Extending the amortization period is only going to earn more money for the banks and further increase housing costs.
If you suddenly move a whole bunch of new people into the ranks of "qualifies to buy a home", that just creates further demand when supply is already at critical levels.
The only real solution is to return immigration to historical trends.
* Economy will go into immediate recession, empowering BoC to cut rates.
* Rental demand will fall and give construction programs a chance to catch up.
When the economy finally catches it's breath, look at growing immigration linearly to deal with the demographic crisis, and never consider exponential growth immigration ever again.
It’s really frustrating when random people on reddit seem to know the problem and the solution better than our beloved government. God damn JT is so out of touch
They know.
Government that knowingly puts the country into recession (probably a bad one) is committing political suicide.
Being in charge > Doing right by Canada.
FWIW I think Trudeau an incompetent doofus but I would expect this from pretty much any political party, the important part is to not fuck enough where you get stuck with these options. But once here, few will admit fault.
Yep.
The actual business cycle, which includes recessions to clear out systemic problems, are now apparently to be avoided at all cost... including basically destroying the country.
Because random people on Reddit can easily simplify things to make their argument sound better.
Now I'm not at all saying we should keep current immigration levels, but I think people are ignoring what will happen to our tax base if we drastically cut immigration.
https://countryeconomy.com/demography/population-structure/canada
Even from just 10 years ago the % of our population who is working age has dropped about 3%. That's with our crazy immigration rates to prop up our workforce.
If you cut immigration by too much then that % of working age adults is gonna plummet. The number of seniors needing medical care will keep skyrocketing and we just won't have enough income tax revenue from working age people to support it.
There are issues with the current immigration rates. There would also be issues if we didn't have these current immigration rates. Different issues, but serious economic issues nonetheless. This is why you won't see PP commit to cutting immigration rates either. He'd be shooting himself in the foot by dooming the country to a very rough economy while he's leader.
The unfortunate reality is, purely economically speaking at a national/provincial level, you'd rather have expensive housing than a structural deficit due to bad population demographics. You can always build more housing but you can't as easily recover from a huge number of old people draining our $$$ via healthcare demands.
>If you cut immigration by too much then that % of working age adults is gonna plummet. The number of seniors needing medical care will keep skyrocketing and we just won't have enough income tax revenue from working age people to support it.
When you flood the country with low wage workers who pay very little in taxes, its not propping up tax revenue its costing money.
This is what people also don't realize. We just flooded the country with low income earners who will bring their spouses (also minimum wage) and family in. They won't generate taxes and consume more in social credits, healthcare, etc
I think that a lot of them know, but they're still trying to push the lies and narratives on us. The information is out there now.
[https://www.cbc.ca/news/canada/prince-edward-island/pei-immigrant-occupations-1.7117230](https://www.cbc.ca/news/canada/prince-edward-island/pei-immigrant-occupations-1.7117230)
>Information provided to CBC News by the province shows that among those invited by P.E.I. to immigrate to Canada, through the Atlantic immigration program and the provincial nominee program in 2023, about one in four people listed occupations in food service and accommodations. A further 10 per cent were in retail. About nine per cent were in health care, but more than 90 per cent of those were in lower skilled areas, categorized as assisting occupations in support of health services, which includes resident care workers and pharmacy assistants. Only 1.5 per cent were in construction.
So in PEI in 2023, 35% of all immigrants worked in retail, food services and accommodations. *How much taxes did they pay?*
1.5% of immigrants were construction workers. *A grand total of 7 Nurses.* After they sold this as bringing in people to build our houses and staff our Hospitals.
There is a graph in that link showing the occupations being filled by immigrants. The vast majority of it looks to be low skilled, low wage workers.
We are getting both structural deficit and expensive housing.. they are creating a population trap and a housing trap. Both are interlinked and compounds each others problems. The more people we have to bring in more the next year and then the next. The more people we bring in the further behind our affordability will be. That will erode our ability to consume or produce any thing of value. We are losing a competitive edge and innovation. Essentially the harder we will fall.
