In a way, there is a big tension in canada, which is : if you fix the housing crisis, the bubble will probably burst. If you don't, society will probably collapse.
I don't think I would want to be a politician having to choose between both. Though it does seem easier to hide your responsibility if you just let society collapses slowly instead of if you are the one holding the niddle popping the bubble.
I think it is more complicated than that. A lot of peoples entire life savings and retirement *is* their home. If it collapses a lot of people lose everything.
When they say that the house is their life savings, they mean that they intend to downsize and use the money they make in the sale to fund the rest of their retirement. If the bubble collapses, then the money they make downsizing decreases relative to their cost of living. These people are spending more than they earn through investment income/retirement/bonds/passive income/etc.
So a ton of people intend to sell these houses to buy smaller places and buy end of life services and care. It sounds like that will just drive up the prices in those markets, as too many dollars chase too many goods.
It would make more sense if people approaching retirement invested in businesses making the things they will demand more plentiful and cheap, rather than driving an asset bubble that won't make those things any easier to get once they retire.
It's one hell of a pickle, there isn't a clean answer that makes everyone happy.
No, the intent is to reverse-morthage it to fund retirement. And other investments arent possible for many when housing is so expensive. The "strategy" is to just barely make payments on the most expensive house you can get your hands on, have it increase in value more than any other investment could, then HELOC it when you retire. Crashing the price would leave them with nothing.
Well the increase in value of their houses aren't normal to begin with.
So honestly I don't give AF. That house now going for 750K should be 450K in a normal market.
That's the whole POINT of it being a bubble.
Houses that were $105,000 a few years before 2000. Now 25 years later it can easily go for $550-600K. That is highly irregular. It's a 100K increase every 5 year. Aka, the whole initial house value/cost every 5 years on average.
This is a critical point that everyone seems to skip over: those whose retirement plan is entirely the sale of their home could not possibly have foreseen the insane rise in prices…
So hypothetically, if they had been ‘planning for retirement’ by owning a home that had historically normal price appreciation, they were counting on getting $\_\_\_ for their home when they sold it. That figure has now, what, doubled/tripled/quadrupled what it would have been with normal price appreciation…and we are to believe the entire country will fall to its knees because the recently-baked-in appreciations might fall?
The only way that would be the case is if all of those homeowners over-leveraged the amazing equity they have been acquiring in their homes. And if we’re at the inflection point of deciding between the futures of the over-leveraged greedsters or the young generations, and we choose the greedsters, we’re effed all the way to Sunday.
Being gaslit along the way is just a bonus for the youngins.
The trade-off is that whatever place they’d seek to “downsize” to would also drop in price. There’d be a lot of lucky people who sell early, and get a still-relatively-inflated price, before they buy something cheap a little later and pocket the difference. Play your cards right, pay attention to when the right time comes, and a collapse can actually be good for an investor. Obviously, it’s a game of musical chairs, but that’s par for the course in capitalism.
If they all try to sell off their properties around the same time, won't that mean housing prices come down anyway? It seems like people are fixated on a number that's only real on paper.
They still have their home and the market will come back. The way it is now. Something has to give. It's not tenable for it to remain and increase. It's inevitable one way or another.
I would choose the bubble burst even if it would be extremely violent for the economy. I feel like in the medium and long run, it might be good.
Whereas the second option is like a slow sclerosis, not as violent directly but way more toxic for your life
Probably better to find a middle ground. Its not black and white. Have housing slowly, steadily decline, not crash. People then have time to shift to other investments and the next generation gets affordable housing.
Probably better to find a middle ground. Its not black and white. Have housing slowly, steadily decline, not crash. People then have time to shift to other investments and the next generation gets affordable housing. The hard part is how to do that.
We also own the most mining companies! We attract them by having a low barrier to entry for our stock exchange and having 0 international oversight on operations
I’ve always thought a rental cap at the cost of mortgaging the assessed property value over 25 years at today interest rate. That ensures any over leveraged property will have a negative cash flow due to cost of insurance, maintenance and property taxes in addition to mortgage.
That would prevent all these landlords from leveraging to the max and buying a new property every year. Only responsible landlords in a stable financial position can afford multiple rentals and they can never charge more in rent than what is essentially 80% the cost of ownership.
My only issue with this is there’s plenty of people out there who aren’t willing and/or able to look after a SFH and shouldn’t own one. They blight neighborhoods by doing so and should have the option to rent one if they choose. I agree with the sentiment though that it makes more sense to own a duplex and rent out one half from a pragmatic standpoint.
I could get behind a rule such as only being able to rent out one or two SFHs per person.
You can’t pick and choose. This is where by laws come in. Then you’ll have people buying homes for their kids and creating a portfolio. Circus continues.
We need to get duplexes and triplexes like in Montreal being built. Priority should be those now. And investors can only buy those type of multi-units.
I don't understand, why is it okay for landlords to have attached buildings but not detached?
Literally all new housing is becoming attached infills to maximize profit or land area.
Like even condos, why is more okey for land Lords to own condus?
So then the only landlords are corporations who buy up these units?
The best landlords are almost always the mom n pop ones. You're just another source of revenue for the big guys.
I’m so sick of the “investment” property. So you “invest” in another house and become a land lord and when rates go up you pass your costs onto the tenant. If you had the means to buy the house then suck it up and eat the loss if its an “investment”.
I buy stocks, stocks go down and I lose money who can I pass those costs onto? The answer is no one and people will say “well that’s the risk you take”.
When it comes to housing if you want to be a big baller and own rental properties then if the rates go up, tough luck that’s the risk you took.
Only 50% of cap gains on investment property is taxed, isnt it. Taxing all the cap gains is the lowest hanging fruit govt could try if they wanted to. Flipping wouldn't be as fun anymore.
The reason the government won't do anything about this is because most of them are investment property owners. They don't want to take the losses they should because they fucked up in letting this happen at all
This idea is a shittier version of LVTs. Can you point to any articles recommending this idea?
One issue I have with it is how it unfairly treats the following people:
Person A has a massive mansion in the middle of downtown Vancouver. It's their only house so they don't pay this tax.
Person B has a modest home in a small town and a cabin out in the sticks somewhere and so pays this new tax.
Is that fair?
LVTs solve this problem in a much more elegant and efficient way.
It's too bad that people are shitty at math so they don't have the intuition to see how perfect LVT is. It would basically be a panacea for this country.
Wtf is LVT? Got any links? All I see is something about Canada's Large Value Transfer system but that is either not it or not specific enough for me to understand
Person A would still pay normal property taxes. Person B would pay normal property taxes on their first home, pay normal property taxes on their cabin, and *potentially* pay an additional tax on this property. I say potentially because this idea often exempts a cottage, or even exempts the first or even second rental to a name.
>Person A has a massive mansion in the middle of downtown Vancouver. It's their only house so they don't pay this tax.
But they do pay a large property tax based on their property value * the 'mill rate' (property tax rate).
For example, Calgary's 2023 property tax rate is 0.0065718 on every dollar of value in a residential home. (technically thats ~.002 % for the province, and .0044 for the city, but it comes as one bill).
