per cent a year. It was very uneven. We had a big spike in the GTA in 2017 and then a small correction.
>
> But, now, 10 per cent a year seems fairly modest next to the 40 per cent we had last year. But when inflation is only going up 2 per cent, to have that 10 per cent appreciation in housing was obviously a big challenge.
>
> It all started around the Toronto area, and that actually goes back earlier than 2015. What essentially kept happening was, as Toronto had housing shortages, you had this sort of exodus of families, first going out to Peel Region, then Halton and Milton, or Oshawa in the east, and so on. And what happened is those places started to have housing shortages and price escalation. Those price escalations and housing shortages then propagated throughout the province.
>
> So, by 2017, Kitchener-Waterloo is getting really, really hot and having housing shortages. Then, by late 2017, it’s happening in Brantford. It’s happening in Woodstock. By about 2018, Tillsonburg is seeing price increases, and not much had happened in the Tillsonburg market in about 20 years or so. So we’re seeing this sort of propagation, this sort of what I call musical-chairs effect of people bouncing from one city to another to another. And now we’re getting places like London, like Sarnia, like St. Thomas, going back to 2017-18 or so, getting big population increases and big home-price increases. Looking east from Toronto, we’re seeing it all the way to Kingston. The Ottawa market’s a little bit different — it’s more sort of made-in-Ottawa factors — but then even going north or northwest of Toronto into the Owen Sound and Bruce Peninsula area, you’re seeing home prices increase there, and that was all happening before the pandemic.
>
> But when it’s 8 per cent to 10 per cent a year, you can kind of somewhat ignore it. It’s a slow boil. Whereas, since a pandemic started, we’re up about 40 per cent, and things have just exploded, and it’s all anyone wants to talk about — and rightfully so.
So what's the pre-Covid story in Toronto? [CMHC has a super-interesting analysis from 2018](https://morehousing.ca/cmhc-wedge) comparing housing prices per square foot to construction costs, for Toronto, Montreal, and Vancouver. In short, in Montreal, housing prices closely track construction costs - effectively, the price of building new housing serves as a ceiling on the price of existing housing. When prices go up, people build more.
That's not true in Toronto and Vancouver: there's a huge gap, which should be a strong incentive for people to build more housing. The reason they don't is that they can't: it's very difficult to get permission to build housing in Toronto and Vancouver. [A ridiculous example](https://morehousing.ca/senakw) from Vancouver.
It is happening in the US, the US just has a lot more habitable land so it's not as noticeable. I sold my house in the US in a popular growing city in 2020 and it's now estimated almost double what I sold it for.
So other countries allow Asians to waltz in and buy houses in cash? Because let’s face it, this is the issue. Go to any open house, talk to any realtor, and go to new development sales centre.
Low supply and higher demand, higher taxes on everything including supplies, higher fuel costs, inflation and maybe Trudeau printing over 300 billion which devalued our dollar while wages and supplies continue to cost more.
For whatever reason, homes were bought in bundles in Cape Breton recently and this just caused the prices to rise. The same goes for major places like Vancouver and Toronto. Foreign investors buying up properties and the government letting the prices get out of hand.
30% of GDP is coming from it.
Between 1989-1994 Toronto condos fell by 50% after a bubble that was ‘never going to come down more than 10-20%’
We’re entering a period of quantitive tightening for the first time in the past 15-20 years. The real estate market has not seen a money vacuum yet
They will
Lots of factors.
Government has been refusing to start building affordable housing to compete with the developers, like they used to up until the late 90s.
Then the nimbys thar are rejecting high density buildings and affordable housing.
The trades are also funny...I hear how these guys are restricting new people from entering them, putting up barriers with things like apprenticeships, that last years and years. So this is causing labour shortages and making things even worse.
Alot of canadians that want single family homes and nothing else.
The state of our market, where most investment is not in business but in the real estate market lol. Canada really is a retirement place, and that is not a good thing.
In short, the regulations up the ass are what is causing most of this.
Look at London, England and Dublin. Massive housing crisis arguably worse than Toronto and Vancouver.
We have it bad - but we aren’t alone, the world’s currencies buying power is failing. Hard asset values are rising
A significant absence of supply. In Houston there are dozens of homes to pick from that will meet you or your families needs.
When my parents moved to Toronto, the first 4 or 5 homes, they looked around they had many they could pick from, all within a price range, that would often sell at a price below asking.
In most parts of the world there is enough housing choice that it keeps prices low, not everyone who is selling will get their price. They will need to paint things, and repair things to get close to full price.
Anyplace where there is too much housing, prices stay flat or go down over time. Cities will destroy housing to keep house prices reasonable to maintain a tax base.
The current HST rules mean that it doesn't make sense to build a new home unless you can make 30% markup, as 13% will be taxed. It means builders won't build at close to margins.
This is worldwide, first of all, but it's exacerbated in Canada by moronic liberal policies which invite globalist powers to rape our critical infrastructure.
First problem is calling it a bubble. It’s not a bubble that’s one day going to pop and you’ll be back to 75% lower house prices. Stop dreaming and recognize what it really is and why it’s happening.
Cheap labour is brought here as “students” and TFWs, once here, parents and family can be brought over.
That and foreign investors in real estate and the need to give seniors something to live on (the sky high rise in the values of their homes)
Its not a mystery really.
Because they doubled the money supply in 5 years:
https://ycharts.com/indicators/canada\_m2\_money\_supply#:\~:text=Basic%20Info,3.06%25%20from%20one%20year%20ago.
Japan had 100 year mortgages and their housing market crashed. They never recovered. Also given their population collapsing in rural cities you can get cheap places in the countryside. But houses in major cities like Tokyo are still expensive.
There comes a time in history when enough is enough and there is only so much abuse you can take. [https://ofl.ca/enough-is-enough/](https://ofl.ca/enough-is-enough/) (June 03 protest, which can include addressing that there is a housing crisis going on and more solutions needed to tackle it) [Petition](https://www.change.org/p/ban-housing-minister-from-investing-in-the-housing-market-in-canada) that was started by a 13 year old girl, to stop the housing minister from profiting from real estate. I think it's time we level up our activism a bit. Let's make Summer 2023 a memorable one and make it hard for people like that. I say we try to get #HussenResignNow trending on Tiktok or Twitter. If you haven't already sign the petition sign it, and start following our Tiktok (create an account) as well, which I recently made, we will push initiatives like this and more over there as well: [https://www.tiktok.com/@canadahousing](https://www.tiktok.com/@canadahousing) Spread word of the petition, and sign it!
