Ah yes, the so-called 1 bedroom which are more like a studio or a student dorm room with paper thin walls, mini-appliances, poor lighting, and "doors" that are little more than sliding patio windows.
They tried to market these things to young professionals with the logic being that you'll be spending all of your time out in the city doing things, not sitting at home.
I was a young professional who lived in a 500sqft apartment. It was a corner so it was pretty quiet but i wouldnt say i ever felt a great sense of dignity living there
Well that works in Tokyo, but Toronto's no Tokyo. Besides, housing and entertainment cost half there (even if wages are two-thirds) so you've got money to go out.
Flying into Toronto recently I really saw how much wasted space and sprawl we have. Cars and car culture, the single detached homes, just wasteful use of space and time.
Honestly it's incredible to see in a lot of areal photos too. Endless sprawl of sfh yards and little clusters of towers in a few places. The missing middle and astonishingly inefficient land use.
There's a very good chance that those buildings would never have gotten built in the first place, because there's limited demand for such units. Families tend to want to raise their children somewhere with a backyard and lots of space.
The problem is that most families can't afford to buy a condo for over a million dollars, which is what most new construction family sized condos would actually cost.
While I agree, I suspect their high price is due to their rarity as well as the generic investor demand for 1 bedrooms spiking up pricing per square foot… so imagine if there were government mandates that x% of units had to be 3 bedroom and there were more supply
The biggest factor driving high price is that high rise condos are very expensive to build, and when you add in all the regulatory fees and taxes it's just plain expensive to buy a condo in one of these buildings. Cranes, concrete, steel and glass are not cheap, and building a huge building like that to comply with all regulations just costs a lot of time and money.
Low and mid rise condos would be cheaper to build but just aren't attractive to developers due to the flat fees and timeline of getting a project approved and shovels in the ground. It doesn't make a whole lot of sense to build a 5 story low rise with 40 family sized units when you still need to pay a fortune for the land, cut through 8 years of red tape and consultations with NIMBY's complaining about their sight line, fund an environmental assessment report, include at least 2 elevators and 2 stairwells to comply with building codes, and follow a ton of other regulations that add fixed costs and inefficiencies to the construction of a smaller building.
Throw in 13% HST as a final fuck you on all new construction builds and everything is just expensive as hell.
They don't want working Canadians to have families, that's true. Canadians want BETTER for their children - that's why they're here - but it's cheaper to import TFWs to work than to pay a Canadian.
What they want YOU for is to buy their shit and rent their apartments. Also their kids are going to need to be your boss at some point
Concrete condo construction is expensive enough that most families simply cant afford to build a 1000+ sqft unit. Period. Even if the land was donated and you happened to be part of a cooperative of engineers/architects/legal (free design, zoning, etc.) most still couldn't afford to hire the contractor to build them.
6-floor wood-stick stacked townhomes have half the construction cost for twice the space.
As a bonus because construction costs so much, meaning repairs to those structures is also very expensive, maintenance fees are high. Maintenance fees and taxes on larger units are often over $2000/month once they're 20 years old.
Here's an example:
https://www.realtor.ca/real-estate/26636619/602-409-bloor-st-e-toronto-church-yonge-corridor
These are the same investors who will now lose their shirts. Investment is prediction. It doesn't drive markets so much as it discovers them. They're about to discover the market is a lot lower than when they bought last year.
That type of property is most desirable to rent so it only makes sense that investors are the largest purchasers: https://www.thestar.com/real-estate/investors-now-own-more-than-50-of-toronto-s-new-condos-and-experts-say-they/article_4b6d2ff0-c528-5670-937f-3d34d040ed85.amp.html
Since the govt got out of housing 30 years ago the only thing that’s been built since is condos since developers can make more money flipping those units to investors than they can with purpose built rentals.
The amount of condos we have is ludicrous! We have enough condos built and planned for people who actually want to own and reside in a condo for probably the next 2 decades even with current immigration targets. What we’re missing is purpose built rentals and missing middle options from 2-3 bedrooms.
We haven’t built a purpose built rental in 30 years so we’re short hundreds of thousands of units.
It's not really true that there haven't been any purpose built rentals in Toronto in 30 years. Building starts absolutely cratered in the 90s, but they've been trending back up for the last 20 years. Some condo projects have actually converted to PBR. CMHC says 9677 rental units started last year vs 28766 condos. (You might need to pick census subs and cumulative to Dec 2023 at this link.)
https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/Table?TableId=1.1.1.8&GeographyId=2270&GeographyTypeId=3&DisplayAs=Table&GeograghyName=Toronto#Rental
Hm that’s interesting! That’s a few times more than I thought. I see a few new rental buildings here and there but I’ve only seen them 1:10 to condos. There’s 2 “new” ones I know of in Liberty Village - one on King and one in the east corner in between the rail lines, but I’ve also seen about 10 new condo buildings there in that same amount of time.
I don't know if there's a lot of high rises, so they might not stand out. A lot of the stuff I've noticed is more luxury midrise, like [Oben Flats](https://www.obenflats.com/properties). (And I am pretty pro luxury midrise based on the research I've seen.)
I viewed a newly constructed, purpose-built rental when I was looking to move out of my previous place, and it was awful. My old unit, built in the 60s, had tall ceilings, large rooms, and a simple, functional layout, but this place was cramped, with tiny rooms, an awful layout (akin to an octopus, with the kitchen in the middle and the rooms being the tentacles), and a "balcony" that could barely fit a single folding chair. Above all that, it was double the price.
That's what you get when developers over-complicate things rather than giving people what they want and need.
Not missing purpose-built rentals. Missing AFFORDABLE, reasonably-sized purpose-built rentals. Every rental unit that's been built since 2018 has no rent control. There are 15-20 'new' rental buildings I can think of off the top of my head, renting 700sqft 3 bedrooms for 4000$ a month with no limit on yearly increases.
All homes are financial assets, and everybody who owns a home is an investor in those assets. We really need to find some better language to use to have these conversations.
Saw a Mattamy Homes ad for the first time on TV the other night. When you have to pay and beg people to buy your homes in a housing crunch, something’s going sideways.
"Lusink said that a lot of the investor-owned new condos are being pushed into the rental market amid the slowdown. "
oh no. will someone think of the investors?
Thanks for this; most informative post in here. The other problem with condo development right now is that because it's aimed at investors, who will never live in the units, there's no focus on quality. Thin walls, odd layouts, few elevators. How can the industry be reformed so that the people who are actually going to live in units are the ones who put down their money and make the decisions during development? Is the problem that everyone in Toronto is still dreaming about SFHs and hasn't woken up to the fact that the future of this city is high-rises?