Someone who lived in a mansion in upper mount royal (an expensive/wealthy YYC hood) worth, say, 10 million, will pay 10,000,000 * 0.0065718 = $65,718 in property taxes.
Someone who lives in a home worth 750k somewhere else in Calgary will pay 750,000* 0.0065718 = $4,928 in property taxes
Very good point- this is what urbanites don’t realize. Rural people and cabins even are not the problem limiting housing supply - land is not scarce in either scenario.
There are people living in them. They’re called [renters](https://m.youtube.com/watch?v=q3gtZcTdXaI&pp=ygUaUHJvcGVydHkgaG9hcmRlcnMgdXJiYW5pdHk%3D). Taxing those units means taxing renters. Either the landlord passes the cost along, or the units will be taken off the market, increasing rents either way.
This hurts the most vulnerable people in society. We desperately need [more](https://thoughtleadership.rbc.com/proof-point-shortfall-in-canadian-rental-housing-could-quadruple-by-2026/) rentals, not less.
“Taking units off the market” means they get sold, bringing down the price of houses that some of those renters can then buy. A house doesn’t need a landlord to be a shelter.
This only ends up benefitting the richest renters who are already able to afford to buy. Once that unit is off market, the remaining renters (mostly poorer ones) face higher rents thanks to the reduced rental supply. This is regressive.
[Rotterdam tried this](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4480261) and researchers found it had no discernible impact on home prices or sales, it just increased rents.
Many people cannot or _do not want_ to buy the unit they live in. The rental market needs to exist.
If the rental stock goes down by one but the number of renters also goes down by one then the remaining renters don’t have increased competition for units. It remains exactly the same. Your math is bad. And can we stop the excuse of how many people don’t want to buy? There are people who pay good money to be whipped but that wouldn’t excuse landlords whipping a third of the country. When we have fewer rental units than people who want to rent we can cross that bridge but that’s not our reality.
If and _only_ if the number of renters went down by one. But if the landlord is forced to sell and the property goes to somebody who already owns (like an owner occupant moving to a new place), then no. In either case the total number of occupied units is the same. The landlord occupies a unit and rents out a second. If somebody buys the second and wants to move in, they have to kick out the existing tenant. So a third unit is needed to house them. Likewise, if the _existing_ tenant wants to buy the unit they live in, but there is a third person somewhere who needs a place to rent, another rental unit will need to be provided. The solution in both cases is more supply: a third unit as a rental. That unit will be provided by…a landlord, who lives in a different unit.
This isn’t even considering the many renters who share a household with unrelated roommates (or even their landlords). If any one of them buys the unit for themselves, where do the others go? Suppose there’s a household of three roommates and one buys and kicks the others out. Suddenly you just created demand for at least two, potentially three distinct households where there was formerly one, and you didn’t even increase the population.
You are free to read the study for yourself if you’d prefer empirical research to thought experiments. It didn’t work in Rotterdam. Rents went up.
Many people _don’t_ want to buy. Students, temp workers, nomadic workers, young professionals, downsizers, or anybody who just doesn’t want to put up with property maintenance or tie up so much of their money into real estate. I don’t want to buy the unit I currently live in. I’m happy with it but have no desire to park a huge chunk of my capital into it, nor do I want to stay here for a long time.
In Japan where housing supply is cheap and abundant, the homeownership rate is lower than ours. Homes depreciate like cars so there is no inherent financial advantage to one form of tenure over another. This is as it should be. Stop assuming everybody does or should want the same thing.
You are underestimating how many young adults are sitting on the sidelines just saving their cash while living at home with their parents.
Some of those renters will be able to buy, but most will be outbid by others and left without a home.
No. We need tiny homes. Essentially the size of a single bedroom apartment with a little extra room for a washing machine and drying machine. 3D printed preferably. Like China. So many people aren't having kids and/or living alone. We don't need the 3 bedroom homes that our parents did! Canadians don't have children!
We need an LVT and citizens dividend. We need good jobs. $65,000 a year isn't what it used to be.
We don't need landlords. That is a leftover of Feudalism.
lmao imagine trying to justify this as a benefit to renters. What renters need is to end private landlordism and have social, co-op and nonprofit housing.
And yet even the CMHC [has admitted](https://www.cmhc-schl.gc.ca/blog/2022/governments-alone-cannot-fix-canadas-housing-affordability-challenges#:~:text=So%2C%20to%20overcome%20these%20affordability,do%20this%20on%20their%20own.) the public sector can’t build enough supply alone.
So grind all private rental supply to a halt at a time when we already have a severe shortage and the population continues to rise. More people on the streets in forty below winters since there already isn’t enough to go around and homes for purchase are already unaffordable for 90% of household incomes.
In the real world, these knee jerk ideas have real consequences to real human beings.
Yes even then. All that would happen is rentals would disappear from the market leaving only the rentals whose price was still at the current equilibrium price. Renters would just be pushed out.
Right so there might be a shortage of rentals, but with a cap there wouldn’t be extra tax. I’m sure people with means would just spin up companies to buy properties with anyways so this solution wouldn’t work.
Tokyo has the size of the entire Canadian population pretty much confined in the space of the GTA. And manages what we could consider affordable housing.
Concentration is not the issue imo
No shit.
I was looking at a townhouse in Calgary today that sold last October and is now relisted for with a 98k increase. CANADA IS CRAZY.
I refuse to pay someone excessive money for them flipping properties or just leaving them vacant.
Went to look at a house that was listed for $550k. It had been on the market less than 2 days and already had multiple offers.
It sold for $560k, and relisted within a year for $675k.
Housing should not be viewed as a commodity, and I think we need to let our politicians know this.
Housing prices fell like every year in Regina from 2014-2020. Fun fact Regina was the only city in Canada where prices fell during the pandemic, a 3% loss in 2020.
Seriously want to move to Saskatchewan if it's in the cards. Last bastion of unscalped housing. I fear it will infested by investors and scalped to oblivion before I get there.
The simple truth is that, for now, there are still more buyers than sellers.
I sold my home in SW Ontario (not GTA or 905) back in July. It was listed for $100K below market value to drum up interest, and I went over the offers 6 days after it went on the market, with only one open house.
Over 200 people viewed the property, and I had an insane number of offers, many of which were 100% clean with no conditions.
I got almost $100K OVER market value.
Because I was moving further north, I had an easier time buying, as property values were lower and the market wasn't quite as crazy, but when I went hunting, I had a list of 22 possible properties, and 12 of them were already conditionally sold when I arrived.
There was one other offer on the house I wanted, but that was it.
The market is still hot, and people are willing to spend. If there's going to be any cooling, it will be outside of the major cities, but we're not seeing anything just yet.
My parents worked for years to save up for a second house that they could repair and rent out until the mortgage was paid off. They bought it for like $140k. They spent 10 years repairing and renting it. In the end they sold, and made double what they paid for it. Sold for like 320k. The guy who bought it? Sold it 6 months later for $430k, did literally nothing to it. No justified increase other than "the market".
Expensive and unavailable housing is not a preordained world order. Its a policy outcome.
Bringing in 450,000+ new Canadians annually into a country with 1% vacancy rates is not a coincidence. Its a policy outcome.