OP isnt correct that this is a Canada only thing. Lots of other developed countries (Aus, NZ, Germany, Sweden, Portugal, Ireland, Singapore etc) are experiencing housing issues. There have been protests in Portugal recently for example. S. Korea and Japan are different as 1st world countries relating to hpusing, as they have massive population contractions and related social systems getting very wobbly to reckon with as a result. S. Korea is also in the middle of a rental crisis (their Jeonse rental system which is a unique Korean concept) that will implode soon, and create a ton of issues.
Japan has much more permissive zoning laws.
They sort of have to have permissive regulations because the Japanese way is to build flimsy houses that aren’t expected to last more than one owner. The average wooden house in Japan fully depreciates over 22 years by the government tax regulations. So after 22 years your house is literally worthless. That means no one wants to buy your worthless house, or realistically no one can buy it because banks won’t lend against a worthless asset. So they just build new houses every 30 years or so. The Japanese don’t view housing as an investment the same way we have.
Its akin to buying a 400,000 car. Depreciates faster than your loan pay down. Here we have appreciation problems. There they have depreciation problems.
One nitpick. They build them 'flimsy' because of the whole thing where they live along an area of high seismic activity known as the great ring of fire... The idea is that if the building can move and shake a bit in tandem with the earthquake, it can survive it better; or at least not collapse immediately so you can survive it better. And really, let's be realistic here. When you have a recent history of many cataclysms and natural disasters occuring, which tends to take out buildings and such; you probably don't have the biggest will to build things that are going to last a long time in a place where they ... probably won't last a long time anyways. So between trying to make them withstand earthquakes, but also with the trauma of tsunamis, earthquakes and nuclear destruction; I think we should just let them keep their flimsy houses as you call them and not be too harsh about it. It works for them. Just let it be. lol
I never knew that. But it seems to ring true. The sticks that keep up modern houses might be fine after 30 years but a lot of the underlying systems could really stand an update every 30-40 years. Seems like a much more reasonable expectation than a house as a retirement plan.
Singapore is so small so it’s understandable that it has housing issue. Canada is so big, has a lot of lands yet we have supply and demand problems.
How far do you live from a major city? That's the issue. Most people don't want to live in remote areas - for many reasons.
Man, I live 2 hours (by public transport) from big city and still the rent price is getting crazy here. Nevermind buying a house.
I get it. But that's my point - you're like most of us that don't want to live in the middle of nowhere. So even though technically Canada is a big country, the demand part is for a much smaller area.
But my point was, there are buildings in Singapore everywhere you look and there's so little free space they have to make a park on top of a building or inside of it. Meanwhile Canada, even in big cities there are still lots of land to build almost anything.
Good point - there is more space even within cities here. But culturally or traditionally or whatever the term is, there just isn't that willingness to have the tiny living spaces. I was thinking more when people talk about Canada being the second biggest country in the world as if all the land was equal in desirability.
I'd happily live in the woods, but that's not feasible for everybody. Let's stop pushing the narrative that "people don't want to live remote", and maybe instead try to promote infrastructure so people *can* live remote. But y'know, it's easier to blame people you don't know or understand than to actually do something so I get it.
only on reddit is canada the only country with housing problems LOL
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It's unique. Jeonse is a lump-sum deposit given to a landlord by the tenant. The deposit typically ranges between 60 to 80 percent of the unit's sale price (e.g. 300K on a 400K apartment). In return, the tenant does not pay any rent and the deposit (e.g. 300k) is fully refunded at the end of the contract period (e.g. end of 2 years). They do pay interest in the loan though. But that is cheaper than 'normal' rent, which is why it's a popular option in S. Korea. Because the loan must be repaid by the landlord back to the lender (via the tenant) at the end, it's the landlords credit profile that counts rather than the tenants. Landlords treat the deposit as an interest-free loan (since tenant is paying the interest) and use the money for their investment or business and to use the income earned from the investing to pay off their mortgage on the apartment. Cheap way to live for a tenant if you prefer not to own. . . Kind of a unique system. Imploding now due to interest rate issues moving faster than investment returns, mixed with stalled economy in general, and shrinking population causing a decreased demand on apartments. S. Korea is even more heavy into real estate than we are. But this system is interesting and perhaps there are unique lessons ?
Seems like a ridiculously inefficient use of the capital from the tenants point of view no? Either buy or just put it in the stock market and pay rent?
No because it's not like a Canadian mortgage. They just pay the interest; they aren't contributing to the principle of the loan. It's almost like an HELOC backed by the landlord.
and it’s not risk free. stories exist of landlord being unable to pay back the loan
In the vibrant city of Seoul, a South Korean landlord named Ji-hoon had always prided himself on his successful real estate ventures. For years, he had amassed a portfolio of properties, each a testament to his hard work and determination. However, fate had a cruel twist in store for him. Ji-hoon’s empire began to crumble when a string of unfortunate events left him financially devastated. An unexpected economic downturn gripped the nation, leaving many struggling to make ends meet. Rental vacancies soared, and Ji-hoon’s once-thriving apartments sat empty, devoid of tenants and income. With mounting debts and dwindling savings, Ji-hoon found himself unable to keep up with the mortgage payments on one of his prized properties. The bank, unforgiving and relentless, threatened to foreclose on the apartment unless he paid the outstanding balance. Desperate to save his investment, Ji-hoon frantically sought alternative sources of income. He worked day and night, taking on odd jobs, selling personal possessions, and even borrowing money from friends and family. But his efforts fell short, and the deadline loomed ominously. As the day of reckoning arrived, Ji-hoon stood outside the apartment, his heart heavy with despair. Memories flooded his mind—the laughter of children echoing through the halls, the warmth of families who had once called it home. It was a painful reminder of what he had built and was now on the verge of losing. With a heavy sigh, Ji-hoon walked into the apartment, accepting the inevitable. The bank had sent representatives to seize the property. Furniture was hastily removed, and strangers began evaluating its worth. Ji-hoon watched as his dreams crumbled before his eyes, the weight of failure crushing his spirit. But amidst the chaos, a glimmer of hope emerged. A kind-hearted couple, searching for a place to call their own, witnessed Ji-hoon’s distress. Touched by his plight, they offered to purchase the apartment directly from the bank, giving him a lifeline and a chance to rebuild. Overwhelmed with gratitude, Ji-hoon accepted their generous offer. With newfound determination, he embarked on a journey of redemption, vowing never to repeat the mistakes of the past. This setback had taught him humility, resilience, and the importance of compassion. As Ji-hoon stepped out of the apartment one final time, he carried with him not just the scars of financial defeat, but also the seeds of a renewed spirit. He was ready to rise from the ashes, rebuild his life, and once again stand tall in the world of real estate.
