Housing Affordability in Canada

[LetsGoBrandon]

How does decreasing demand and disincentivizing speculation of the housing supply inflate prices?

Problem is that many the solutions you suggested have been tried elsewhere and only caused the prices to inflate.

 

[Carjosse]

Problem is that many the solutions you suggested have been tried elsewhere and only caused the prices to inflate.

That is the problem they only tried one or two of the measures, that isn't actually going to decrease demand if you leave other drivers alone. Banning foreign ownership is not going to have much of an effect unless you tackle domestic speculation as well.

 

[Fledermaus]

Boy they sure have changed. Our mortgage was at 14%.

Mine was around 5% after refinancing. Friends of our bought a few years later somewhere in the 18-20 range.

 

[Fledermaus]

Longview:

Perhaps it's marginally more expensive but Carjosse is right about the speculative bubble inflating house prices drastically. Be it property alone, derelict housing or viable housing, the speculation is rampant. The reasons are different from region to region, but the net affect has been runaway inflation since the mid-1960's. Government policies to limit urban sprawl have had some effects to in certain parts of Canada.

Cheers and be well.
Evilroddy.

Perhaps Canada is getting Californicated.

 

[Evilroddy]

Perhaps Canada is getting Californicated.

Fledermaus:

Perhaps you're right. Who knows. Too much fiat money chasing too few real assets in a world where capital is globally mobile.

But at least we don't have fatal shootings every day, killing tens of thousands per year. That is Kalifornication. This was a quip made in good humour and not an attempt to derail the thread's purpose or to insult you Fledermaus. So let's not go down a tangent. If it wasn't received in good humour, I apologise to you.

Cheers and be well.
Evilthugee.

 

[Fledermaus]

Fledermaus:

Perhaps you're right. Who knows. Too much fiat money chasing too few real assets in a world where capital is globally mobile.

But at least we don't have fatal shootings every day, killing tens of thousands per year. That is Kalifornication. This was a quip made in good humour and not an attempt to derail the thread's purpose or to insult you Fledermaus. So let's not go down a tan get. If it wasn't received in good humour, I apologise to you.

Cheers and be well.
Evilthugee.

Quote taken in the spirit in which it was indended...

BTW - California has some of the most restrictive gun laws in the states. To the point many people moving to California sell/transfer guns before entry.

(last derail from me)

 

[Allan]

Carjosse, you are seeing the glass half full. I don't mean to minimize your plight, but I bought my first home as a single man at age 23. It was an old house, 900 sq. feet,
3 bedroom, 1 bath, in a small town 30 minutes from my family and my job. I bought books, learned how to fix it up (the internet did not exist then), sold it for a profit, then started the process over again. With the amount of You Tube video's available today you can do the same thing, but it means some sacrifice. When my buddies were going to the bar, I was saving for a house, when they were going to a ballgame I was replacing old worn out cabinets. It's not easy, but if you make it your highest priority you can buy a home.

This is exactly what I did. I bought older houses with potential that needed mostly cosmetic work. After my 3rd I was mortgage free. I was fortunate in that I had the internet for the last 2 houses so learned how to do plumbing, hardwood floor refinishing and some of the more difficult renovation projects.

 

[longview]

Fledermaus:

Perhaps you're right. Who knows. Too much fiat money chasing too few real assets in a world where capital is globally mobile.

But at least we don't have fatal shootings every day, killing tens of thousands per year. That is Kalifornication. This was a quip made in good humour and not an attempt to derail the thread's purpose or to insult you Fledermaus. So let's not go down a tangent. If it wasn't received in good humour, I apologise to you.

Cheers and be well.
Evilthugee.

There are some unusual dynamics going on.
I thing Canada’s birthdate is about 1.5, but the population is still growing, which means it is coming from immigration. Maybe many of the immigrants are bringing money, and artificially driving up the prices.