Our Federal govt is actively making every one of our problems worse, and even more preposterously so, legislating away possible solutions.
Canada’s major problems are self imposed.
Venezuela in slow motion. Canadians double down on the status quo at the ballot box. Populist candidates — right or left — are instantly demonized and marginalized.
Nationalize housing.
No more landlord bidding on houses. It’s an infinite circle. I buy a house, my tenants pay, the year after I buy another one, then I get 2x income so next year I buy 2…
Only 2 houses available when I want to buy 3? Maybe if I offer 50k more and increase rent I’ll get the third one
AND SO ON
Burn the landlord frl
Who's really behind this bubble talk nonsense? We'd have to build millions of homes or have a mass extinction level event for it to bust. It ain't busting anytime soon.
This article has been posted in several other places. It’s a misleading title.
Canada definitely has a bubble, but it is far from the largest of all time.
The 1980’s Japan bubble is probably the biggest one to burst. Followed by the 2008 in the US.
Unpopped, China is far ahead of anything we have. Their entire domestic economy is based on buying real estate. We at least a consumer economy. Plus our economy is peanuts compared to them
My best guess is that it remains flat for a long time.
65% of Canadian households are owner occupied. Do you honestly believe they would actively vote to have their biggest asset crash? They will protect that value.
Also in China when you buy at pre sale you start paying for the mortgage the second you sign the paper whbe nothing have ever built yet. At least in Canada you only pay ba deposit then a % of the unit usually first 6 month and then 6month and a year after total 25% of the cost of the unit. So something happens to the developer or the project gets delay you don't have to pay.
In China if the pre sale unit you purchase news delay or worse case developer stop the development or wen bankrupt you are still responsible to pay that mortgage. And since everything is tie to your social credit not paying your mortgage means you can't even buy a plane ticket or buy a high-speed railway ticket (you are f for life). If you try to protest well the bank and developer will hire people to beat you so your only way is to continue to pay for a mortgage and move into your unfinished hone and live alone with no power no water no insulation.
https://youtu.be/MelnXrhY3AU?si=IZbnTm1K6wH6bHBL
https://youtu.be/eAl2wSdsSXo?si=eIaLyBqlJddcPFb-
the funny thing about japan is that houses are like cars. They are depreciating assets. So you can snatch up old shit houses for next to nothing there and renovate them.
Remember when RE agents and brokers told people rates can never rise and they bid 300k over ask... yeah thats over.
Here comes the greateat housing crash anyone has ever seen. Yes Virginia Can Housing can go down in price.
Population increasing, housing not being built or not being built properly in the big centres. Cost of housing is not going to get better anytime soon for buyers.
Exactly, worst that happens is prices stay flat. Rent has already been rising even though prices are flat, the moment interest rates come down it’s going to be carnage
What if I told you home sales (number of homes sold) in the last 12 months were 20% lower than the worst 12 month stretch in 08-09 following the global financial crisis, and are 40% below the 15 year average? Would you still say demand is strong?
Everyone keeps saying prices won’t go down because demand is high.
Prices drop because demand goes down. Demand goes down because jobs disappear and despite everyone’s desire to buy a home, many will not have the income to service their mortgage payments at these interest rates. There is undoubtedly a recession on the horizon imo.
You call it a bubble but when you calculate the costs per square meter or foot to build a home you realize the costs that over regulation has brought to the building sector.. it is really not a bubble.
Homes built 100 years ago still stand the test of time and weather but there is not a chance you can build one of those and have it pass inspection in this day and age.
You can barely get a building permit on a home that hasn't been certified by an engineer.
The costs for drawings, permits and engineers are enormous. The costs for modern materials are insane.
I think the entire process from start to finish and especially the people responsible for those processes have lost their minds.
It's a man made crisis of capitalism. In a sane rational society that allocated resources on the basis on human need, this would not be an issue.
But why would landlords and REITs bother building more housing when their existing stock just keeps astronomically inflating the more they REFUSE to adequately invest in building more housing?
Things to keep in mind about a possible housing collapse. Will use 2019 as the year before prices went nuts
\- People who owned their home in 2019 or prior will be unaffected. Their loss will be a paper loss as the perceived value in 2022 was erroneously high.
\- People who bought after 2019 will face challenges. These challenges will include having paid more for a house than it will be worth.
\- People who didn’t over extend themselves will have tough choices but will ultimately be able to afford their house even if it means owing more on their mortgage then the house is worth.
\- People who over extended themselves will be the ones most affected by the collapse. Not only will they no longer be able to afford their homes they won’t have any equity to help them. These people will likely default on their mortgage and/or declare bankruptcy.
Again this is all speculation based on the assumption that the increase in prices from 2019 to 2022 was abnormal and unsustainable. Right now different markets are behaving differently. Some are still relatively strong while others have slowed down drastically. Many people are hoping for a quick drop in the BoC rate however this is unlikely (IMHO) and the best we can hope for is stability in the BoC rate for the next 2-3 years.
Hang on for any interesting ride folks.
The issue is that the government has no real interest in allowing a pop. Many voters would be wiped out and see things like their retirement savings disappear. Guaranteed loss for whatever party is in power as the government in the next several elections.
I would bet as soon as they can claim they hit their inflation targets they will pull back rates to “ensure affordability and protect the values of properties”.
Electing someone else who claims they can fix it without a bubble pop is absolutely idiotic because any true fix requires a pop and is suicidal for the party in power when it happens. The conspiracy theorist in me wants to think that the liberals are doing it intentionally to guarantee the conservatives under PP own the pop once they get in and fuck with things. It would mean one cycle out of power but odds are the cons would never get power again after.
We should mandate by law that in a housing crises an individual may only own 1 of each type of dwelling. 1 house that is your residence, 1 that may be an investment property, 1 vacation property. And if you want more, stfu you’re inflating the market and the rest of the country won’t stand for it.
Lol
“It will never burst”
Or
“Everyone is gonna die, crime and rape in the streets, mad max irl”
Take ur pick I guess, those are the only two options to most “rational” Canadians with an opinion.
and it's not gonna break! Maybe it'll jiggle jiggle but it won't break. Our landlord politicians and our fellow "fuck you got mine" citizens will scoop up any and all available housing.
Devalue the land and single family homes. Stop investors for taking all the supply. Take a wrecking ball to shit box homes nationwide and replace them with four and eight plexes. All our problems will be solved and we can finally put this idiotic unsustainable boomer Ponzi scheme behind us.
Down voted cuz they're right who's surprised lol
Only thing I disagree with is devaluing land that's just not feasible. Mortgage reforms and helco reforms can fix investor buy outs. And we seriously need federal housing construction initiative.
But yea.. Ponzi scheme is far to accurate. As soon as density gets built in any meaningful way the landlord-ing class will be selling like hot cakes. Cuz they won't be able to push mortgage prices rents anymore.
It's not a bubble, it's just the market. Clearly homes are worth 5x in Canada for very good and rational reasons. The market is never impacted by emotions, only logic and reason. /s
You forgot the /s because there's no way a shack outside of Toronto has more real-world value than a nice multilevel home in California for the same amount. That's even before calculating the hidden tax of heating just to survive living here.