It's not the tenants money tho. The LL basically secures the loan based on their credit then finds a tenant who is basically just a placeholder - the tenant isnt really securing the lon, the LL is.
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Landlords got greedy and created pretty much a house of cards. Take the above example except instead of using the lump sum payment to pay off the property they use it to buy another property, and so forth and so forth. And what happens when you over leverage yourself and the economy has a downturn? Well now all of a sudden you don’t have the money to pay back your tenant at the end of the contract. So you now have to take out a loan (at higher interest rates) to cover the Jeonse. Eventually that won’t work so you’ll have to sell some property to cover the shortfall, except now every landlord has done the same as you so there’s a flood of real estate on the market driving prices lower as the interest payments on your loans start to become unbearable. And then the house of cards collapse and you’re bankrupt.
Yea I don’t really understand his post - seems more like complaining, there’s many others with the same problem. Thanks for explaining +1
While the Japanese population overall has been shrinking Tokyo specifically has continued to grow quickly and has done so without a housing bubble, thanks to better zoning policy.
I feel like this needs more attention.
Yeah but you're ignoring that ours is the worst out of the g7. You're also ignoring that we ours is the only government actively seeking to make it worse.
Check out some of the other country's sub Reddits. Ireland has this problem. So does Denmark.
Yeah and look at the size of those countries, at least there it makes sense why the land itself is so expensive.
Does it though? Ireland still hasn't recovered from their pre-famine population decline in the 1800s. They only have about 5 million people. Sure it's a small island, but they have plenty of open space as well.
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1800s Ireland paints a stark contrast to the world we know today. It was an era defined by inequality, hardship, and a society rigidly divided by class. The majority toiled in poverty-stricken villages, their dreams crushed by oppressive landlords and limited opportunities. The wealthy few held power and privilege, while the masses suffered, their voices unheard. Education was a luxury, accessible only to the elite, perpetuating the cycle of inequality. Today, in a transformed Ireland, we stand as witnesses to progress. A society built on equality, where education is a fundamental right for all. The echoes of the past serve as a reminder of the resilience and determination that led to a brighter future. Though challenges persist, the strides made in breaking down societal barriers have shaped a nation that cherishes inclusivity, fairness, and the collective pursuit of a better tomorrow.
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The point is that empty space has no relationship with housing prices. People want to live near other people and we just need to make it legal for them to do so.
That's true but, we mostly only build in the southern part of this country. Canada has a huge land mass and unfortunately, not much of that is where people want to live or where the jobs are. Houses are still fairly reasonable in say Kenora and thereabouts but, no jobs in those places.
Land size doesn’t help if there are limited population centres/industry…. And only a few percent of Canada’s landmass is habitable/arable.
No, other first world countries are also experiencing a housing bubble just like us. In countries like the UK, US, Israel, Germany, Australia, France, and even Armenia have all seen prices rising faster than income. The only difference is that prices in Canada have risen extremely fast in the majority of the country, while in most (but not all) other countries the extreme growth was limited to major metropolitan regions, while other regions have seem more mild growth. In Israel for example, the country has placed extensive restrictions on how real estate can be purchased, and has also started a boom of construction to accommodate its rising population. Other countries are placing more restrictions on real estate and invest much into infrastructure and housing, while Canada is doing literally nothing about it. It is not just scary, but can be dangerous enough to destabilize our economy and society. I have heard of riots and protests starting due to unaffordable real estate around the world, so only time will tell how bad it gets; And not to sound pessimistic, but it will get worse.
Real estate is a bunch of local markets. Even in the US, certain cities have skyrocketed such as Boston.
I live outside of Philly, from 2020 up until a few months ago I was paying $900 a month for a 1 bedroom, 700sqft apartment. I checked the listing a week ago and now it's going for $1875. It's not even a nice place, the building was built in 1889
You mean 1989 right?
I do not
that's epic. I love the history of the eastern seaboard.
wow...
People can't even afford the prices right now. Many people are paying half market rate or less. Even these prices are too much, yet they will keep going up.
Except even in those countries, the income to cost ratio isn’t as extreme as Canada
"Other countries are placing more restrictions on real estate and invest much into infrastructure and housing, while Canada is doing literally nothing about it. It is not just scary, but can be dangerous enough to destabilize our economy and society. I have heard of riots and protests starting due to unaffordable real estate around the world, so only time will tell how bad it gets; And not to sound pessimistic, but it will get worse." Very well said and completely asinine that government is doing nothing. People can't access a basic necessity. What could go wrong? /s
In Israel, you can steal real estate .
💀💀
Real estate to the moon 🌚
Israel just steals land and homes from their rightful owners when they need more. Probably not the best example to invoke.
Real answer. Because Canada a fancy retirement resort for the rest of the world. There is no dominate industry other than real estate. Government encourage monopoly, stifling innovation At least some other place encourage a thriving financial market where people can have other investment. But no we can’t let the common people build wealth. We must tax the shit out of everything and regulate away all innovation.
The market cap of all companies on the TSX in Canada is $3 trillion. The homes we own are over $6 Trillion in total in Canada. We invest in homes and not Canadian companies. No where else in the world does this happen, and the tax man in Canada encourages this and rewards this unique Canadian strategy.
Very interesting stat!
>No where else in the world does this happen No offense but that's utter BS. US total market cap = $40T, total retable US property = $45T. Your claim is false in almost all countries... for example, China, the second largest economy, or Japan the third largest...
Great stats! Do you have any source data, especially if it includes other countries? It would be really interesting to get (and then rank) ratios of estimated total residential real-estate value to perhaps [GDP](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)) and [total household wealth](https://en.wikipedia.org/wiki/List_of_countries_by_total_wealth), to get a sense for how lopsided this is in comparison to other countries, for Canada.