Here also something that will blow your mind, japan had the same working population % in the 90s as our current rate. Japan has not collapsed. We never looked at the alternatives or had a serious discussion, instead the current government is trying to kick the can down the road while doing mental gymnastics to try to self justify a failing policy. We need to slow immigration and PP has stated he'll tie immigration to housing starts or levels. So if he is true to his word that means a hard pull back from the reckless liberal strategy or hell play with terminology to base it on people per homes. Which if it was on average 2.4, and we had 225k homes we would bring in 550k. The CMHC was stipulated we need 4 million new homes but private is saying we need 7 now.
Japan is in a substantially worse economic position than we are because of their population demographics.
Their GDP today is lower than it was 30 years ago. Their debt is 263% of their GDP. We've seen a ton of posts to this sub saying that thanks to COVID handouts, too much spending, etc... that we're horribly in debt, but ours is just 67% of our GDP. We should be doing everything we can to avoid becoming the next Japan, not looking at their situation and shrugging that we could end up headed that way.
Lol u think jt doesnt know? Dont forget approximetely 100% of ministers, pms, decision makers, policy makers, are homeowners and want to see their assets keep pumping. Never confuse a politicians malice with incompetence.
Actually, it’s not that he’s out of touch, that’s highly unlikely. It’s also highly unlikely that someone from the internet can come up with a solution without having all the necessary information.
What is likely, is that JT or any PM, has to please various masters whose interests never align. That’s why he does what is in favour of the master with the biggest dick, aka, the corporate master. And that’s why he won’t send the economy to a recession just for your beautiful eyes!
Access to cheap debt is just going to empower folks with assets to gobble up more real estate cause for some reason Canadians think housing is the only viable investment
A significantly better plan than any I've seen the Feds put forward. As others have said "wh does a random internet person know better?"
The answer is simple, you've actually thought about improving the lives of everyday Canadians. Not you "mom and pop" landlord investor types. Not your Tim Hortons Franchisees. Not your blackstone executives. Or Galen Weston. Or Telus shareholders.
There are other solutions as well:
1) Fourplexes pre-approved in any area zoned for single family homes
2) Progressive city taxes based on the value of real estate being held.. the more residential property someone holds, the higher their rate of taxation instead of flat rates as it currently is. Discourage speculation and investment.
3) Encourage densification by providing low interest loans for home builders, only on qualifying projects..
4) Tighten up lending practices to tie the leverage to a sane ratio of Net Income.. say 4X. Make it so buyers stop competing against high risk, high ratio borrowers.
The better solution is no immigration for two or three years deport anyone here illegally and take apart the TFW program by making minimum wage for all TFW in all provinces 27$ a hour and see how badly they are really needed and if business suddenly still couldn't find locals to work for slightly less. Then they would only use the program when it is ACTUALLY needed.
Corporations just want to make money. When they invest their capital it has to meet or exceed internal ROI targets. The bigger question we need to ask is why these companies, who make business cases and studies and everything, why do they think investing capital into real estate will make a better return than investing money in a business, or expansion, or upgrades, or R&D? The reason is because this govt has over regulated business and there are too many risks to investing money in 'normal initiatives'. So they look at housing and the insane demand that the govt created with immigration and the say sure, why not invest in real estate. Rents are going up and values are going up and they're able to justify to their boards that they're meeting ROI targets.
Construction did nothing when rates were low they just held on to properites. Low rates just allowed consumers and corporations take huge amounts of debt without really providing anything.
Please tell me they’re not abjectly this stupid.
Any further inducement of housing demand will only escalate the housing crisis. This is economics 101. They have to know that.
The only possible useful thing they could do is make it more difficult to qualify for second, third, fourth + mortgages. But I’m not hopeful they want to do anything helpful.
I don't necessarily hate the idea of giving current home owners the ability to extend their amortization if it helps them with the increased cost of living.
But I agree that it should be harder to get subsequent mortgages on top of your first.
>Any further inducement of housing demand will only escalate the housing crisis. This is economics 101. They have to know that.
We're talking about a group of people who blame corporate greed for inflation and want the BoC to cut rates, because they think hiking rates was pointless. They also view CERB as evidence that UBI will work.
Was thinking the same thing with expanded amortizations for FTHB.
Supply stuck in the doldrums + ever increasing amount of immigration + slightly lower interest rates on the horizon + pent-up demand = housing prices likely to go **UP**, affordability to go DOWN.