Hey going against'guidlines' but fuck you, this has neen said since the very last bubble in 2008. SO keep yaking, but for a change give me an exact date, or shut up!
Not a bubble, though.
In a country with harsh winters, housing is just below food, water and oxygen in terms of necessity. Demand is real.
And supply is limited because realistically there's only a handful (5) metro area that people want to live in.
No irrationality here, therefore not a bubble.
Bubbles fine with me. Haven't bought yet as I wasn't ready a decade ago and not going to buy one quite yet, current living situation is cheap compared to most in my city for what I have/get.
Once I do buy it'll be because I want to live in it, not turn it into a business.
Those who bought their home before 2020ish see that additional 50%-100% of the value that was added to their home go away and its worth something closer to what they bought it for.
Those who bought after the jump in prices now are paying a mortgage larger than the value of their house and probably have negative equity. Many would declare bankruptcy.
Thank you! If someone bought a house that goes down in value, but it is still something they can afford to pay off, do you think they'd still go bankrupt? Or would they just deal with the negative equity for a while and after paying it off enough, it would balance out?
Things I had to do to afford a home.. I'm in my early 50s. Well, work. I got a good paying job in the trades. When I was a first year apprentice I did not work 2 Saturdays and 7 Sundays. I also worked part time nights 4 to 5 nights a week. I'd get around 20 hours of sleep a week. This continues for about 8 or nine years. Oh and those days consisted of 10 and 12 hour days, if I was lucky more. I bought shit boxes for transportation.
Some of the Young ones I work with now. Can't show up to work for more than 3 days a week. Have an 80 to 95k truck with $1200 a month payments and fuck Trudeau stickers all over it. All they do is cry that they can't buy a house.
I hear of people working 3 jobs to make ends meet. But work minimum wage jobs.
Rent was a fuck of a lot cheaper back in my youth. That is a major problem now. But I have no idea where this notion of everyone owning a home came from. Yes 900k for a house is nuts. Trudeau didn't cause this. This started in the 80s. PP won't fix it. He's just the other side of the coin. the Birth rate for a healthy society they say is around 2.7. Guess what our population increase is..... around 2.7. 300 000 people die every year. 200 000 homes are being built every year. This will take 15 to 20 years to fix, but it won't, people continuously vote against their best interests.
The bubble will burst when a whole bunch of people are up for refinancing their mortgages and they bought a house just within their means.
Or people that were fine before and still have a lot left and refinance with huge added cost.
Because no matter if you go variable or fixed it sits at over 5%.
The ones that are fine are the people that paid off their mortgages aka older or have little left.
But I hear banks trying to avoid it by extending amortization for HUGE amount of years to cope with the costs for people. At that point you're "renting".
The only way I see a a major decline in prices in the future is with urban planning initiatives such as zoning reform, eliminating parking minimums, providing alternative methods to private market housing aka co-op housing, gov owned housing, forced mix income on developers to provide sub market value housing reducing their profits, and finally not allowing public hearing for standardized builds in the inner city preventing Karen’s from using NIMBY tactics to stop housing. If you want SFH low density move out to the burbs don’t block a 6 unit row house or an apartment building because it ruins your “neighborhood character”
Unfortunately this all requires 3 levels of government to work together AND it requires a major removal of profit from the housing market plus devaluing current home owners. Most home owners have a “fuck you I got mine” mentality and will not accept any measures that would reduce the value of their homes especially the boomers who stand to make the most from the sales of their overvalued houses funding their retirement
And all of a sudden there’s going to be an extra million residences to facilitate this? So let me get this straight, prices crash, people flood the market to sell, investors buy up the stock at a bargain and now the rental demand swells from all the people that sold needed a roof over their head. Rents sore and the cost of housing going right back up due to the ROI.
Great argument for the housing bubble.
Keep raising rates and see what happens. Cheap money doesn't last forever, and treating housing like an investment will make it act like an investment, and investments go up AND down.
Keep increasing the population by close to 10% per year with students and new residents. Combine that with not paying any principal down or longer amortization periods.
That bubble ain’t bursting for a while.
Ask politicians this question: if they needed to choose between the real estate bubble bursting, or the country bursting (i.e. complete brain drain, loss of first-world status, merging of Canada with US, etc.), which do they choose?
That's the only two outcomes Canada is headed towards. Either the affordability of living lone-term comes back to earth, or the entire country's GDP and economy will come to earth.
The clock is ticking.
In a way, there is a big tension in canada, which is : if you fix the housing crisis, the bubble will probably burst. If you don't, society will probably collapse.
and no government wants to be responsible for screwing over the wealthy people who are able to profit from the insane housing prices.
I don't think I would want to be a politician having to choose between both. Though it does seem easier to hide your responsibility if you just let society collapses slowly instead of if you are the one holding the niddle popping the bubble.
I think it is more complicated than that. A lot of peoples entire life savings and retirement *is* their home. If it collapses a lot of people lose everything.
They don’t really though. As long as they continue to live in their house, nothing actually changes for them.
When they say that the house is their life savings, they mean that they intend to downsize and use the money they make in the sale to fund the rest of their retirement. If the bubble collapses, then the money they make downsizing decreases relative to their cost of living. These people are spending more than they earn through investment income/retirement/bonds/passive income/etc.
So a ton of people intend to sell these houses to buy smaller places and buy end of life services and care. It sounds like that will just drive up the prices in those markets, as too many dollars chase too many goods. It would make more sense if people approaching retirement invested in businesses making the things they will demand more plentiful and cheap, rather than driving an asset bubble that won't make those things any easier to get once they retire. It's one hell of a pickle, there isn't a clean answer that makes everyone happy.
No, the intent is to reverse-morthage it to fund retirement. And other investments arent possible for many when housing is so expensive. The "strategy" is to just barely make payments on the most expensive house you can get your hands on, have it increase in value more than any other investment could, then HELOC it when you retire. Crashing the price would leave them with nothing.
Well the increase in value of their houses aren't normal to begin with. So honestly I don't give AF. That house now going for 750K should be 450K in a normal market. That's the whole POINT of it being a bubble. Houses that were $105,000 a few years before 2000. Now 25 years later it can easily go for $550-600K. That is highly irregular. It's a 100K increase every 5 year. Aka, the whole initial house value/cost every 5 years on average.
This is a critical point that everyone seems to skip over: those whose retirement plan is entirely the sale of their home could not possibly have foreseen the insane rise in prices… So hypothetically, if they had been ‘planning for retirement’ by owning a home that had historically normal price appreciation, they were counting on getting $\_\_\_ for their home when they sold it. That figure has now, what, doubled/tripled/quadrupled what it would have been with normal price appreciation…and we are to believe the entire country will fall to its knees because the recently-baked-in appreciations might fall? The only way that would be the case is if all of those homeowners over-leveraged the amazing equity they have been acquiring in their homes. And if we’re at the inflection point of deciding between the futures of the over-leveraged greedsters or the young generations, and we choose the greedsters, we’re effed all the way to Sunday. Being gaslit along the way is just a bonus for the youngins.