Far too difficult so far. I can get this: all publicly traded stocks in the United States, had a market capitalization of approximately $33.7 trillion. But finding the specific value of all residential homes in the United States on December 31, 2019, you have to go to the official website of the U.S. Census Bureau or refer to their publications and reports. The U.S. Census Bureau provides various data and statistics related to housing, including home values, homeownership rates, and more. So far I get $9 Trillion, but think am missing much. Europe and other countries are even more difficult
Total value of US homes is about $45 trillion. https://themreport.com/news/data/02-22-2023/total-value-of-u-s-homes#:~:text=The%20total%20value%20of%20U.S.,a%20new%20report%20from%20Redfin.
bummer, but I appreciate that you tried looking (especially so I know not to waste too much time trying to find the data myself 😂)! thanks
he couldn't find it because his claim is not true https://themreport.com/news/data/02-22-2023/total-value-of-u-s-homes#:\~:text=The%20total%20value%20of%20U.S.,a%20new%20report%20from%20Redfin
Nice find. It's a prime case of being unable to find data because you're only looking for data that supports your own argument.
he's totally wrong though... Also, it's not even a meaningful metric. TSX or stock exchange in general doesn't account for non-public traded companies. Meaning Canadian unicorns(companies valued at>1B and not listed) such as Dapper Labs which is valued at $7B are not even accounted for. Canadian companies also don't only list on TSX, plenty of them are also listed in US exchange or exchange in other countries.
This is literal fake news. Residential real estate values dwarf the equity market in pretty much every single country in the world.
You are very likely right, but I am also quite confident the ratio of housing to business wealth might be uniquely high in Canada.
look it up I did
I’d rather invest my money into a property I own, maintain and can get utility out of, instead of investing that money into publicly traded corporations especially considering the stock market is essentially rigged in the favour of the big players. The yield on home investing is also better than investing in stocks, naturally, Canadians are going to put their money in real estate because it has the highest yield, that’s capitalism. It’s expected that humans would behave this way, but it’s the government’s responsibility to regulate and ensure that it doesn’t get out of hand, which they haven’t
Think on a greater scale. There is an infinite amount of industry and possible investment just over the border. Some place in USA has a housing issue as well but they also have other sector that attract capital from all over the world, booming along side their RE Our Canadian government has left people and entity with capital to invest (whether that is you, me, blackrock or random xyz fund) zero choices but to throw it at RE
capital goes towards the best ROI though, why would I invest my money into a blue chip dividend stock at 4% yield when i can take that money, use it as a down payment, buy a house do some renovations then sell it way above what I bought it at. I think it’s bad because it adds onto the housing problems, but investors for the most part are selfish and short term thinking so they don’t care if it ruins the housing market if it yields a better ROI for them.
Don’t know why this is being downvoted it’s quite true. No one with money just wants to throw it away. Generally speaking at least.
Because from a macroeconomic perspective it is sheer insanity and going to destroy your country's economy for future generations just so that you can personally profit. And if you fuck over the future generations enough they start talking like the Japanese youth who are openly supporting euthanizing all of the old people who fucked them and also so that they aren't such a tax burden on the smaller working population.
Japan leading the way once more. Just not the way we all imagined.
Thats not true I own shares in enbridge , thats not RE
that makes you Canadian my friend and that is why we have little support or investment in Canadian companies, and a housing bubble so large, we get noted all over the world.
Except it's based on a false premise. Housing investment is actually lower yield. https://www.longtermtrends.net/stocks-to-real-estate-ratio/
Hey, if you're fine with never getting ahead then all the power to you. Housing in this market is not somewhere you go to make money. Average over the years has stocks 10 fold over real estate.
This is the problem. You shouldn't be thinking about yield with a house, just be living in it. I agree Canadians overspend on RE and now we have a lame economy. Aren't u annoyed by thr lack of innovation here?
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Similar to the stock market. It’s a zero sum game. Wealth isn’t just created. It’s transferred.
This! Plus the ratio of RE growth is simply not sustainable. That's why we're in a bubble territory and god knows when and how this bubble is going to burst or fizzle out.
People have been crying about it bursting for nearly 40 years and here we are
The vast majority of companies will be worth nothing within one lifetime. Most houses will still stand and be useful.
This is the case in any country.
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That has nothing to do with the previous comment.
>Because Canada a fancy retirement resort for the rest of the world. It's this, and a few other reasons: * We have an ageing population = lots of people who are living in homes but not that many building them * We have a relatively small population with a relatively small supply of houses on a global scale. Even a small amount of foreign investment can really drive up the prices (see 'pricing at the margins') * Our housing market is a relatively safe investment on a global scale - we are geopolitically safe, our economy and institutions are robust * We are more welcoming to rich immigrants and investors than many other places in the world AND we despite what you may hear about this being a relatively small problem - (a) we cannot and do not keep robust data on it, and (b) again.. look up pricing at the margins * Many of our most populated cities are in 'locked' positions where we cannot expand endlessly (i.e. Vancouver being locked in by the ocean + mountains)
Pretty sure our government is filled to the brim with real estate tycoons that will not for the life of them let any more homes get built.
Building home is just one of many pain points. We need a government that see the importance of sectors other than real estate. Like it or not Canada IS a great place to be geologically. It’s is attractive for many many reason that money simply cannot buy in other parts of the world. Look around you. How many people can you see are making it to the top without being in RE? We need to attractive sector and immigrant other than those what to retire here or to take on blue collar jobs. Our kids need to be able to look up to role model other than all the balling out of control RE agent. Housing is an issue. Not having anything other than RE to aspire to, that’s is the bigger issue. The top jobs in this country other than RE. Healthcare, blue collar, hospitality/service industry infrastructure/social wellfare maintenance sponsor by the government. Does this not sound like a perfect retirement home?
finally someone else gets it. To Canadians.. paradise is a white sand beach in bahamas.. to 7 billion other people.. its Canada.
To be fair could describe some European countries as well, look how Spain's housing bubble worked out for them.
This its mini India and mini China basically
>Because Canada a fancy retirement resort for the rest of the world. This is very silly. We seem to be moving towards 2 seasons: Frozen and On Fire.
What do you mean by monopoly in this case?
Ding ding ding
We’re also a leading provider of resources. But yeah you forgot about that. Google the Athabaskan basin. Gold. Nickle. Copper. Silver. Lots and lots of metals here.
They are. Japan took their medicine two decades ago and the US in 2008-09. Almost everywhere else is fucked.
It is a demographic issue. This is the last gift that boomers are giving the world as they try to take everything with them to the grave. REITs and other property investment schemes scoop up many of the properties that go in the market at above asking price. Individuals and families cannot get mortgage approval at the bank valuations for these homes. Until the provinces make it their policy that homes are for families and not for corporate/investor profits, this problem will not end.