 

[Evilroddy]

There are some unusual dynamics going on.
I thing Canada’s birthdate is about 1.5, but the population is still growing, which means it is coming from immigration. Maybe many of the immigrants are bringing money, and artificially driving up the prices.

longview:

That's certainly one part of the picture. But a city like Montreal (where Carjosse is struggling) and its surrounding communities have lots of abandoned property andderelict buildings which are not being used to build low and middle rental/price housing. Entire city blocks of derelict buildings are just standing idle and have been doing so for a generation or two. I would estimate that 5-10% of the island's previously developed and now derelict land is sitting idle. This is not land set aside for green spaces or nature preserves, it's derelict land with or without buildings on it which is not being used, located near or in prime real estate zones. That land is standing idle and if it was developed it could draw off homebuyers/renters and deflate the housing bubble a bit. However the few commercial and residential real estate management corporations which own or control the bulk of the derelict property also are profiting from the high capitalisation the speculative bubble is creating for them and thus have no incentive to help deflate it.

Cheers and be well.
Evilroddy.

 

[RetiredUSN]

You can buy any run down house and refurb it cheaper than you may think.

 

[Allan]

You can buy any run down house and refurb it cheaper than you may think.

As of March the average home price in Canada was $716,828. If you exclude the Vancouver/Toronto market which skews the number up the average is still more than 550K, certainly out of reach for many people, especially single wage earners.

Refurbishment is a good solution because it also gets you some equity faster than simply paying down the mortgage. We're in a bubble as well so buying a fixer-upper is less risky if the bubble pops.

If I were in the market today I'd look seriously at sticking to rental. At least with that all your costs are contained within the monthly fee and there are no major repair surprises.

 

[mrjurrs]

The pandemic should have resulted in at least some residential market collapse in a big city like Montreal, as people discovered they don't need to occupy office space and head out of town. That is what has happened, to a greater or lesser extent, in every major city here in the states. What it means is that if there ever was a time to put your foot in the door - buying a small condo for example - the time might be now, before the migration reverses and the city real estate starts to climb again.

In my area, housing prices have soared during the last year, and we have seen a large exodus from our urban centers. I'm not in Canada, but the US will have some sort of housing gyration when rent and eviction moratoriums expire. What will that look like? I have no idea.

 

[Lord Tammerlain]

How is anyone my age (early-mid 20s) suppose to ever be able to save up and buy a house or soon I imagine even a condo? When home prices keep increasing at 20% or more each year how is anyone who is not already in the property market supposed to enter? I have been reading a lot of articles how most millenials who are purchasing homes are doing it with the help of their parents money, what about those of us who don't have that? Now because of the pandemic nowhere is safe, even small towns are rapidly increasing in price. I have no idea how people are expected to buy a house, have kids, and somehow have enough money leftover to retire.

Something has to give and the government needs to intervene, the market needs to crash and it should be now before it gets worse. Ban foreign ownership, heavily tax and in some areas ban non-primary residences, heavily tax vacant residences, charge capital gains on home sales, half measures won't do anything.

A crashed housing market will crash the economy. Banks will collapse, people will walk away for mortgages and their houses. People who have mortgages will get stuck in the homes they have as they could take huge losses of the sell.

Vastly more Canadians would be hurt from a collapsed housing market than would benefit.

If you want a place of your own save and save hard for a few years. Find a roommate and a 2 bedroom basement suite that just requires rent, don’t eat out, drink at home and drive old beaters until you have a down payment for a condo. Get a two bedroom, rent out one room. Save as much as you can until you could put a down payment on a starter home.

 

[Lord Tammerlain]

How does decreasing demand and disincentivizing speculation of the housing supply inflate prices?

Lower prices provides less incentive to build more housing. High prices means higher profits, which provides incentives to build

 

[Lord Tammerlain]

There are some unusual dynamics going on.
I thing Canada’s birthdate is about 1.5, but the population is still growing, which means it is coming from immigration. Maybe many of the immigrants are bringing money, and artificially driving up the prices.