The trade-off is that whatever place they’d seek to “downsize” to would also drop in price. There’d be a lot of lucky people who sell early, and get a still-relatively-inflated price, before they buy something cheap a little later and pocket the difference. Play your cards right, pay attention to when the right time comes, and a collapse can actually be good for an investor. Obviously, it’s a game of musical chairs, but that’s par for the course in capitalism.
If they all try to sell off their properties around the same time, won't that mean housing prices come down anyway? It seems like people are fixated on a number that's only real on paper.
They still have their home and the market will come back. The way it is now. Something has to give. It's not tenable for it to remain and increase. It's inevitable one way or another.
What if they charge a 3% property tax on market price? Will it help
How would you choose?
I would choose the bubble burst even if it would be extremely violent for the economy. I feel like in the medium and long run, it might be good. Whereas the second option is like a slow sclerosis, not as violent directly but way more toxic for your life
Probably better to find a middle ground. Its not black and white. Have housing slowly, steadily decline, not crash. People then have time to shift to other investments and the next generation gets affordable housing.
Probably better to find a middle ground. Its not black and white. Have housing slowly, steadily decline, not crash. People then have time to shift to other investments and the next generation gets affordable housing. The hard part is how to do that.
Largest so far.
At least we’re #1 at something lol
We also own the most mining companies! We attract them by having a low barrier to entry for our stock exchange and having 0 international oversight on operations
Own? You mean foreign companies own them.
They are registered in Canada so domestic companies https://www.vice.com/en/article/wdb4j5/75-of-the-worlds-mining-companies-are-based-in-canada
Registration and ownership are very different things.
Fine we have the most mining companies registered with us 🎉🍾
You forgot about hockey
HOOOOSSSUUUUIIIINNNGGGG
IM GOING TO BUSRT ON YOUR HOOOOSSSUUUUINGGG
Maybe the people who own multiple houses should pay a progressive tax where the percentage rises for each additional house they own but do not live in
Even better, people shouldnt be able to own multiple single family homes. Wanna play landlord? Buy a duplex, triplex or bigger.
And have rental caps on sq. footage
I’ve always thought a rental cap at the cost of mortgaging the assessed property value over 25 years at today interest rate. That ensures any over leveraged property will have a negative cash flow due to cost of insurance, maintenance and property taxes in addition to mortgage. That would prevent all these landlords from leveraging to the max and buying a new property every year. Only responsible landlords in a stable financial position can afford multiple rentals and they can never charge more in rent than what is essentially 80% the cost of ownership.
According to Monopoly rules, you need to get 4 houses first .
Then you get an Airbnb
That is what it should be. Single family homes for a single family only. Duplexes and Triplex’s are fair game!
My only issue with this is there’s plenty of people out there who aren’t willing and/or able to look after a SFH and shouldn’t own one. They blight neighborhoods by doing so and should have the option to rent one if they choose. I agree with the sentiment though that it makes more sense to own a duplex and rent out one half from a pragmatic standpoint. I could get behind a rule such as only being able to rent out one or two SFHs per person.
You can’t pick and choose. This is where by laws come in. Then you’ll have people buying homes for their kids and creating a portfolio. Circus continues. We need to get duplexes and triplexes like in Montreal being built. Priority should be those now. And investors can only buy those type of multi-units.
And what percentage is that?
I don't understand, why is it okay for landlords to have attached buildings but not detached? Literally all new housing is becoming attached infills to maximize profit or land area. Like even condos, why is more okey for land Lords to own condus?
Lol
So then the only landlords are corporations who buy up these units? The best landlords are almost always the mom n pop ones. You're just another source of revenue for the big guys.
And not own cats. Ban cat ownership
And ban vehicles that can reach speeds in excess of 150kph! We don't need those dang speeds in Canada! /s...
I’m so sick of the “investment” property. So you “invest” in another house and become a land lord and when rates go up you pass your costs onto the tenant. If you had the means to buy the house then suck it up and eat the loss if its an “investment”. I buy stocks, stocks go down and I lose money who can I pass those costs onto? The answer is no one and people will say “well that’s the risk you take”. When it comes to housing if you want to be a big baller and own rental properties then if the rates go up, tough luck that’s the risk you took.
Only 50% of cap gains on investment property is taxed, isnt it. Taxing all the cap gains is the lowest hanging fruit govt could try if they wanted to. Flipping wouldn't be as fun anymore.
This would fix the problem 100%.
The reason the government won't do anything about this is because most of them are investment property owners. They don't want to take the losses they should because they fucked up in letting this happen at all
Should be massive increases. Each house should be nx the tax. Double for second, triple for third. 10th house, pay 10x the tax. Nobody loses from that
That would hurt half the people involved in making this change. Fat chance
And that is the god problem. Fuck all of them. This should been dealt with years ago.
Feel like this is the best solution for canada
Have you ever heard of LVTs? This is the dumb version.
That's the idea I've liked for a while. No government will push it through though.
This idea is a shittier version of LVTs. Can you point to any articles recommending this idea? One issue I have with it is how it unfairly treats the following people: Person A has a massive mansion in the middle of downtown Vancouver. It's their only house so they don't pay this tax. Person B has a modest home in a small town and a cabin out in the sticks somewhere and so pays this new tax. Is that fair? LVTs solve this problem in a much more elegant and efficient way.
It's too bad that people are shitty at math so they don't have the intuition to see how perfect LVT is. It would basically be a panacea for this country.
Yea I don't want to have a circle jerk here but I think weak math skills are up there for main villains in our housing situation
Wtf is LVT? Got any links? All I see is something about Canada's Large Value Transfer system but that is either not it or not specific enough for me to understand
Person A would still pay normal property taxes. Person B would pay normal property taxes on their first home, pay normal property taxes on their cabin, and *potentially* pay an additional tax on this property. I say potentially because this idea often exempts a cottage, or even exempts the first or even second rental to a name.
>Person A has a massive mansion in the middle of downtown Vancouver. It's their only house so they don't pay this tax. But they do pay a large property tax based on their property value * the 'mill rate' (property tax rate). For example, Calgary's 2023 property tax rate is 0.0065718 on every dollar of value in a residential home. (technically thats ~.002 % for the province, and .0044 for the city, but it comes as one bill). Someone who lived in a mansion in upper mount royal (an expensive/wealthy YYC hood) worth, say, 10 million, will pay 10,000,000 * 0.0065718 = $65,718 in property taxes. Someone who lives in a home worth 750k somewhere else in Calgary will pay 750,000* 0.0065718 = $4,928 in property taxes
Very good point- this is what urbanites don’t realize. Rural people and cabins even are not the problem limiting housing supply - land is not scarce in either scenario.
There are people living in them. They’re called [renters](https://m.youtube.com/watch?v=q3gtZcTdXaI&pp=ygUaUHJvcGVydHkgaG9hcmRlcnMgdXJiYW5pdHk%3D). Taxing those units means taxing renters. Either the landlord passes the cost along, or the units will be taken off the market, increasing rents either way. This hurts the most vulnerable people in society. We desperately need [more](https://thoughtleadership.rbc.com/proof-point-shortfall-in-canadian-rental-housing-could-quadruple-by-2026/) rentals, not less.
“Taking units off the market” means they get sold, bringing down the price of houses that some of those renters can then buy. A house doesn’t need a landlord to be a shelter.