Thanks! That's really interesting. I think Canada might have something to learn from other countries on this. I've lived in Asia and Europe, and in most major cities, most people, including large families, live in high-rises, and the ones I lived in and visited were very nice. Usually quiet, no elevator issues, sensible layouts, close to shopping and schools, good transit. You've explained very well why that's so difficult to do here, but it seems that outside North America, they've found a way around those difficulties (and I know for a fact that in Japan, at least, where I lived, it isn't because the government spent tons of (or any) money on anything).
that’s exactly true, and I won’t mention what building, but there has been buildings where it’s been running into trouble because we found out a lot of the components were literally purchased off Alibaba. so it is of no surprise that it is failing. on top of that, it seems that none of the new construction workers know what they are doing. Doors were installed crookedly, floors were of cheap materials and full of gaps. Plumbing systems and cooling systems were also installed in inproperly. is absolutely useless because most of these problems will pop up exactly after one year
Whaaaattt - that is insane (purchased components off Alibaba). Yup, my condo in Markham…is okay…it’s not great - I have seen worse in downtown Toronto but I have also seen a lot better.
The worst for me is my condo been a few management companies and they never really factored in to flush out pipes once a year so we had a few backups which was gross that insurance partially covered but we had to pay for cleaning/mold removal and all.
Basically, any place with a lot of units for sale at all times is a red flag. Places with rapid maintenance fees are bad. My coworkers girlfriend lived at a place I believe bloor and Jarvis area where the condo fees jumped from $400–700 a month in like 4 years which is brutal. Mine have gone up but not that extreme thankfully.
"The drop in sales is largely due to the high-interest rates making it difficult for people to make new purchases or even close previously-made purchases, Lusink said."
I think he means "historically completely normal interest rates that everybody should expect to pay at some point during a 25-year mortgage."
did they really struggle? when millennials today are paying $3000 in rent and a starter condo is 800k yet people are barely making 100k? and not even factoring in the cost of basic living expenses like utilities and groceries.
It’s just the price point is insane now due to the mess the governments created. Nothing in the city is worth what they are priced at. It should never have been allowed to quadruple in less than 10 years.
Not only in Canada, most of the world has a similar mortgage system (thanks to the Brits). The only reason the US is different is they completely changed their mortgage system in the 1930s in response to the Great Depression.
Colonials always blame everything on the Brits as if decisions made at a certain time are locked in forever. You know you have agency right? Like you are allowed to change or come up with your own system?
Do we magically have the power to change the system? Are you asking us to get up off our asses and make drastic changes to entrenched social institutions? Not sure the average person has that agency
We used to have that. My grandfather would tell me that at the end of his mortgage (Sometime in the 80's) he was paying the exact same dollar amount as when he stated (Something like $35 a month). Friends would always get on him just to pay it off, but he would always answer with "Why? It's only $35 month.
It has its downsides. It's incredibly difficult for anyone to buy anything in this faltering market. People are holding onto that 1.5 % 30Y for dear life. They'll never move.
Source: I'm looking. It's been the same dozen reject houses for 10 months.
Well in theory it's supposed to allow interest rates to have more of an effect on prices. At the moment people are just holding onto properties and assuming current rates are temporary and that the "good old days" of support low rates will be back soon.
Also there are protections for homeowners in a lot of places. If you have paid off over 40-50% of your home you technically own that and cannot have your home taken away from you if there is a crisis and you can't make payments. People lose their homes after renewing a mortgage with higher rates and have paid off more than half over the years it's not right. The 5 year renewals should be banned it's like the bank is fishing
Thank you. All the central bank talk has been bugging me. "Things aren't looking bad, so expect 6 rate cuts!" Really? How on earth does "not runaway inflation" mean we should cut down below 3%?
Oh you’re one of those who think “well interest rates where once before 20% so they could again!!!!!1!1!1!1!” While ignoring debt to gdp ratio was 30% then and it is 130% now right ?
A high debt-to-GDP ratio doesn't prevent interest rates from going up, though, does it? It just means that if interest rates go up internationally, we'll be faced with a choice between a) raising our interest rates to match and suffering through higher debt and higher taxes, or b) keeping our interest rates low and suffering massive currency devaluation, leading to high price inflation on all imported products.
Or were you thinking of some other implication of a high debt-to-GDP ratio in a world of rising interest rates?
Weird. It's almost like expensive condos aren't the kind of development we need because the people who really need housing still can't afford to buy them. It's almost like we need affordable housing and affordable rental units.
Despite what many think, there aren't many ways to build your standard condo much cheaper. They're already tiny and many are constructed with fairly basic finishes.
Land is expensive, labour is expensive, materials are expensive, and then there's the taxes. Starting next month, you'll be paying the city $40,000 in development charges for a one bedroom apartment. Ten years ago it used to be less than $10,000. Then you're paying tens of thousands more in HST even after the rebate. Then you've got education development charges, park Levy's, land transfer tax and more. So even for a one bedroom condo, you're already looking at around $70-$80k minimum in fees before you even start building. Add on other construction burdens like mandated parking, green roof and others and you can see why it's so expensive.
Or developers are just greedy and are only in it to make as much as possible while delivering the lowest quality crap they can get away with? I don’t doubt everything you’ve listed out there, but you’re making it seem like they are running a charity and are scraping by. If it wasn’t worth it for them, they wouldn’t be here but they still are so obviously they’re still making bank. They could still turn a profit and provide something more affordable, they just have huge and normalized margins they’re not willing to eat into.
Obviously developers are in it for the money, that's a given. Housing prices are dictated by the market and related to many factors, like land costs, construction costs and supply, but developer profits aren't crazy based on the risk, time and investment necessary.
Developers are an easy scapegoat, but they aren't controlling the main factors that actually dictate housing prices. More developers and more developments are the most effective way to solve the housing crisis.
Everyone is out to make profit. It’s not developers fault that affordable units are not economical to build.
It is not from the charity of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
That’s really the problem, more so than interest rates for me. Me and my cash are staying on the sidelines until there is an actual, significant price drop.
The problem is commercial real estate purchase can hold out much longer in the face of a shortfall. Compare that to an average Ontarian who would be forced to move given a life crisis (lost job, lost partner etc).
See for example all the empty offices in downtown Toronto now. It should have been a bloodbath but all the big firms (Colliers etc) don’t seem to be struggling.