Immigration is quite large at around 0.9% of population. I do not think that includes temp workers, just permanent residents. Non family immigration requires the person has good job skills and education. So they can often find good jobs and buy houses in a few years. Some especially from India or China have quite a bit of money and can buy upper level houses in cash. Heck housing in Beijing and Shanghai is more expensive than California. If someone bought a condo in Beijing 10 years ago within the first ring road, which would have cost $200 000 can sell it for more than $1 000 000 USD

 

[calamity]

How is anyone my age (early-mid 20s) suppose to ever be able to save up and buy a house or soon I imagine even a condo? When home prices keep increasing at 20% or more each year how is anyone who is not already in the property market supposed to enter? I have been reading a lot of articles how most millenials who are purchasing homes are doing it with the help of their parents money, what about those of us who don't have that? Now because of the pandemic nowhere is safe, even small towns are rapidly increasing in price. I have no idea how people are expected to buy a house, have kids, and somehow have enough money leftover to retire.

Something has to give and the government needs to intervene, the market needs to crash and it should be now before it gets worse. Ban foreign ownership, heavily tax and in some areas ban non-primary residences, heavily tax vacant residences, charge capital gains on home sales, half measures won't do anything.

I can see Toronto and Vancouver being unaffordable, but places in Saskatoon have to be affordable.

 

[Allan]

I can see Toronto and Vancouver being unaffordable, but places in Saskatoon have to be affordable.

Saskatoon's average is $330,000 as of March.

 

[calamity]

Saskatoon's average is $330,000 as of March.

Day-um!

 

[calamity]

I don't get it. Canada has the same land mass as the US but 1/10 the population. You'd think that land would be cheaper and cost of building materials no worse.

 

[Allan]

Day-um!

It's great of you're a retiring boomer and sell your house because the recent surge in pricing has added a lot to equity. I sold mine in December and there was a bidding war that drove the price up almost 50K. But for someone trying to get into the market these days, like the OP, it's tough.

 

[RetiredUSN]

Come to America and act stupid.

You'll never have to work again, and the the government will pay for it.

 

[Allan]

I don't get it. Canada has the same land mass as the US but 1/10 the population. You'd think that land would be cheaper and cost of building materials no worse.

When you think about it though both countries really have similar population densities. In the US your population is more evenly spread over your land mass. Canada's population is concentrated south due to historical settlement, arable land and weather.

 

[Allan]

Come to America and act stupid.

You'll never have to work again, and the the government will pay for it.

I've been to America many times*, acted stupid, nothing happened.

*Worked in Philly for a while also.

 

[Subieguy]

How is anyone my age (early-mid 20s) suppose to ever be able to save up and buy a house or soon I imagine even a condo? When home prices keep increasing at 20% or more each year how is anyone who is not already in the property market supposed to enter? I have been reading a lot of articles how most millenials who are purchasing homes are doing it with the help of their parents money, what about those of us who don't have that? Now because of the pandemic nowhere is safe, even small towns are rapidly increasing in price. I have no idea how people are expected to buy a house, have kids, and somehow have enough money leftover to retire.

Something has to give and the government needs to intervene, the market needs to crash and it should be now before it gets worse. Ban foreign ownership, heavily tax and in some areas ban non-primary residences, heavily tax vacant residences, charge capital gains on home sales, half measures won't do anything.

same thing going on down in my neck of the woods here in Wash. State. And probably just about everywhere else. Affordable housing is now a crisis situation here, and sounds like there.

 

[calamity]

When you think about it though both countries really have similar population densities. In the US your population is more evenly spread over your land mass. Canada's population is concentrated south due to historical settlement, arable land and weather.

I get how no one wants to live in the Territories or along the Hudson Bay, but there is still a ton of space available within the habitable zones: wide open spaces between Toronto and Ottawa, for example. And, I recall seeing nothing but forest and field up in Haliburton County (east of the Georgian Bay). Other than Halifax, Nova Scotia is virtually uninhabited. And, we may as well say that there is absolutely nothing from there to Montreal except a blip called Quebec City.

There is also virtually nothing for a 100 miles around Thunder Bay. And, even less east and west of Winnipeg. I don't get it. Is there a Canadian law against sprawl or something?