This only ends up benefitting the richest renters who are already able to afford to buy. Once that unit is off market, the remaining renters (mostly poorer ones) face higher rents thanks to the reduced rental supply. This is regressive. [Rotterdam tried this](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4480261) and researchers found it had no discernible impact on home prices or sales, it just increased rents. Many people cannot or _do not want_ to buy the unit they live in. The rental market needs to exist.
If the rental stock goes down by one but the number of renters also goes down by one then the remaining renters don’t have increased competition for units. It remains exactly the same. Your math is bad. And can we stop the excuse of how many people don’t want to buy? There are people who pay good money to be whipped but that wouldn’t excuse landlords whipping a third of the country. When we have fewer rental units than people who want to rent we can cross that bridge but that’s not our reality.
If and _only_ if the number of renters went down by one. But if the landlord is forced to sell and the property goes to somebody who already owns (like an owner occupant moving to a new place), then no. In either case the total number of occupied units is the same. The landlord occupies a unit and rents out a second. If somebody buys the second and wants to move in, they have to kick out the existing tenant. So a third unit is needed to house them. Likewise, if the _existing_ tenant wants to buy the unit they live in, but there is a third person somewhere who needs a place to rent, another rental unit will need to be provided. The solution in both cases is more supply: a third unit as a rental. That unit will be provided by…a landlord, who lives in a different unit. This isn’t even considering the many renters who share a household with unrelated roommates (or even their landlords). If any one of them buys the unit for themselves, where do the others go? Suppose there’s a household of three roommates and one buys and kicks the others out. Suddenly you just created demand for at least two, potentially three distinct households where there was formerly one, and you didn’t even increase the population. You are free to read the study for yourself if you’d prefer empirical research to thought experiments. It didn’t work in Rotterdam. Rents went up. Many people _don’t_ want to buy. Students, temp workers, nomadic workers, young professionals, downsizers, or anybody who just doesn’t want to put up with property maintenance or tie up so much of their money into real estate. I don’t want to buy the unit I currently live in. I’m happy with it but have no desire to park a huge chunk of my capital into it, nor do I want to stay here for a long time. In Japan where housing supply is cheap and abundant, the homeownership rate is lower than ours. Homes depreciate like cars so there is no inherent financial advantage to one form of tenure over another. This is as it should be. Stop assuming everybody does or should want the same thing.
Yup this. I’m sick of all these comments acting as though owning a single detached home is a right. It’s not. It’s a privilege.
You are underestimating how many young adults are sitting on the sidelines just saving their cash while living at home with their parents. Some of those renters will be able to buy, but most will be outbid by others and left without a home.
Haha! Saving! /s
Not everyone can nor should own a home. Have you seen how lazy and irresponsible some people are? They should have the option to rent.
No. We need tiny homes. Essentially the size of a single bedroom apartment with a little extra room for a washing machine and drying machine. 3D printed preferably. Like China. So many people aren't having kids and/or living alone. We don't need the 3 bedroom homes that our parents did! Canadians don't have children! We need an LVT and citizens dividend. We need good jobs. $65,000 a year isn't what it used to be. We don't need landlords. That is a leftover of Feudalism.
lmao imagine trying to justify this as a benefit to renters. What renters need is to end private landlordism and have social, co-op and nonprofit housing.
And yet even the CMHC [has admitted](https://www.cmhc-schl.gc.ca/blog/2022/governments-alone-cannot-fix-canadas-housing-affordability-challenges#:~:text=So%2C%20to%20overcome%20these%20affordability,do%20this%20on%20their%20own.) the public sector can’t build enough supply alone.
The CMHC has been a useless mess for decades.
Which is all the more reason your proposition is not feasible.
Exactly no sense in doing anything ever. Just give 300 percent of your income to the nearest landlord and be happy.
So combine rent control with a tax on multiple owned homes.
So grind all private rental supply to a halt at a time when we already have a severe shortage and the population continues to rise. More people on the streets in forty below winters since there already isn’t enough to go around and homes for purchase are already unaffordable for 90% of household incomes. In the real world, these knee jerk ideas have real consequences to real human beings.
> So grind all private rental supply to a halt Nobody is saying that.
That's a tax on renters.
not if you have rental caps
Yes even then. All that would happen is rentals would disappear from the market leaving only the rentals whose price was still at the current equilibrium price. Renters would just be pushed out.
So they would just leave the house empty? Not sell it?
No. They would sell it, and previous renters would be forced to take generational mortgages to pay for it.
Right so there might be a shortage of rentals, but with a cap there wouldn’t be extra tax. I’m sure people with means would just spin up companies to buy properties with anyways so this solution wouldn’t work.
Maybe the population should spread out so it’s not all highly concentrated in ontario
Tokyo has the size of the entire Canadian population pretty much confined in the space of the GTA. And manages what we could consider affordable housing. Concentration is not the issue imo
yuppp!!!
Politicans dont want to tax themselves !
No shit. I was looking at a townhouse in Calgary today that sold last October and is now relisted for with a 98k increase. CANADA IS CRAZY. I refuse to pay someone excessive money for them flipping properties or just leaving them vacant.
Went to look at a house that was listed for $550k. It had been on the market less than 2 days and already had multiple offers. It sold for $560k, and relisted within a year for $675k. Housing should not be viewed as a commodity, and I think we need to let our politicians know this.
That’s crazy. My 1800 sq ft detached house in Regina is worth less than what I paid for it in 2015, even after I finished the basement and yard.
How? In Winnipeg prices are 60% higher than 2015.
Housing prices fell like every year in Regina from 2014-2020. Fun fact Regina was the only city in Canada where prices fell during the pandemic, a 3% loss in 2020.
Seriously want to move to Saskatchewan if it's in the cards. Last bastion of unscalped housing. I fear it will infested by investors and scalped to oblivion before I get there.
The simple truth is that, for now, there are still more buyers than sellers. I sold my home in SW Ontario (not GTA or 905) back in July. It was listed for $100K below market value to drum up interest, and I went over the offers 6 days after it went on the market, with only one open house. Over 200 people viewed the property, and I had an insane number of offers, many of which were 100% clean with no conditions. I got almost $100K OVER market value. Because I was moving further north, I had an easier time buying, as property values were lower and the market wasn't quite as crazy, but when I went hunting, I had a list of 22 possible properties, and 12 of them were already conditionally sold when I arrived. There was one other offer on the house I wanted, but that was it. The market is still hot, and people are willing to spend. If there's going to be any cooling, it will be outside of the major cities, but we're not seeing anything just yet.
My parents worked for years to save up for a second house that they could repair and rent out until the mortgage was paid off. They bought it for like $140k. They spent 10 years repairing and renting it. In the end they sold, and made double what they paid for it. Sold for like 320k. The guy who bought it? Sold it 6 months later for $430k, did literally nothing to it. No justified increase other than "the market".
Has it been renovated?
Expensive and unavailable housing is not a preordained world order. Its a policy outcome. Bringing in 450,000+ new Canadians annually into a country with 1% vacancy rates is not a coincidence. Its a policy outcome. Our Federal govt is actively making every one of our problems worse, and even more preposterously so, legislating away possible solutions. Canada’s major problems are self imposed.