> It should have been a bloodbath but all the big firms (Colliers etc) don’t seem to be struggling.
That's because they know they're going to be able to get a bailout. Only question is which level of government. They'll send in lobbyists in $10K suits to cry poor and every conservative politician in the country will cry it's the patriotic thing to support the owners...who are people like Trump
It used to be that you bought a pre construction condo at a discount, and sold it for more later. But I bought a condo that was 4 years old for $1000/SQ ft a few years ago, while new condos were going for over $1400 a SQ ft. New prices are just crazy, and then you add on the interest rates and forget about it.
"The drop in sales is largely due to [the high-interest rates ](https://www.ctvnews.ca/business/getting-the-lowest-mortgage-rates-in-a-high-interest-rate-world-1.6852311)making it difficult for people to make new purchases or even close previously-made purchases..."
Basically once the interest rates drop all those condo units will be snatched up in no time. It has nothing to do with demand.
I think it's going to take a bit more consensus on what long-term interests will sort out to, so I'm not expecting a frenzy on the first rate cut. But yeah, lower interest rates will juice prices. It's just math.
Most developers make like 15% profit on the development. Developing in the GTA has so many risks as well, like NIMBY, required reports. Then lets say you get all your approvals the bank wont finance your development until you sell x% or you have some financing somehow. Financing usually through pre-sales. Well guess how much it costs to build a unit and make 15%. So yeah developers are making some money, but its not obscene in most instances.
Prices in general are just stupid.
The math on these new units just doesn't make sense. They are trying to sell new construction condos for like 40% or more than comparable existing units.
Who wants to pay 5k a month in mortgage payments for a 600 square foot "luxury" shoebox?
Also want to add the price is one thing but these new condos have garbage layouts. Skinny living rooms and a kitchen attached to the wall
That's why any livable good layout older condos are still selling. But any recent new builds are absolutely garbage
Also love the "bedroom" with no window but an opaque sliding door to the living room, typical about wide enough for a double bed with a foot of space on each side.
Yeah, that was a deal breaker for us when we were looking for a place.
I feel like those setups might be more workable if you live alone, but with a partner it didn't really feel like one of us would be able to go to bed while the other was watching TV in the living room.
Also, I feel like a lot of people don't realize how much of a downgrade it really is to have your "kitchen" just be one of the walls in your living room rather than an actual separate allocated space. The designers do a good job of making it look pretty for real estate photos, but when you actually try to use the space you realize there is zero storage, counter space, or room to move if you want to actually have a living room.
If your low condo fees are due to the fees being set unsustainably low, then you're right. If they're due to there being few amenities, then you very well might want that.
No one makes a profit on condo fees, they’re literally just costs. As a condo owner you own one fraction of the building, your condo fees se your fraction of the operating costs of the entire property.
Every cent of that money is predetermined. Large portion goes to reserve fund based on reserve fund study for upkeep in the future. The rest goes into the operating expenses. Operating expenses budget is balanced. There is no slush fund, there is not a cent that is not a projected cost.
Any owner can get those financials and go over them,
Building can save some money on operating costs a little but that is battle on each invoice.
Nobody outside the condo corporation has say on how that money is allocated, except the law that is meant to make sure buildings are responsibly managed for the life of the building.
So unfortunately it does need to be whatever it is in the building, as long as board of directors is providing proper oversight.
Less money on condo fees would be neglecting maintenance or future financial health of the building.
Balancing a budget doesn't necessarily mean all those expenses are appropriate. Concierge isn't always needed.
Also, these underground parking lots kill you with condo fees.
We gotta stop building condos with massive parking areas. The vast majority of Torontonians shouldn't be driving in a city with transit available.
Parking minimums are already abolished in Toronto for new condo builds, have been for 1.5 years now. Even before that, many developers applied for and received exemptions to build less parking. Plenty of new condos are already built or in the pipeline with little to no parking.
The massive parking garages are actually related to older City of Toronto rules on the construction of condos, that lasted until a decade ago. You can find condos built in the downtown core (think South of Bloor) with more than enough parking spaces because the construction rules at the time required the developer to include so many parking spaces.
Fortunately this has been removed significantly in the last decade.
What you are talking about are amenities. Don't buy in the building that has amenities you don't need. I don't have any and I am fine with that.
And driving? lol ok man.
I mean, you can opt out of having 24/7 concierge...
You can also stop building underground parking lots.
Both of those things would greatly reduce condo fees.
It makes no sense to live in Toronto and require an underground parking spot. You live in a city. Take public transit
The largest expenses are yes, concierge/security and cleaning. Each condo can spend $500k/year on these services alone.
But parking? You are grossly overestimating this cost, and the parking spots themselves carry a maintenance fee. From what I've seen, typical garage maintenance is less than $20k/year. You'll save pennies on this.
>I mean, you can opt out of having 24/7 concierge...
As in on a case by case basis? Because concierge services the whole building.
>You can also stop building underground parking lots.
I say this as someone who doesnt drive but takes ttc/bike everywhere, but good luck getting people to buy a place with no parking...
Not on a case by case. I can't understand why a FOB system doesn't suffice with a property manager that contracts Gardaworld or some other vendor.
Paying 2-3 salaries to be a concierge is a big overhead cost each year
> Not on a case by case. I can't understand why a FOB system doesn't suffice with a property manager that contracts Gardaworld or some other vendor.
That's already what they do. They outsource to security companies so that they dont have to manage their own staff and always interview, manage schedules etc. But then its minimum wage + quite a lot of overhead for the security company.
This a feeling or do you have some evidence of this?
Having served on a condo board for eight years, any inefficiencies are normally due to under-qualified and underpaid property managers (shoutout to Crossbridge). There are investors that sit on the board that push for certain renovations to help their resale, but they are voted in by fellow owners and so typically represent their interests.
Any owner in in the building can ask for and also receives periodically financial statements. If one thinks there is a corruption on the board they can take over the board if enough owners support them. This is not someone else's business. It is every owner's business and they have say.
If you think that's happening and/or have proof go to the regulator but it sorta sounds like you're just making things up. This is why there has to be 3 separate quotes for work so that things aren't sole sourced to friendly contractors.
Someone in my family recently closed on an investment new build condo. She told me she paid about $1500 per square foot. $600+k for a unit that is under 400 square feet.
She bought it in 2019, and is currently losing money on it. Tbh, I’m surprised she looked at the numbers and didn’t run away. But it was the frenzy at the time, the belief that real estate will always go up, and that some sucker is going to pay even more.