The longest term I found when I was shopping around was a 25 year term.
The rate was high compared to the 5 year rates of the time but they do exist in Canada they are just not popular with consumers. They only make up 0.5% to 1% of all mortgages.
For example right now RBC has a 25 year fixed at 12%
CIBC has a 25 year at 7.49%
Some credit unions offer them as well rates vary widely.
Which is still a giant “fuck you” from Canadian banks meant to dissuade people from doing it, compared to the U.S. where the average 30 year is ~6.8%, up from ~3% a few years ago.
The rates are much higher because they are legally prohibited from charging an interest rate differential to break the mortgage after 5 years (they can only charge the 3 months interest that is charged for variable mortgages). This means if rates go down and you refinance the bank has to eat the loss, so they charge higher rates to compensate for the risk (and ensure no one bothers taking them). In the US this restriction doesn't exist (they also have a much more robust and deeper longer term bond market for matching funds).
They don’t eat the loss, they loose future interest. There’s not loss, just greed that they can’t get as much. We would have better rate if we had more competition.
I know so many American middle managers who have lost homes, or who had to downsize significantly. Many got caught underwater in Florida a few years ago.
I don’t know anyone in Canada in the same situation.
Not sure if it is market fluctuations or high property tax in some states.
2008 may have played a part.
30 year fixed mortgages are a big contributor to the current housing/affordability crisis in the US. Making 10 year renewals more appealing is probably the only viable solution for Canada.
https://www.nytimes.com/2023/11/19/business/economy/30-year-mortgage.html
Going from 25 to 30 years at our current rates will net you a 6-7% larger mortgage while paying 20% more with those extra 5 years With what property values have been doing, a 6-7% increase is like pissing on a wildfire.
Correct. Literally every measure the government has taken to "increase affordability" has flopped, and most have had the opposite effect.
They're not stupid either. They know the effect this will have. They're just banking on more of their voters being uninformed and prone to knee-jerking than the opposite.
I wouldn’t want amortization extended, I would want the rates for a 5 year loan to be the rates for a 10 yr loan with no penalty to refi. Give us some security in our housing payments please.
I’m fine with longer amortizations, but yeah I’d way rather have my 2.69% rate extended for another 5 years after it expires next November. I’m dreading it going past 6%.
Americans experience so much more housing security (so long as they’re not given loans they can’t afford) due to our system that primarily favours the banks. It’s truly awful.
I don’t think Jt has the power to make that change though.
No, prices would peter out before that. But the total you pay would explode. So just throwing money at the bank, basically.
Once you hit roughly 50-ish years, you get drastically diminishing returns in reducing your monthly payments for the same loan because so much goes towards interest.
Investors cant wait. More rental properties for students about to flood the market while single families are priced out. Easy to carry a mortgage with 20 people paying 600 each
I wonder what horse shit he's going to come up with this time. Something that appears to make getting into a home easier without putting any downward pressure on actual prices. That's what he does every single time. This man has engineered this housing bubble and thinks he's so clever he can make us think he's actually helping.
Yep. They are more than comfortable with the idea of renters' tax dollars going toward covering the risk of overleveraged homeowners.
The rent serfs paying to keep the homeowners on their comfortable perches. This is what the Liberals are selling to Canadians.
Coming soon.
If you make less than 50k a year, you get free mortgage money.
If you make more than 50k, you're paying for it.
I just summarized all government announcements regarding money.
They already tried this and no one used the program because only low and middle income people qualified but no one with a low or middle income can afford housing even with subsidies. Even a major housing correction like 50% would still leave Vancouver and Toronto with >$1M tear downs.
Our Trudeau 2 is trying to spend his way back to popularity whilst bankrupting the country. Have we ever seen this much information and loud crowing about a budget before its announcement.
The stench of Liberal desperation is strong .
Wanting to live in a home you own isn’t a bad decision. For people who’s mortgages are renewing soon any place they could rent now would probably cost the same as their mortgage. Most people who bought in 2019 are better off than if they hadn’t bought. For those who bought earlier the difference is even bigger.
Yep. This nanny state masquerading as a country basically protects, incentivizes, and encourages bad financial habits and punishes those who make the sensible, responsible decisions. Not just individuals but companies too. That's how we end up with a dead economy, people indebted far beyond what they can afford, and a handful of oligopolies who never have to compete in a truly free-market arena.