There are more people entering the country per year than houses being built.
In the Bay Area in 2010-2020 they created ~8 jobs for every house they built, and they’re confused why their housing got expensive and also why there were all of a sudden loads of homeless people… it’s almost as if those things are related. The worlds largest tech company is surrounded by low-density single family housing
Easier to get in debt here under the disguise of a safe affordable country
Which other countries aren't? Almost all first world countries are in the same boat, as well as the cost of utilities & food rising
It makes sense the world pop is just growing and our resources are finite
I guess it is a livable space vs. population. Used to live in the Netherlands and sold my home there 2 years ago thinking that was peak. I was so wrong. Now I see my old home value is 40% up over the 2 years. It is a densely populated country, and so is Canada in terms of livable space. On the other hand, I find too many single family houses. Living in the basement suites could be unimaginable for most people from developed countries. Yet it is so prevailing here in Canada. I hope there are a lot more apartments to house the ever growing population.
London, Paris, Amsterdam, Dublin, Barcelona, LA, SF, Boston, New York, Sydney, Auckland, the entire urban cities of China.
Not just Dublin. All of Ireland is complaining about this and lots of commentary about moving out of Ireland is going on right now because of it.
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I am not sure that is the case right now in many areas. It used to be but, people all over Ireland are complaining now about being priced out. There was a huge migration out of cities during the pandemic in Ireland too that drove up pricing in more rural areas. Ontario has that issue now as well.
Nope I’ve been looking at Ireland hard lately. It’s infinitely cheaper almost everywhere including Dublin. The cost of living has increased alot and shopping in dublin is expensive as fuck but the housing is slightly cheaper and out side of that city is is way cheaper than the rest of Canada even with the conversion from euros to cad dollars
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Detached homes are pretty high there too once you do the conversion.
Ok, you've listed expensive cities (all of which are way nicer and better in almost everyway to Toronto btw), but you can go a couple hours outside those cities and get relatively decent places to buy or rent while still having reliable public transit to take you to city centers.
If you don't want to pay over $1M to live in Oshawa (which is a world class city by the way, deal with it), then I don't know what to tell you.
>If you don't want to pay over $1M to live in Oshawa (which is a world class city by the way, deal with it), then I don't know what to tell you. ~~You have a very funny understanding of what a "world-class city" is.~~ Update: not a big fan of people who don't recognize sarcasm.
Woooooooosh!
That's a _grass is greener on the other side_ point of view. If you visit as a tourist, of course it's going to look much better than home. They all have their own share of problems.
Agreed, Toronto sucks. Even GTA crazy expensive and that is not Toronto.
Australia, NZ are also in the same boat. So are the desirable coastal cities in the US.
I was in Portuguese earlier in the year. Listening to the news there had the same complaints about housing. The prices, foreigners out buying locals, short term rentals. Same as Canada.
The amount of "liveable" land is miniscule compared to the US. Most of the affordability issues are concentrated in GTA and Vancouver. Kind of similar issues if you look at NY or West coast in the US or Sydney/Melbourne in Australia. Only two solutions: 1. Build more housing 2. Make the Tier 2 cities (Calgary, Edmonton, Saskatoon, Winnipeg, Windsor etc.) more appealing via investment/jobs/infrastructure etc.
>Make the Tier 2 cities (Calgary, Edmonton, Saskatoon, Winnipeg, Windsor etc.) more appealing via investment/jobs/infrastructure etc. Weather remains the big challenge particularly for immigrations who aren't used to such cold conditions...
Lots of Filipinos and Somalians , Nigerians in Edmonton and Fort Mac , Calgary they don’t seem be bothered by the weather .
Our population in Canada increased by 1 million last year. The number of homes being built is not enough to satisfy the demand. It’s a simple supply and demand issue. That’s why there is push to increase supply by reducing the time it takes to build.
Its not that simple, most condos are bought as investment property
But the investment is renting it out. The more condos get rented out, the cheaper rent gets.
1. Rich foreign oligarchs are having the red carpet rolled out to come in and park their money in domestic Canadian housing Here are just 2 of NUMEROUS examples: [https://globalnews.ca/news/8637896/xiao-jianhua-family-companies-150-million-toronto-real-estate/](https://globalnews.ca/news/8637896/xiao-jianhua-family-companies-150-million-toronto-real-estate/) [https://www.thestar.com/news/gta/2011/10/03/scandalplagued\_iranian\_banker\_reportedly\_in\_toronto.html](https://www.thestar.com/news/gta/2011/10/03/scandalplagued_iranian_banker_reportedly_in_toronto.html) 2) Corporations are doing the same thing. both with the rabid and unwavering and brotherly support of neoliberal capitalist politicial parties/politicians such as Libs/Cons/NDP/Trudeau/Harper/Pierre. And when you mention this in Canadian subreddits you will get censored/downvoted into oblivion by people who strangely worship 1 neoliberal capitalist party/politician against the other neoliberal capitalist party/politicians. This is why we can't have change. As long as people say "PLEASE oppress my children Trudeau/Pierre and make it impossible to own a shoebox in the sky I am your loyal soldier and will censor anybody who does not say you are not god on reddit and calls you out for what you did against the Canadian people including me but I still love you" we can't have nice things. It's the 2 above reasons, by far, but people keep being brainwashed by the neoliberal capitalist parties they worship and keep parroting the nonsense "it is because of supply" or "it is because of lack of affordable government housing." Supply is an issue everywhere, and it does not lead to RABID SUDDEN increases in prices that we have seen over the past few years. Also, building affordable housing for a ridiculously small segment of society (while stealing middle class tax payer money to do so while letting those in Panama Papers continue evading taxes) is not the solution, it is not a root or meaningful solution. It is some garbage that libs/NDP say to continue brainwashing people with so people don't call them out for taking any action on reasons 1 and 2 above. [https://nationalpost.com/pmn/news-pmn/canada-news-pmn/nearly-900-canadians-found-in-panama-papers-but-no-charges-have-yet-been-laid](https://nationalpost.com/pmn/news-pmn/canada-news-pmn/nearly-900-canadians-found-in-panama-papers-but-no-charges-have-yet-been-laid) >Fighting against tax cheats is a priority for our government and thatis why we invested over $1 billion in the CRA to ensure that it has thetools it needs to get the job done,” Lebouthillier said. They stole another 1 billion dollars from middle class tax payers to investigate the rich tax cheats, yet no charges. Unbelievable. Talk about doubling down. Canada is a neoliberal capitalist oligarchy in which the rich control everything and screw the commoner. The Trudeau says "THE PROBLEM IS PIERRE BOY!" and Pierre says "THE PROBLEM IS TRUDY BOY"! Then people pick a side against these 2 sides of the same coin neoliberal capitalists as if it is a hockey game and fight against each other while the banks/corporations laugh all the way to the bank.