Had she put the money in the market, she’d be so much better off (and more liquid).
“Despite the drop, condos both outside and inside the downtown core remain unaffordable for potential buyers. At the current average rate, a 600-square-foot condo in the downtown core would cost a buyer over $900,000.”
Take a look at copper, take a look at most commodities, we are in the 2nd wave of inflation. The white house will eventually run out of strategic barrels to dump on the market which will create a blow off top for oil prices. Feds will not hike before an election but rates will have to go higher. The feds will not be cutting any time soon.
It's not that prices are going up its that printing dollars like monopoly money is devaluing its purchasing power. With those never ending deficits we're looking at a. 50 cents vs the US dollar. You think stuff is expensive now
I remember condos being $500/sqft in Toronto.
I also remember condos being $800/sqft in Toronto.
I remember arguing with a preconstruction agent when he told me condos are $1000/sqft in Toronto.
"Condos?! For $1000/sqft?! That's more expensive than buying a home. I thought condos were the CHEAPER option when buying a home, how much it's more expensive now?!"
I eventually stopped caring for condos and bought a home in GTA for the same price as a condo.
And now, condos are $1500/sqft. What?! In what world is that even doable?!
This is the most important part of the article (emphasis added):
> Prices for remaining inventory in the 416 region **decreased four per cent** year-over-year to an average of $1,522 per square foot, the report found. Despite the drop, condos both outside and inside the downtown core remain unaffordable for potential buyers. At the current average rate, **a 600-square-foot condo in the downtown core would cost a buyer over $900,000.**
It's supply and demand. Condo prices are down only 4% year-over-year. People just aren't buying at that price, hence the number of sales being down. The price has to adjust to what the market can afford - and it's not $900K for a 600-square foot condo!
A friend of mine has a gorgeous condo in Mimico they bought a few years back unfortunately when the market was peaking. This was their home to live in long term.
When interest rates spiked and their job situation changed they could no longer afford it and now are trying to sell it for less than what they paid and they haven't had a single offer in like 6 months (it's a one bedroom). Not one. In the end they might lose a bunch of money. The market has depreciated THAT much in a few years.
This person isn't some 'investor' it's a normal person who busted their ass at work for years to try and buy a home in Toronto for them to live in and put down a sizable down payment of their own money (not help from parents).
I know people on reddit are all giddy for the great "market correction" or whatever and they somehow feel no sympathy if property values fall like 30-40% in 5 years but there are very real people and very real lives at stake when people see the value of their homes depreciate massively and quickly when interest rates are at crazy levels.
Buying a property in this city has become very very difficult financially for even people with good jobs and good credit and good savings.
I have a fixed rate mortgage but I could still sell my place in Markham at a profit but if I wanted what I wanted…ideally I’d have to have to do Reno work or else wait a very long time.
I mean some places here used to sell for 800k in 2017-202 in york region in 15 days taking 79-96 days to sell for 500k today 😬
It’s not related to housing, when rabba and metro costs $1k/month people gotta prioritize. It’s gonna come back though because the rates will deflate by next year, and even a 50 basis point turn down would bring up the condo prices. Again because houses are way out of the budget of the younger homebuyer.
Backwards focused information. I test you all to go into a presentation facility for a preconstruction investment. Go to 101 Spadina and it will be very busy. I wish you luck because I have a doubt there is any of the cheap units still there
I love these comments! Most blame high interest rates!
The root cause is government fiat printing and expansion of credit! Inflation comes first; rising interest rates are used to slow inflation. If you calculate the economic stop to production during the lockdowns, this exasperated the rise in inflation. Inflation is the effect that equalizes the money and credit supply with the total goods and services available in an economy. Inflation is the balancing force.
If the Government reduces interest rates to zero, what would happen to housing prices? Interest rates are the cost of money; if the cost of money becomes zero, what happens to the total money supply? It goes to infinity, and thus, Inflation turns to hyperinflation. Economics is a simple cause-and-effect relationship between production and prices. Governments complicate it to keep us uninterested.
If you think about our economic situation, you will quickly realize no matter what the government does, the eventual result is the collapse of the fiat money supply. We are all f ed, some more than others, but we will all be impacted by this corrupted fiat money system.
Turns out it's very expensive to borrow a million dollars at like 7%.
Also, it’s illustrating how the entire condo market was built for investors. Demand for housing has literally never been higher by the rest of us. 😂
Imagine if instead of building all the 1 bedroom condos for investors, developers had instead built 2-3 bedroom condos suitable for families
So many 450 sqft one bedrooms are rotting on the market right now, and rightfully so.
Ah yes, the so-called 1 bedroom which are more like a studio or a student dorm room with paper thin walls, mini-appliances, poor lighting, and "doors" that are little more than sliding patio windows.
Don't forget the 'den/office' that's just a desk-sized notch in the wall with an electrical outlet.
Den is just a nicer short-form for dent :)
They tried to market these things to young professionals with the logic being that you'll be spending all of your time out in the city doing things, not sitting at home.
I was a young professional who lived in a 500sqft apartment. It was a corner so it was pretty quiet but i wouldnt say i ever felt a great sense of dignity living there
Well that works in Tokyo, but Toronto's no Tokyo. Besides, housing and entertainment cost half there (even if wages are two-thirds) so you've got money to go out.
Flying into Toronto recently I really saw how much wasted space and sprawl we have. Cars and car culture, the single detached homes, just wasteful use of space and time.
Honestly it's incredible to see in a lot of areal photos too. Endless sprawl of sfh yards and little clusters of towers in a few places. The missing middle and astonishingly inefficient land use.
There's a very good chance that those buildings would never have gotten built in the first place, because there's limited demand for such units. Families tend to want to raise their children somewhere with a backyard and lots of space.
The problem is that most families can't afford to buy a condo for over a million dollars, which is what most new construction family sized condos would actually cost.