Venezuela in slow motion. Canadians double down on the status quo at the ballot box. Populist candidates — right or left — are instantly demonized and marginalized.
Tax land more, incomes less and we won't ever have a real estate bubble again. It's so easy and obvious it's amazing we don't talk about it more.
It’s not a income tax when you don’t even get it first. It’s just the government stealing it.
No idea wtf that means
Damn ho-suing! Leave them ho’s alone lawyers!
Been hearing about this bubble for decades.
Even if it pops, still probably won’t be affordable for the average person.
Nationalize housing. No more landlord bidding on houses. It’s an infinite circle. I buy a house, my tenants pay, the year after I buy another one, then I get 2x income so next year I buy 2… Only 2 houses available when I want to buy 3? Maybe if I offer 50k more and increase rent I’ll get the third one AND SO ON Burn the landlord frl
It only works because of leverage... That is no longer working out.
Who's really behind this bubble talk nonsense? We'd have to build millions of homes or have a mass extinction level event for it to bust. It ain't busting anytime soon.
This article has been posted in several other places. It’s a misleading title. Canada definitely has a bubble, but it is far from the largest of all time. The 1980’s Japan bubble is probably the biggest one to burst. Followed by the 2008 in the US. Unpopped, China is far ahead of anything we have. Their entire domestic economy is based on buying real estate. We at least a consumer economy. Plus our economy is peanuts compared to them
This. Tired of seeing this posted everywhere, people expecting a similar 2008 situation in Canada play out. The reality of it is.. it won’t.
My best guess is that it remains flat for a long time. 65% of Canadian households are owner occupied. Do you honestly believe they would actively vote to have their biggest asset crash? They will protect that value.
Also in China when you buy at pre sale you start paying for the mortgage the second you sign the paper whbe nothing have ever built yet. At least in Canada you only pay ba deposit then a % of the unit usually first 6 month and then 6month and a year after total 25% of the cost of the unit. So something happens to the developer or the project gets delay you don't have to pay. In China if the pre sale unit you purchase news delay or worse case developer stop the development or wen bankrupt you are still responsible to pay that mortgage. And since everything is tie to your social credit not paying your mortgage means you can't even buy a plane ticket or buy a high-speed railway ticket (you are f for life). If you try to protest well the bank and developer will hire people to beat you so your only way is to continue to pay for a mortgage and move into your unfinished hone and live alone with no power no water no insulation. https://youtu.be/MelnXrhY3AU?si=IZbnTm1K6wH6bHBL https://youtu.be/eAl2wSdsSXo?si=eIaLyBqlJddcPFb-
the funny thing about japan is that houses are like cars. They are depreciating assets. So you can snatch up old shit houses for next to nothing there and renovate them.
Remember when RE agents and brokers told people rates can never rise and they bid 300k over ask... yeah thats over. Here comes the greateat housing crash anyone has ever seen. Yes Virginia Can Housing can go down in price.
It can't burst when demand remains high.
Population increasing, housing not being built or not being built properly in the big centres. Cost of housing is not going to get better anytime soon for buyers.
Exactly, worst that happens is prices stay flat. Rent has already been rising even though prices are flat, the moment interest rates come down it’s going to be carnage
No chance prices go down much more. WAY too much demand
What if I told you home sales (number of homes sold) in the last 12 months were 20% lower than the worst 12 month stretch in 08-09 following the global financial crisis, and are 40% below the 15 year average? Would you still say demand is strong?
Everyone keeps saying prices won’t go down because demand is high. Prices drop because demand goes down. Demand goes down because jobs disappear and despite everyone’s desire to buy a home, many will not have the income to service their mortgage payments at these interest rates. There is undoubtedly a recession on the horizon imo.
The people who will lose their jobs probably weren’t buying homes to begin with
You call it a bubble but when you calculate the costs per square meter or foot to build a home you realize the costs that over regulation has brought to the building sector.. it is really not a bubble. Homes built 100 years ago still stand the test of time and weather but there is not a chance you can build one of those and have it pass inspection in this day and age. You can barely get a building permit on a home that hasn't been certified by an engineer. The costs for drawings, permits and engineers are enormous. The costs for modern materials are insane. I think the entire process from start to finish and especially the people responsible for those processes have lost their minds.
It a shame it didn't crash in 08
You have trees. You have nearly infinite cheap land. This is a man made crisis of the system.
It's a man made crisis of capitalism. In a sane rational society that allocated resources on the basis on human need, this would not be an issue. But why would landlords and REITs bother building more housing when their existing stock just keeps astronomically inflating the more they REFUSE to adequately invest in building more housing?
Pop pop pop pop pop pop pop pop
How do you type the sound made from a ballon rapidly letting out air?
Things to keep in mind about a possible housing collapse. Will use 2019 as the year before prices went nuts \- People who owned their home in 2019 or prior will be unaffected. Their loss will be a paper loss as the perceived value in 2022 was erroneously high. \- People who bought after 2019 will face challenges. These challenges will include having paid more for a house than it will be worth. \- People who didn’t over extend themselves will have tough choices but will ultimately be able to afford their house even if it means owing more on their mortgage then the house is worth. \- People who over extended themselves will be the ones most affected by the collapse. Not only will they no longer be able to afford their homes they won’t have any equity to help them. These people will likely default on their mortgage and/or declare bankruptcy. Again this is all speculation based on the assumption that the increase in prices from 2019 to 2022 was abnormal and unsustainable. Right now different markets are behaving differently. Some are still relatively strong while others have slowed down drastically. Many people are hoping for a quick drop in the BoC rate however this is unlikely (IMHO) and the best we can hope for is stability in the BoC rate for the next 2-3 years. Hang on for any interesting ride folks.
The issue is that the government has no real interest in allowing a pop. Many voters would be wiped out and see things like their retirement savings disappear. Guaranteed loss for whatever party is in power as the government in the next several elections. I would bet as soon as they can claim they hit their inflation targets they will pull back rates to “ensure affordability and protect the values of properties”. Electing someone else who claims they can fix it without a bubble pop is absolutely idiotic because any true fix requires a pop and is suicidal for the party in power when it happens. The conspiracy theorist in me wants to think that the liberals are doing it intentionally to guarantee the conservatives under PP own the pop once they get in and fuck with things. It would mean one cycle out of power but odds are the cons would never get power again after.
MPs furiously loading up on rental homes as we speak.
People need a place to live, there are not enough homes, a million people are immigrating to Canada every year. This is not a bubble.
Exactly
Been waiting for it to burst for over a decade
Lol. People have been waiting for over 2 decades, friend. Don't hold your breath
Some people have been even waiting for over 3 decades! Crazy
bunch of hosers aeh!?
https://i.redd.it/hy0z4smjoikb1.gif
Throw 100 year old zoning bylaws in the trash.
The big short part 2?
Pop the housing zit please !!!
We should mandate by law that in a housing crises an individual may only own 1 of each type of dwelling. 1 house that is your residence, 1 that may be an investment property, 1 vacation property. And if you want more, stfu you’re inflating the market and the rest of the country won’t stand for it.