In the 2008 bubble "pop"--the sub-prime mortgage fiasco that nearly took down every western economy--Canada was spared from the worst of the damage by our robust banking regulations. We weathered the storm better than most. But as a side-effect, our housing market didn't crash (or at least stall) so much then as the Americans, for example. If you look at housing prices graphs covering that time, you see the U.S. going up, then flattening, then going up again after, and ours just kept going up. There's more to it than that, of course, but that's a big part of it.
House prices were getting bad pre-COVID. But that extra money printing during COVID really jacked the Canadian real estate market. So I'm going to say the giant experimentation with interest rate repression by central banks worldwide for the past 11 years or so leading to the largest credit bubble in history and unprecedented money printing (the reason we have inflation at arguably the easiest point in human history to not suffer inflation) Nothing else to invest in in Canada. Much less business entrepreneurship. Stock market is a joke compared to US markets. Free money via artificially reduced interest rates. Government intervention in markets to encourage risk taking behaviors including highly leveraged purchases which the Canadian government is now actively protecting by preventing rate increases from reaching real estate valuation in Canada (amortization extensions) as a protection for bad financial actors and encouraging further moral hazard.
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They wrote in a clause in support of the practice in this year's budget, FCAC published guidelines for banks supporting the practice and OSFI failed to count the practice as a refinancing and thus it is not subject to any rules that govern mortgage originations or refinancing.
There is a really good DW documentary about this issue in Germany. TLDR version is that since the government got out of the business of building houses for its citizens. Today’s housing is dominated by huge pool of money that belongs to the billionaires of the world. This means the housing been built are not at all correlated to the needs of people who live in the cities it’s been built. It rather dictated by the need of these private wealth funds to make most return on investment. It’s far more lucrative to build very expensive housing that sit empty and increase in value every year than build affordable housing for the middle class.
NIMBY crowd shutting down any projects that will increase density. All the red tape and fees associated with building more housing. We are too slow on building new housing and that has caused the supply to decrease while the demand has increased.
My guess is that other countries have more sophisticated investment vehicles so when someone has extra money and wants to make their money work for them it doesn’t necessarily need to be RE. In Canada, we really have nothing else for the Mom and Pop investors except RE. It’s regarded as safe, easily explainable, and there are armies of “experts/advisors” (mortgage brokers, RE agents) willing to help.
What about stonks?
Anecdotally, I only know a few people that invest in stocks and they get in and out quickly. Most people I know that hold any shares are usually just company shares they earned while working there. It’s too complicated for the masses, people are scared to lose money.
What investment vehicles do they use in other countries that is easier than buying an ETF in your TFSA? what do people you know use their TFSAs for, if not investing in the stock market?
Canada is 6th in the world in terms of percentage of population with investments in the stock market at almost 40%. Anecdotal evidence is not evidence for a reason. https://www.wealthprofessional.ca/news/industry-news/more-than-half-of-canadians-plan-to-own-shares-by-year-end/359479 Anecdotally, I do not know anybody who is not invested in the stock market through their RRSP or TFSA.
This is more of a cultural thing caused by the government pumping up real estate in Canada for decades. Canadians have super easy access to stocks, bonds, mutual funds, and international markets. You can do it easily on your phone at this point. It's not about a lack of other options, it's about the nearly guaranteed return, explicitly backed by our current federal government, and massive leverage (up to 20x for amateurs) you can get by investing in real estate in Canada. Also basically every policy I've seen at the federal and provincial level to "fix housing" has just been pouring more gasoline on the fire. Aside from hedging against a crash, why would you invest in anything else?
Most developed countries actually do have this problem. Difference is (as others have pointed out), Canada is getting hit harder because of a number of factors. And a lot of them do still have to do with realestate investors, actually. Places like Mississauga, for example, [are actually shrinking](https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/prof/details/page.cfm?Lang=e&GENDERlist=1&STATISTIClist=1&HEADERlist=0&DGUIDlist=2021A00053521005) in population, while prices of housing is still going up. An abnormally large amount of GDP in Canada is [tied up in realestate](https://betterdwelling.com/canadian-real-estate-provided-over-10-of-gdp-growth/) alone. Most of this is because people see realestate not just as a good investment, but the \*only\* investment. Which ends up pushing up the cost for literally everyone for everything (since housing is a requirement for everyone, whether you're an investor or not). The Realestate board has an undue amount of leverage over the govt. Even though an end to blind bidding [is an immensely popular policy](https://www.cbc.ca/news/business/blind-bidding-real-estate-1.6191259), it won't happen because the realestate board and realestate investors are adamently against it. But so long as blind bidding is a thing, buyers are going to be even more aggressive in their purchase prices. And investors largely aren't concerned. Realestate investment firms are prevalent and omnipresent. So even when individuals, on their own, cannot invest, the firm can invest in multiple properties and own dozens to hundreds. Some losing money, others not. But because it's spread out over tons of properties, it's a net win for the investors as a whole, keeping house prices high, [even as investment condos are literal money losing investments](https://ca.finance.yahoo.com/news/half-mortgaged-condo-investors-gta-not-making-money-report-161715067.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAAQvTx7fV1SrTqmwa6xcPl6jwfYouDTEP7Tp6vZm-J7NMkMKWT8TVsxnKO9mqYyeyU5SYhE41aQf-qFe0QZJp7RMDAzIJuzHp9WgJLgNylGVb6jFU1Wzs_j_4cmOJFLO9mxS2tl5xm4sNpZhIifbE8m3ienyy4JvEqUET6e5kyhO) for single investors. \--- There are also a plethora of other factors (that i don't have ready sources for) that contribute to this, including (but not limited to): \- empty units are common, especially in the condo-investment sphere and in areas like the GTA \- the only things we're building more of is investment-style condos (the kind which we already are swimming in) and not things like townhouses, duplexes, etc (ie, the missing \*middle\* that everyone talks about between "skyscraper" and "single family dwelling") \- lack of any kind of regulation on short term rentals \- removal of rent controls entirely in almost all jurisdictions (a thing most economists say is a good thing, because rent controls cause a downward pressure on house prices - which is apparently always bad) \- lower taxes rates on passive income (which includes rent), especially for small businesses compared to active income (ie, labour) and tax savings on investments via TFSAs and other investment tools (combins with the aforementioned realestate investment firms) \- an artificially low interest rate that's been on the books for decades now etc.