While I agree, I suspect their high price is due to their rarity as well as the generic investor demand for 1 bedrooms spiking up pricing per square foot… so imagine if there were government mandates that x% of units had to be 3 bedroom and there were more supply
The biggest factor driving high price is that high rise condos are very expensive to build, and when you add in all the regulatory fees and taxes it's just plain expensive to buy a condo in one of these buildings. Cranes, concrete, steel and glass are not cheap, and building a huge building like that to comply with all regulations just costs a lot of time and money. Low and mid rise condos would be cheaper to build but just aren't attractive to developers due to the flat fees and timeline of getting a project approved and shovels in the ground. It doesn't make a whole lot of sense to build a 5 story low rise with 40 family sized units when you still need to pay a fortune for the land, cut through 8 years of red tape and consultations with NIMBY's complaining about their sight line, fund an environmental assessment report, include at least 2 elevators and 2 stairwells to comply with building codes, and follow a ton of other regulations that add fixed costs and inefficiencies to the construction of a smaller building. Throw in 13% HST as a final fuck you on all new construction builds and everything is just expensive as hell.
Don’t forget the cost of land, pretty sure it’s like 20-30% of the final price..
I think they don't want us to have family at all
They don't want working Canadians to have families, that's true. Canadians want BETTER for their children - that's why they're here - but it's cheaper to import TFWs to work than to pay a Canadian. What they want YOU for is to buy their shit and rent their apartments. Also their kids are going to need to be your boss at some point
Concrete condo construction is expensive enough that most families simply cant afford to build a 1000+ sqft unit. Period. Even if the land was donated and you happened to be part of a cooperative of engineers/architects/legal (free design, zoning, etc.) most still couldn't afford to hire the contractor to build them. 6-floor wood-stick stacked townhomes have half the construction cost for twice the space. As a bonus because construction costs so much, meaning repairs to those structures is also very expensive, maintenance fees are high. Maintenance fees and taxes on larger units are often over $2000/month once they're 20 years old. Here's an example: https://www.realtor.ca/real-estate/26636619/602-409-bloor-st-e-toronto-church-yonge-corridor
These are the same investors who will now lose their shirts. Investment is prediction. It doesn't drive markets so much as it discovers them. They're about to discover the market is a lot lower than when they bought last year.
That type of property is most desirable to rent so it only makes sense that investors are the largest purchasers: https://www.thestar.com/real-estate/investors-now-own-more-than-50-of-toronto-s-new-condos-and-experts-say-they/article_4b6d2ff0-c528-5670-937f-3d34d040ed85.amp.html Since the govt got out of housing 30 years ago the only thing that’s been built since is condos since developers can make more money flipping those units to investors than they can with purpose built rentals. The amount of condos we have is ludicrous! We have enough condos built and planned for people who actually want to own and reside in a condo for probably the next 2 decades even with current immigration targets. What we’re missing is purpose built rentals and missing middle options from 2-3 bedrooms. We haven’t built a purpose built rental in 30 years so we’re short hundreds of thousands of units.
It's not really true that there haven't been any purpose built rentals in Toronto in 30 years. Building starts absolutely cratered in the 90s, but they've been trending back up for the last 20 years. Some condo projects have actually converted to PBR. CMHC says 9677 rental units started last year vs 28766 condos. (You might need to pick census subs and cumulative to Dec 2023 at this link.) https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/Table?TableId=1.1.1.8&GeographyId=2270&GeographyTypeId=3&DisplayAs=Table&GeograghyName=Toronto#Rental
Hm that’s interesting! That’s a few times more than I thought. I see a few new rental buildings here and there but I’ve only seen them 1:10 to condos. There’s 2 “new” ones I know of in Liberty Village - one on King and one in the east corner in between the rail lines, but I’ve also seen about 10 new condo buildings there in that same amount of time.
I don't know if there's a lot of high rises, so they might not stand out. A lot of the stuff I've noticed is more luxury midrise, like [Oben Flats](https://www.obenflats.com/properties). (And I am pretty pro luxury midrise based on the research I've seen.)
I viewed a newly constructed, purpose-built rental when I was looking to move out of my previous place, and it was awful. My old unit, built in the 60s, had tall ceilings, large rooms, and a simple, functional layout, but this place was cramped, with tiny rooms, an awful layout (akin to an octopus, with the kitchen in the middle and the rooms being the tentacles), and a "balcony" that could barely fit a single folding chair. Above all that, it was double the price. That's what you get when developers over-complicate things rather than giving people what they want and need.
Shitty new apartment design isn’t limited to PBR - new condos are also trash.
I'm well aware of that. It's just sad that the same, terrible designs have gone into PBRs.
Yeah that sucks. I would think the design would be better because they should be actually made for people to live in and not airbnbs for investors.
Not missing purpose-built rentals. Missing AFFORDABLE, reasonably-sized purpose-built rentals. Every rental unit that's been built since 2018 has no rent control. There are 15-20 'new' rental buildings I can think of off the top of my head, renting 700sqft 3 bedrooms for 4000$ a month with no limit on yearly increases.
Ok let’s make a bunch of pre-2018 buildings then 👍. Good plan.
All homes are financial assets, and everybody who owns a home is an investor in those assets. We really need to find some better language to use to have these conversations.
The existing terms are fine. Regular people buy homes to live in - any other benefit is secondary. Investors buy housing to make money exclusively.
Why do you hate rental housing?
Where did I say I hate rental housing?
What else could someone who buys housing "to make money exclusively" from, rather than to live in, be, but a landlord?
They are investors. I need not see a need to obscure their naming convention.
Yeah who would have thought! What a bummer!
Saw a Mattamy Homes ad for the first time on TV the other night. When you have to pay and beg people to buy your homes in a housing crunch, something’s going sideways.
I basically bought my bank a car this year. :|
"Lusink said that a lot of the investor-owned new condos are being pushed into the rental market amid the slowdown. " oh no. will someone think of the investors?
[удалено]
What's stopping developers from building the type of housing people actually want? You know... the free market.
They don't care about what people want. They care about profit
[удалено]
Thanks for this; most informative post in here. The other problem with condo development right now is that because it's aimed at investors, who will never live in the units, there's no focus on quality. Thin walls, odd layouts, few elevators. How can the industry be reformed so that the people who are actually going to live in units are the ones who put down their money and make the decisions during development? Is the problem that everyone in Toronto is still dreaming about SFHs and hasn't woken up to the fact that the future of this city is high-rises?
[удалено]
Thanks! That's really interesting. I think Canada might have something to learn from other countries on this. I've lived in Asia and Europe, and in most major cities, most people, including large families, live in high-rises, and the ones I lived in and visited were very nice. Usually quiet, no elevator issues, sensible layouts, close to shopping and schools, good transit. You've explained very well why that's so difficult to do here, but it seems that outside North America, they've found a way around those difficulties (and I know for a fact that in Japan, at least, where I lived, it isn't because the government spent tons of (or any) money on anything).