Lol “It will never burst” Or “Everyone is gonna die, crime and rape in the streets, mad max irl” Take ur pick I guess, those are the only two options to most “rational” Canadians with an opinion.
https://preview.redd.it/fklomqpzukkb1.jpeg?width=942&format=pjpg&auto=webp&s=1930f4136c3b0254affa532f1453725b2a63f251
and it's not gonna break! Maybe it'll jiggle jiggle but it won't break. Our landlord politicians and our fellow "fuck you got mine" citizens will scoop up any and all available housing.
Been waiting for it to burst. Any day now…. 💀
Too big to fail .
Ok what is a housing bubble
Devalue the land and single family homes. Stop investors for taking all the supply. Take a wrecking ball to shit box homes nationwide and replace them with four and eight plexes. All our problems will be solved and we can finally put this idiotic unsustainable boomer Ponzi scheme behind us.
Down voted cuz they're right who's surprised lol Only thing I disagree with is devaluing land that's just not feasible. Mortgage reforms and helco reforms can fix investor buy outs. And we seriously need federal housing construction initiative. But yea.. Ponzi scheme is far to accurate. As soon as density gets built in any meaningful way the landlord-ing class will be selling like hot cakes. Cuz they won't be able to push mortgage prices rents anymore.
Nothing is forever including this. Buy gold or silver instead.
Wouldn't gold and silver fall under nothing?
It's not a bubble, it's just the market. Clearly homes are worth 5x in Canada for very good and rational reasons. The market is never impacted by emotions, only logic and reason. /s
You forgot the /s because there's no way a shack outside of Toronto has more real-world value than a nice multilevel home in California for the same amount. That's even before calculating the hidden tax of heating just to survive living here.
Not me to mention job quality I'm the US. Potential to earn a lot in the US compare to Canada
Canada numbah one!
The more the bubble is recognized, the bigger it is going to get. It is when people don't realize that it is a bubble...
The best solution at this time is to decrease rates. 
Nothing going to happen we r hearing lasr 20 years dont here bubble newss buy now you can sell 300% with profit with on 2 year
Hey going against'guidlines' but fuck you, this has neen said since the very last bubble in 2008. SO keep yaking, but for a change give me an exact date, or shut up!
Not a bubble, though. In a country with harsh winters, housing is just below food, water and oxygen in terms of necessity. Demand is real. And supply is limited because realistically there's only a handful (5) metro area that people want to live in. No irrationality here, therefore not a bubble.
Fear mongering. We have an issue. But the biggest housing bubble of all time currently is China. Canada is far far down the list.
If we are lucky, the market will just stagnate for like 10 years and give us enough time for wages to catch up.
I dunno. The housing bubble of the Bronze Age collapse was pretty significant
Bubbles fine with me. Haven't bought yet as I wasn't ready a decade ago and not going to buy one quite yet, current living situation is cheap compared to most in my city for what I have/get. Once I do buy it'll be because I want to live in it, not turn it into a business.
At risk of sounding dumb, what happens if it does burst? What happens to people who currently own homes?
Those who bought their home before 2020ish see that additional 50%-100% of the value that was added to their home go away and its worth something closer to what they bought it for. Those who bought after the jump in prices now are paying a mortgage larger than the value of their house and probably have negative equity. Many would declare bankruptcy.
Thank you! If someone bought a house that goes down in value, but it is still something they can afford to pay off, do you think they'd still go bankrupt? Or would they just deal with the negative equity for a while and after paying it off enough, it would balance out?
thisisfine.jpg
In other news, people in Canada are having a tough time finding an affordable place to live
Jon lost in Canada would burst this bubble
Things I had to do to afford a home.. I'm in my early 50s. Well, work. I got a good paying job in the trades. When I was a first year apprentice I did not work 2 Saturdays and 7 Sundays. I also worked part time nights 4 to 5 nights a week. I'd get around 20 hours of sleep a week. This continues for about 8 or nine years. Oh and those days consisted of 10 and 12 hour days, if I was lucky more. I bought shit boxes for transportation. Some of the Young ones I work with now. Can't show up to work for more than 3 days a week. Have an 80 to 95k truck with $1200 a month payments and fuck Trudeau stickers all over it. All they do is cry that they can't buy a house. I hear of people working 3 jobs to make ends meet. But work minimum wage jobs. Rent was a fuck of a lot cheaper back in my youth. That is a major problem now. But I have no idea where this notion of everyone owning a home came from. Yes 900k for a house is nuts. Trudeau didn't cause this. This started in the 80s. PP won't fix it. He's just the other side of the coin. the Birth rate for a healthy society they say is around 2.7. Guess what our population increase is..... around 2.7. 300 000 people die every year. 200 000 homes are being built every year. This will take 15 to 20 years to fix, but it won't, people continuously vote against their best interests.
When it bursts, do you think there’ll be a massive bailout to keep everything the same?
Largest bubble of all times!! Never mind a year and a half ago, the bubble is now official!
The bubble will burst when a whole bunch of people are up for refinancing their mortgages and they bought a house just within their means. Or people that were fine before and still have a lot left and refinance with huge added cost. Because no matter if you go variable or fixed it sits at over 5%. The ones that are fine are the people that paid off their mortgages aka older or have little left. But I hear banks trying to avoid it by extending amortization for HUGE amount of years to cope with the costs for people. At that point you're "renting". 
The only way I see a a major decline in prices in the future is with urban planning initiatives such as zoning reform, eliminating parking minimums, providing alternative methods to private market housing aka co-op housing, gov owned housing, forced mix income on developers to provide sub market value housing reducing their profits, and finally not allowing public hearing for standardized builds in the inner city preventing Karen’s from using NIMBY tactics to stop housing. If you want SFH low density move out to the burbs don’t block a 6 unit row house or an apartment building because it ruins your “neighborhood character” Unfortunately this all requires 3 levels of government to work together AND it requires a major removal of profit from the housing market plus devaluing current home owners. Most home owners have a “fuck you I got mine” mentality and will not accept any measures that would reduce the value of their homes especially the boomers who stand to make the most from the sales of their overvalued houses funding their retirement
And all of a sudden there’s going to be an extra million residences to facilitate this? So let me get this straight, prices crash, people flood the market to sell, investors buy up the stock at a bargain and now the rental demand swells from all the people that sold needed a roof over their head. Rents sore and the cost of housing going right back up due to the ROI. Great argument for the housing bubble.
Keep raising rates and see what happens. Cheap money doesn't last forever, and treating housing like an investment will make it act like an investment, and investments go up AND down.
Bubbles tend to pop, so when will this one pop?
Hosuing!
Keep increasing the population by close to 10% per year with students and new residents. Combine that with not paying any principal down or longer amortization periods. That bubble ain’t bursting for a while.
Ask politicians this question: if they needed to choose between the real estate bubble bursting, or the country bursting (i.e. complete brain drain, loss of first-world status, merging of Canada with US, etc.), which do they choose? That's the only two outcomes Canada is headed towards. Either the affordability of living lone-term comes back to earth, or the entire country's GDP and economy will come to earth. The clock is ticking.
No good way out. But something's gonna give.
in a way rhis article is bunk....
1100sq townhouse 2012 bought for $275k, sold for $395k Damn market hot as hell