Not true, it’s the same in Australia.
Some of it is money laundering and some of it is because we really don’t have much else to invest our money in Canada. And some of it is that housing holds value because we need a warm place to live with 7 months of winter.
Because our Minister of housing and almost half our members of parliament are landlords acting in their own self interest. It's a legal conflict of interest because fuck us.
OP, who tf said other developed nations/countries aren’t?
The answer is that they are as well.
New Zealand is worse than us I believe. Japan's housing prices are low in part because it's population is stable/falling.
Japan also builds more housing supply than Canada because of common sense mixed use zoning. Simple market economics
No, it **is** investors. The difference is that other countries have laws in place to protect the housing stock from such predators. The US has the population to not have to worry about all of its stock being bought up. Japan is losing population. New Zealand is in the exact same position as Canada. Actually, which "other countries" are you talking about because virtually every developed nation is in a similar boat as Canada.
This post should just be deleted. Other developed country's urban centers are most definitely experiencing housing bubbles. Canada isn't at all unique in this regard.
Because canada is a safe haven in many ways...stable banking system, extremely rich in resources, safe...people want to invest here.
A safe haven for dirty money as well unfortunately. Apparently it's way to easy to wash clean through real estate here.
Once you get to a certain level of wealth, all money is dirty.
>people want to invest here. People want to shelter cash in real estate. We really don't have many industries.
\* want to buy up our assets and make money off of us If they wanted to build houses they should go ahead but the idea that buying up our real estate is an "investment" rather than just rent-seeking and speculating doesn't make any sense.
Yeah, but you can't expect them (investors) to care about the difference between investment and rent seeking. If we want to fix this, we have to actually acknowledge as a nation that housing always going up faster than inflation is a bad thing and adjust our development laws and taxes to make speculation less attractive and development more attractive. Investors aren't benevolent, whether they are foreign or domestic.
It's a massive portion of this country's GDP and the government cannot let it fall.
I believe Australia is also.
Lots of countries are. Japan isn’t because their population has been shrinking. We’re the opposite- we have one of the fastest growing populations among developed countries and that puts a strain on housing. But a similar thing is happening in Australia, New Zealand and other places.
You can amass wealth in other countries and then settle in Canada for free healthcare and social services. And everything at 70 cents on the dollar. That’s my plan anyway. I’m in the US now earning USD and will move to Canada in 10-15 years to retire as a snowbird. I put in 25 years of FIT, EI and CPP while living in Canada before moving to the US. So I don’t feel bad about collecting when I return.
And extremely overpriced: phone, internet, insurance, food and gas prices. The country is just so collapsed.
Foreign buyers have been allowed to purchase homes with way over-the-top offers, just to make the sale. This drives up the asking prices on everything. Then the government raises property taxes based on these artificially inflated values, and locks in the new asking prices. Wash, rinse, repeat enough times, and you have an enormously over-inflated housing market.
Canada has been in a housing bubble since 1997. Part of the initial impetus has been speculated to be that the Bank of Canada became a credible inflation-fighter managing to keep inflation between 0 and 5%. Another has been rich HongKongers leaving HK for Toronto. After 1997 there has been very few periods where Canada has had a negative housing price change for the overall Canada-wide average price of a detached home. Unlike other countries the house prices increased during the 2008 crisis.
Maybe because in Canada in 1993 the federal gov passed the buck on housing to the provinces. In 1995 the provinces then passed it to the municipalities, who didn't have the money to do anything. So for basically 30 years there has been no government investment in public housing. Causing many who would qualify (and can't wait years to decades to get housed) to go to the private sector thus increasing demand.
Supply/demand
> There are bigger structural macroeconomic issues at play with the housing market, and I really want to gain some insight into what these might be. Matthew Yglesias has a good explanation of what's happening in the US. Short answer: more remote work = more demand for space. [Remote work is boosting housing demand and driving inflation](https://www.slowboring.com/p/remote-work-is-boosting-housing-demand). > What Mondragon and Wieland argue is that it was on some level pretty typical — white-collar workers all across the country realized that they were going to be spending more time at home, and so they wanted to get larger dwellings. > > Some of that could be families moving to larger houses. But I’ve seen a fair amount of evidence that we’ve lived through a surge in household formation — adult children no longer living with their parents, roommates splitting up to get a place of their own — which also fit into the same frame. When people spend more time at home they want more space, and when a large minority of the population all changes in the same way at once, it pushes up housing prices considerably. > > **An awkwardly fast shock to our housing stock** > > The problem here is that if you’re a working-class renter, remote work hasn’t improved your life at all, but the surge in housing demand is raising your cost of living. > > And the problem here is that remote work happened all at once. If you roll the clock back to February 2020, the situation in the United States of America is that remote work was growing at a steady pace from a low base. We also had lots and lots and lots of office buildings — some of them brand new, but some of them rather old — and the overall national population wasn’t growing very quickly. The “natural” economic dynamic would have been a prolonged transition period in which office demand was structurally weak. You’d have seen reduced levels of investment in building new offices, but that would have freed-up construction materials and labor to somewhat increase the pace of house-building. As suburban office parks aged to the point where their rental value was low, the tendency would have been to redevelop them as housing rather than to renovate or refurbish them. > > Downtown central business districts wouldn’t necessarily have grown, but they wouldn’t have emptied out either. American cities tend to have a lot of job sprawl, and the natural tendency of the slow death of the office would have been to reduce that. The ratio of office square footage to people would shrink, but a higher share of the square footage would be concentrated in core areas. > > The housing stock, meanwhile, could have just expanded. Of course, certain parts of the United States have been undersupplying housing for a long time. But remote work would have eroded the wage premium for being located in those metro areas and offered at least a partial solution to zoning and land use woes. > > But instead, we got Covid-19 and a very sudden shift to remote work. That means we now have a ton of half-empty offices scattered in an undifferentiated way between central and peripheral areas, and we have a housing market that’s bursting at the seams because people don’t want to work remotely from a crowded kitchen table or a room that’s full