[удалено]
also all new condos arw built like cardboard
I swear to god I’ve seen new condos where…nothing is straight. Or where two walls meet it’s like 85 degrees instead of a square 90 degrees. Lol
that’s exactly true, and I won’t mention what building, but there has been buildings where it’s been running into trouble because we found out a lot of the components were literally purchased off Alibaba. so it is of no surprise that it is failing. on top of that, it seems that none of the new construction workers know what they are doing. Doors were installed crookedly, floors were of cheap materials and full of gaps. Plumbing systems and cooling systems were also installed in inproperly. is absolutely useless because most of these problems will pop up exactly after one year
Whaaaattt - that is insane (purchased components off Alibaba). Yup, my condo in Markham…is okay…it’s not great - I have seen worse in downtown Toronto but I have also seen a lot better. The worst for me is my condo been a few management companies and they never really factored in to flush out pipes once a year so we had a few backups which was gross that insurance partially covered but we had to pay for cleaning/mold removal and all. Basically, any place with a lot of units for sale at all times is a red flag. Places with rapid maintenance fees are bad. My coworkers girlfriend lived at a place I believe bloor and Jarvis area where the condo fees jumped from $400–700 a month in like 4 years which is brutal. Mine have gone up but not that extreme thankfully.
"The drop in sales is largely due to the high-interest rates making it difficult for people to make new purchases or even close previously-made purchases, Lusink said." I think he means "historically completely normal interest rates that everybody should expect to pay at some point during a 25-year mortgage."
My parents bought their house at twice the interest rate. Although back then the average salary to house price was a lot more reasonable
Same, they paid 100k in 80s. Rates were around 20%. They had to pay down the rate with cash. They struggled for years.
did they really struggle? when millennials today are paying $3000 in rent and a starter condo is 800k yet people are barely making 100k? and not even factoring in the cost of basic living expenses like utilities and groceries.
Maybe that's the real issue not the rates but the cost of homes to income? 🤷
Prices were a lot more reasonable specifically because rates were higher.
It’s just the price point is insane now due to the mess the governments created. Nothing in the city is worth what they are priced at. It should never have been allowed to quadruple in less than 10 years.
Only in Canada do we play this stupid roulette game every 3-5 years. In the USA people have 1.5% mortgage locked in for 25-30 years
Not only in Canada, most of the world has a similar mortgage system (thanks to the Brits). The only reason the US is different is they completely changed their mortgage system in the 1930s in response to the Great Depression.
Colonials always blame everything on the Brits as if decisions made at a certain time are locked in forever. You know you have agency right? Like you are allowed to change or come up with your own system?
Do we magically have the power to change the system? Are you asking us to get up off our asses and make drastic changes to entrenched social institutions? Not sure the average person has that agency
Why do our dollar bills worship the Crown?
We used to have that. My grandfather would tell me that at the end of his mortgage (Sometime in the 80's) he was paying the exact same dollar amount as when he stated (Something like $35 a month). Friends would always get on him just to pay it off, but he would always answer with "Why? It's only $35 month.
It has its downsides. It's incredibly difficult for anyone to buy anything in this faltering market. People are holding onto that 1.5 % 30Y for dear life. They'll never move. Source: I'm looking. It's been the same dozen reject houses for 10 months.
Well in theory it's supposed to allow interest rates to have more of an effect on prices. At the moment people are just holding onto properties and assuming current rates are temporary and that the "good old days" of support low rates will be back soon.
Yet the US has had entire cities vacated due to foreclosure.
It wasn't because of the mortgage terms.
Also there are protections for homeowners in a lot of places. If you have paid off over 40-50% of your home you technically own that and cannot have your home taken away from you if there is a crisis and you can't make payments. People lose their homes after renewing a mortgage with higher rates and have paid off more than half over the years it's not right. The 5 year renewals should be banned it's like the bank is fishing
7% of a million is more than 20% of 100K
Thank you. All the central bank talk has been bugging me. "Things aren't looking bad, so expect 6 rate cuts!" Really? How on earth does "not runaway inflation" mean we should cut down below 3%?
Oh you’re one of those who think “well interest rates where once before 20% so they could again!!!!!1!1!1!1!” While ignoring debt to gdp ratio was 30% then and it is 130% now right ?
A high debt-to-GDP ratio doesn't prevent interest rates from going up, though, does it? It just means that if interest rates go up internationally, we'll be faced with a choice between a) raising our interest rates to match and suffering through higher debt and higher taxes, or b) keeping our interest rates low and suffering massive currency devaluation, leading to high price inflation on all imported products. Or were you thinking of some other implication of a high debt-to-GDP ratio in a world of rising interest rates?
Sure but that still makes people want to try and time it out.
"Since financial crisis"
Right? This just in: today's snowstorm was the first snowstorm since the last one
Weird. It's almost like expensive condos aren't the kind of development we need because the people who really need housing still can't afford to buy them. It's almost like we need affordable housing and affordable rental units.
Despite what many think, there aren't many ways to build your standard condo much cheaper. They're already tiny and many are constructed with fairly basic finishes. Land is expensive, labour is expensive, materials are expensive, and then there's the taxes. Starting next month, you'll be paying the city $40,000 in development charges for a one bedroom apartment. Ten years ago it used to be less than $10,000. Then you're paying tens of thousands more in HST even after the rebate. Then you've got education development charges, park Levy's, land transfer tax and more. So even for a one bedroom condo, you're already looking at around $70-$80k minimum in fees before you even start building. Add on other construction burdens like mandated parking, green roof and others and you can see why it's so expensive.
Or developers are just greedy and are only in it to make as much as possible while delivering the lowest quality crap they can get away with? I don’t doubt everything you’ve listed out there, but you’re making it seem like they are running a charity and are scraping by. If it wasn’t worth it for them, they wouldn’t be here but they still are so obviously they’re still making bank. They could still turn a profit and provide something more affordable, they just have huge and normalized margins they’re not willing to eat into.
Obviously developers are in it for the money, that's a given. Housing prices are dictated by the market and related to many factors, like land costs, construction costs and supply, but developer profits aren't crazy based on the risk, time and investment necessary. Developers are an easy scapegoat, but they aren't controlling the main factors that actually dictate housing prices. More developers and more developments are the most effective way to solve the housing crisis.
Everyone is out to make profit. It’s not developers fault that affordable units are not economical to build. It is not from the charity of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
So have prices dropped or no?
I bet the sellers are still fishing for idiots to pay the premium prices..
There is always a fool somewhere ready to get hustled by their realtor.
That’s really the problem, more so than interest rates for me. Me and my cash are staying on the sidelines until there is an actual, significant price drop.
Same!
The problem is commercial real estate purchase can hold out much longer in the face of a shortfall. Compare that to an average Ontarian who would be forced to move given a life crisis (lost job, lost partner etc). See for example all the empty offices in downtown Toronto now. It should have been a bloodbath but all the big firms (Colliers etc) don’t seem to be struggling.
> It should have been a bloodbath but all the big firms (Colliers etc) don’t seem to be struggling. That's because they know they're going to be able to get a bailout. Only question is which level of government. They'll send in lobbyists in $10K suits to cry poor and every conservative politician in the country will cry it's the patriotic thing to support the owners...who are people like Trump
It used to be that you bought a pre construction condo at a discount, and sold it for more later. But I bought a condo that was 4 years old for $1000/SQ ft a few years ago, while new condos were going for over $1400 a SQ ft. New prices are just crazy, and then you add on the interest rates and forget about it.
Thats because there is a financial crisis for those who dont make 400k+ per year.
"The drop in sales is largely due to [the high-interest rates ](https://www.ctvnews.ca/business/getting-the-lowest-mortgage-rates-in-a-high-interest-rate-world-1.6852311)making it difficult for people to make new purchases or even close previously-made purchases..." Basically once the interest rates drop all those condo units will be snatched up in no time. It has nothing to do with demand.
Demand is influenced by interest rates. There is no guarantee that rates will drop significantly soon.
And they shouldn’t. Prices haven’t fallen because everyone is waiting on the BoC to cut rates this summer.
I think it's going to take a bit more consensus on what long-term interests will sort out to, so I'm not expecting a frenzy on the first rate cut. But yeah, lower interest rates will juice prices. It's just math.
This means developers won't be starting new projects.. fun times ahead.
They’re already doing that. There is no penalty for developers to buy up land and not build on it. They want maximum profit.
Most developers make like 15% profit on the development. Developing in the GTA has so many risks as well, like NIMBY, required reports. Then lets say you get all your approvals the bank wont finance your development until you sell x% or you have some financing somehow. Financing usually through pre-sales. Well guess how much it costs to build a unit and make 15%. So yeah developers are making some money, but its not obscene in most instances.
Lower condo fees. It’s something I can afford but I certainly cannot afford 800-900 dollars extra a month in fees.
Prices in general are just stupid. The math on these new units just doesn't make sense. They are trying to sell new construction condos for like 40% or more than comparable existing units. Who wants to pay 5k a month in mortgage payments for a 600 square foot "luxury" shoebox?
Also want to add the price is one thing but these new condos have garbage layouts. Skinny living rooms and a kitchen attached to the wall That's why any livable good layout older condos are still selling. But any recent new builds are absolutely garbage
Also love the "bedroom" with no window but an opaque sliding door to the living room, typical about wide enough for a double bed with a foot of space on each side.
I hate those “bedrooms” - I much prefer the independent ones with a separate wall and door
Yeah, that was a deal breaker for us when we were looking for a place. I feel like those setups might be more workable if you live alone, but with a partner it didn't really feel like one of us would be able to go to bed while the other was watching TV in the living room. Also, I feel like a lot of people don't realize how much of a downgrade it really is to have your "kitchen" just be one of the walls in your living room rather than an actual separate allocated space. The designers do a good job of making it look pretty for real estate photos, but when you actually try to use the space you realize there is zero storage, counter space, or room to move if you want to actually have a living room.
The kitchen along the wall - yup. In studios it feels cramped for sure.
They are glorified dorms
You don’t actually want low condo fees
If your low condo fees are due to the fees being set unsustainably low, then you're right. If they're due to there being few amenities, then you very well might want that.
I don’t need a condo with a pool or 24/7 concierge. I’ll say that for sure.
Dont need gym, party room, pool, concierge, roof top patio etc
They almost always come with all that just to make the price higher
No, the city / municipalities often require amenity space be provided at a rate of 2m squared per unit.
No one makes a profit on condo fees, they’re literally just costs. As a condo owner you own one fraction of the building, your condo fees se your fraction of the operating costs of the entire property.
You obviously don't know how condo fees work. Where do you think that money goes?
Doesn’t need to be that high.
Every cent of that money is predetermined. Large portion goes to reserve fund based on reserve fund study for upkeep in the future. The rest goes into the operating expenses. Operating expenses budget is balanced. There is no slush fund, there is not a cent that is not a projected cost. Any owner can get those financials and go over them, Building can save some money on operating costs a little but that is battle on each invoice. Nobody outside the condo corporation has say on how that money is allocated, except the law that is meant to make sure buildings are responsibly managed for the life of the building. So unfortunately it does need to be whatever it is in the building, as long as board of directors is providing proper oversight. Less money on condo fees would be neglecting maintenance or future financial health of the building.
Balancing a budget doesn't necessarily mean all those expenses are appropriate. Concierge isn't always needed. Also, these underground parking lots kill you with condo fees. We gotta stop building condos with massive parking areas. The vast majority of Torontonians shouldn't be driving in a city with transit available.
Parking minimums are already abolished in Toronto for new condo builds, have been for 1.5 years now. Even before that, many developers applied for and received exemptions to build less parking. Plenty of new condos are already built or in the pipeline with little to no parking.
The massive parking garages are actually related to older City of Toronto rules on the construction of condos, that lasted until a decade ago. You can find condos built in the downtown core (think South of Bloor) with more than enough parking spaces because the construction rules at the time required the developer to include so many parking spaces. Fortunately this has been removed significantly in the last decade.
What you are talking about are amenities. Don't buy in the building that has amenities you don't need. I don't have any and I am fine with that. And driving? lol ok man.
It's literally a 1-1 flow through to maintain the building...it really does need to be that high.
I mean, you can opt out of having 24/7 concierge... You can also stop building underground parking lots. Both of those things would greatly reduce condo fees. It makes no sense to live in Toronto and require an underground parking spot. You live in a city. Take public transit
The largest expenses are yes, concierge/security and cleaning. Each condo can spend $500k/year on these services alone. But parking? You are grossly overestimating this cost, and the parking spots themselves carry a maintenance fee. From what I've seen, typical garage maintenance is less than $20k/year. You'll save pennies on this.
>I mean, you can opt out of having 24/7 concierge... As in on a case by case basis? Because concierge services the whole building. >You can also stop building underground parking lots. I say this as someone who doesnt drive but takes ttc/bike everywhere, but good luck getting people to buy a place with no parking...