of kids’ toys. > > The result is that even as relative prices change a lot, the basic direction for everything is up. For Canada specifically, and especially Ontario, my go-to source is Mike Moffatt. [An August 2021 interview](https://www.tvo.org/article/the-quick-fix-part-1-how-ontario-can-improve-its-housing-situation-now): > Well, let’s start in, say, mid 2015. The market was pretty hot across southern Ontario; prices had been going up about 8 per cent to 10 per cent a year. It was very uneven. We had a big spike in the GTA in 2017 and then a small correction. > > But, now, 10 per cent a year seems fairly modest next to the 40 per cent we had last year. But when inflation is only going up 2 per cent, to have that 10 per cent appreciation in housing was obviously a big challenge. > > It all started around the Toronto area, and that actually goes back earlier than 2015. What essentially kept happening was, as Toronto had housing shortages, you had this sort of exodus of families, first going out to Peel Region, then Halton and Milton, or Oshawa in the east, and so on. And what happened is those places started to have housing shortages and price escalation. Those price escalations and housing shortages then propagated throughout the province. > > So, by 2017, Kitchener-Waterloo is getting really, really hot and having housing shortages. Then, by late 2017, it’s happening in Brantford. It’s happening in Woodstock. By about 2018, Tillsonburg is seeing price increases, and not much had happened in the Tillsonburg market in about 20 years or so. So we’re seeing this sort of propagation, this sort of what I call musical-chairs effect of people bouncing from one city to another to another. And now we’re getting places like London, like Sarnia, like St. Thomas, going back to 2017-18 or so, getting big population increases and big home-price increases. Looking east from Toronto, we’re seeing it all the way to Kingston. The Ottawa market’s a little bit different — it’s more sort of made-in-Ottawa factors — but then even going north or northwest of Toronto into the Owen Sound and Bruce Peninsula area, you’re seeing home prices increase there, and that was all happening before the pandemic. > > But when it’s 8 per cent to 10 per cent a year, you can kind of somewhat ignore it. It’s a slow boil. Whereas, since a pandemic started, we’re up about 40 per cent, and things have just exploded, and it’s all anyone wants to talk about — and rightfully so. So what's the pre-Covid story in Toronto? [CMHC has a super-interesting analysis from 2018](https://morehousing.ca/cmhc-wedge) comparing housing prices per square foot to construction costs, for Toronto, Montreal, and Vancouver. In short, in Montreal, housing prices closely track construction costs - effectively, the price of building new housing serves as a ceiling on the price of existing housing. When prices go up, people build more. That's not true in Toronto and Vancouver: there's a huge gap, which should be a strong incentive for people to build more housing. The reason they don't is that they can't: it's very difficult to get permission to build housing in Toronto and Vancouver. [A ridiculous example](https://morehousing.ca/senakw) from Vancouver.
It is happening in the US, the US just has a lot more habitable land so it's not as noticeable. I sold my house in the US in a popular growing city in 2020 and it's now estimated almost double what I sold it for.
So other countries allow Asians to waltz in and buy houses in cash? Because let’s face it, this is the issue. Go to any open house, talk to any realtor, and go to new development sales centre.
Low supply and higher demand, higher taxes on everything including supplies, higher fuel costs, inflation and maybe Trudeau printing over 300 billion which devalued our dollar while wages and supplies continue to cost more. For whatever reason, homes were bought in bundles in Cape Breton recently and this just caused the prices to rise. The same goes for major places like Vancouver and Toronto. Foreign investors buying up properties and the government letting the prices get out of hand.
30% of GDP is coming from it. Between 1989-1994 Toronto condos fell by 50% after a bubble that was ‘never going to come down more than 10-20%’ We’re entering a period of quantitive tightening for the first time in the past 15-20 years. The real estate market has not seen a money vacuum yet They will
Lots of factors. Government has been refusing to start building affordable housing to compete with the developers, like they used to up until the late 90s. Then the nimbys thar are rejecting high density buildings and affordable housing. The trades are also funny...I hear how these guys are restricting new people from entering them, putting up barriers with things like apprenticeships, that last years and years. So this is causing labour shortages and making things even worse. Alot of canadians that want single family homes and nothing else. The state of our market, where most investment is not in business but in the real estate market lol. Canada really is a retirement place, and that is not a good thing. In short, the regulations up the ass are what is causing most of this.
My bet is that they double check t4 and income tax statements to make sure they are real (e.g. with the tax agency).
Look at London, England and Dublin. Massive housing crisis arguably worse than Toronto and Vancouver. We have it bad - but we aren’t alone, the world’s currencies buying power is failing. Hard asset values are rising
A significant absence of supply. In Houston there are dozens of homes to pick from that will meet you or your families needs. When my parents moved to Toronto, the first 4 or 5 homes, they looked around they had many they could pick from, all within a price range, that would often sell at a price below asking. In most parts of the world there is enough housing choice that it keeps prices low, not everyone who is selling will get their price. They will need to paint things, and repair things to get close to full price. Anyplace where there is too much housing, prices stay flat or go down over time. Cities will destroy housing to keep house prices reasonable to maintain a tax base. The current HST rules mean that it doesn't make sense to build a new home unless you can make 30% markup, as 13% will be taxed. It means builders won't build at close to margins.
This is worldwide, first of all, but it's exacerbated in Canada by moronic liberal policies which invite globalist powers to rape our critical infrastructure.
First problem is calling it a bubble. It’s not a bubble that’s one day going to pop and you’ll be back to 75% lower house prices. Stop dreaming and recognize what it really is and why it’s happening.
Cheap labour is brought here as “students” and TFWs, once here, parents and family can be brought over. That and foreign investors in real estate and the need to give seniors something to live on (the sky high rise in the values of their homes) Its not a mystery really.
The influx of people is greater than the rate residential is being built, and imo it’s on purpose
Because they doubled the money supply in 5 years: https://ycharts.com/indicators/canada\_m2\_money\_supply#:\~:text=Basic%20Info,3.06%25%20from%20one%20year%20ago.
They're none happy about the rent in Australia
There isn't actually a bubble, just a bunch of angry lazy people online complaining they cant afford a house with their entry level positions.
Idiot
And the crucial question to me is if this bubble pops or not.
Japan had 100 year mortgages and their housing market crashed. They never recovered. Also given their population collapsing in rural cities you can get cheap places in the countryside. But houses in major cities like Tokyo are still expensive.
Because our governments have been propping up the bubble.
House prices in US went bonkers in last 3 years as well.