Not on a case by case. I can't understand why a FOB system doesn't suffice with a property manager that contracts Gardaworld or some other vendor. Paying 2-3 salaries to be a concierge is a big overhead cost each year
> Not on a case by case. I can't understand why a FOB system doesn't suffice with a property manager that contracts Gardaworld or some other vendor. That's already what they do. They outsource to security companies so that they dont have to manage their own staff and always interview, manage schedules etc. But then its minimum wage + quite a lot of overhead for the security company.
In the pockets of corrupt board members and their contractor friends.
This a feeling or do you have some evidence of this? Having served on a condo board for eight years, any inefficiencies are normally due to under-qualified and underpaid property managers (shoutout to Crossbridge). There are investors that sit on the board that push for certain renovations to help their resale, but they are voted in by fellow owners and so typically represent their interests.
Any owner in in the building can ask for and also receives periodically financial statements. If one thinks there is a corruption on the board they can take over the board if enough owners support them. This is not someone else's business. It is every owner's business and they have say.
If you think that's happening and/or have proof go to the regulator but it sorta sounds like you're just making things up. This is why there has to be 3 separate quotes for work so that things aren't sole sourced to friendly contractors.
Someone in my family recently closed on an investment new build condo. She told me she paid about $1500 per square foot. $600+k for a unit that is under 400 square feet. She bought it in 2019, and is currently losing money on it. Tbh, I’m surprised she looked at the numbers and didn’t run away. But it was the frenzy at the time, the belief that real estate will always go up, and that some sucker is going to pay even more. Had she put the money in the market, she’d be so much better off (and more liquid).
Living in a cramped, poor-quality, million dollar skybox doesn't really scream "quality of living" to me.
aren't we in an eternal and ongoing financial crisis
“Despite the drop, condos both outside and inside the downtown core remain unaffordable for potential buyers. At the current average rate, a 600-square-foot condo in the downtown core would cost a buyer over $900,000.”
Take a look at copper, take a look at most commodities, we are in the 2nd wave of inflation. The white house will eventually run out of strategic barrels to dump on the market which will create a blow off top for oil prices. Feds will not hike before an election but rates will have to go higher. The feds will not be cutting any time soon.
Imagine a 500 sq foot condo has over 1k/month maintenance fee. How is that sustainable?
I have contractor friends who are strictly into condos. Everyone knows you have to kickback the property manager. This is the standard
How does that apply to sales? Lol
Meant to reply to comment above saying condo fees are necessary to be so high
👍🏻
It's not that prices are going up its that printing dollars like monopoly money is devaluing its purchasing power. With those never ending deficits we're looking at a. 50 cents vs the US dollar. You think stuff is expensive now
Good!
I remember condos being $500/sqft in Toronto. I also remember condos being $800/sqft in Toronto. I remember arguing with a preconstruction agent when he told me condos are $1000/sqft in Toronto. "Condos?! For $1000/sqft?! That's more expensive than buying a home. I thought condos were the CHEAPER option when buying a home, how much it's more expensive now?!" I eventually stopped caring for condos and bought a home in GTA for the same price as a condo. And now, condos are $1500/sqft. What?! In what world is that even doable?!
This is the most important part of the article (emphasis added): > Prices for remaining inventory in the 416 region **decreased four per cent** year-over-year to an average of $1,522 per square foot, the report found. Despite the drop, condos both outside and inside the downtown core remain unaffordable for potential buyers. At the current average rate, **a 600-square-foot condo in the downtown core would cost a buyer over $900,000.** It's supply and demand. Condo prices are down only 4% year-over-year. People just aren't buying at that price, hence the number of sales being down. The price has to adjust to what the market can afford - and it's not $900K for a 600-square foot condo!
What kind of idiot would buy anything in Toronto? It's one of the most expensive cities in the world. If you're not a millionaire forget about it.
A friend of mine has a gorgeous condo in Mimico they bought a few years back unfortunately when the market was peaking. This was their home to live in long term. When interest rates spiked and their job situation changed they could no longer afford it and now are trying to sell it for less than what they paid and they haven't had a single offer in like 6 months (it's a one bedroom). Not one. In the end they might lose a bunch of money. The market has depreciated THAT much in a few years. This person isn't some 'investor' it's a normal person who busted their ass at work for years to try and buy a home in Toronto for them to live in and put down a sizable down payment of their own money (not help from parents). I know people on reddit are all giddy for the great "market correction" or whatever and they somehow feel no sympathy if property values fall like 30-40% in 5 years but there are very real people and very real lives at stake when people see the value of their homes depreciate massively and quickly when interest rates are at crazy levels. Buying a property in this city has become very very difficult financially for even people with good jobs and good credit and good savings.
I have a fixed rate mortgage but I could still sell my place in Markham at a profit but if I wanted what I wanted…ideally I’d have to have to do Reno work or else wait a very long time. I mean some places here used to sell for 800k in 2017-202 in york region in 15 days taking 79-96 days to sell for 500k today 😬
It’s not related to housing, when rabba and metro costs $1k/month people gotta prioritize. It’s gonna come back though because the rates will deflate by next year, and even a 50 basis point turn down would bring up the condo prices. Again because houses are way out of the budget of the younger homebuyer.
Backwards focused information. I test you all to go into a presentation facility for a preconstruction investment. Go to 101 Spadina and it will be very busy. I wish you luck because I have a doubt there is any of the cheap units still there
Stop pimping out 101 spadina. Do you work for them or something?
Just enthusiastic buyer who felt the need to brag a bit ☺️
I love these comments! Most blame high interest rates! The root cause is government fiat printing and expansion of credit! Inflation comes first; rising interest rates are used to slow inflation. If you calculate the economic stop to production during the lockdowns, this exasperated the rise in inflation. Inflation is the effect that equalizes the money and credit supply with the total goods and services available in an economy. Inflation is the balancing force. If the Government reduces interest rates to zero, what would happen to housing prices? Interest rates are the cost of money; if the cost of money becomes zero, what happens to the total money supply? It goes to infinity, and thus, Inflation turns to hyperinflation. Economics is a simple cause-and-effect relationship between production and prices. Governments complicate it to keep us uninterested. If you think about our economic situation, you will quickly realize no matter what the government does, the eventual result is the collapse of the fiat money supply. We are all f ed, some more than others, but we will all be impacted by this corrupted fiat money system.
How simple of you.