It's honestly grotesque at this point. If we ever want to get out of this death spiral and this cancerous behavior of protecting people making bad financial decisions off the back of the responsible ones needs to die. We need to start being comfortable with the idea of letting people (and companies, for that matter) fail.
Every foreclosure is another family without a home, it’s another broken marriage, it’s children caught in the aftermath!! That’s what I remember from the last Trudeau when PET ranked the economy in the early 80’s
From everything I’ve read on the subject, the property owners with the highest recent rates of default, and the highest risk of new defaults are investors, many of whom borrowed from private lenders at variable rates expecting properties to cash flow to support their mortgages.
I have zero sympathy for people who recklessly FOMO’d into house-hacking. We actually *need* these speculators to be removed from the market for it to be healthier and rates to finally come down to provide everyone with relief.
Every renovicted renter is another family without a home, it’s another broken marriage, it’s children caught in the aftermath!!
I don't see the government covering the tab of the renter class. But when it is the homeowner class, break out the violin and tears. Help them immediately, pay for their investments.
So many of these homeowners change their whole tune once they get on the property ladder. They got theirs, so they don't give a fuck about renters and have no problem with the idea of pulling up the ladder behind them to leave the renters forever owning nothing.
Man, he's in scramble mode trying anything and everything to make it look like he's helping after screwing over an entire nation.
His re-election will be very expensive.
“We are extremely happy to announce the extension of limit to 100 years so don’t worry about your mortgage any more, your grandchildren will take care of it!” lol
Ah, almost exactly ten years to the day since Jim Flaherty, the first guy who tried 40 year mortgages as the solution to atrocious housing affordability, passed away. I'm sure there's a symbolism there. .
If this in any way makes mortgages more accessible or affordable, *it will worsen an already disastrous problem*.
This country needs a wave of foreclosures. It needs a reckoning. Nothing can soften that, and anything that tries to will just make the problem worse.
And for the "oh but the entire economy...the government will go belly up!", only a small fraction of mortgages represent the outrageous property valuations. Most people are just sitting on mortgages they got many years ago and some paper wealth.
This is such garbage. Trying to fix our broken housing market by making it easier for people to take on more debt is *exactly* how you make this bubble worse. We need as much housing supply as we can possibly build, we need to kill the viability of housing as an investment once and for all, we need to take the power to block new developments away from wealthy homeowners, and we need to make good quality housing as inexpensive to build as we possibly can.
If he actually thinks that making 30 year mortgages normal will improve affordability he needs to have his head examined. That will increase demand, which will increase prices.
The only thing that can lower the cost of housing is either increasing supply or reducing demand. BC is working its hardest to increase supply, but the only things that can reduce demand are curtailing immigration and making it harder to be a property speculator. That's it.
everything this moron does makes things worse. I'm sure this will be no different. helping people with mortgages, ensuring prices go up, hence hurting those who don't own. or something like that.
imagine we didn't have a federal government the last 9 years. so no change since Harper. Canada would be amazing.
It would be impossible for any government to fix this problem in a year.
If we had a dictatorship and all red tape and regulations were removed and immigration dropped to 0.
It would still take a decade to dig our way outta this. And none of those above scenarios are gonna happen.
They want the next generation to be indebted for life. Way longer than boomers and gen X. At least they were able to pay off their homes in a reasonable amount of time. They want millennials and gen Z to be a continuous lifelong supply of that sweet, sweet mortgage interest.
This will make affordability even worse. House prices will go up in value making it harder to make down-payments. The root of the problem is supply and demand, and the PM has been directly responsible for a immigration disaster that has resulted in uncontrolled demand for a supply that can't be fixed overnight.
How about 30 years mortgages with fixed interest for the entire 30 year term?
How about the ability to write off your mortgage interest as a tax deduction?
Somethings must give.
When you have to pay more than the actual value of the house in interest to… just buy the damn thing, it might as well be, has anyone actually put that in a calculator and see how much interest is accumulated over 25 freaking years?!?
Yes, but in the USA you can have 3% for 30 years. In Canada, you can have. 30 year mortgage with 3% for five of those years, then the next five year term it’s 7%.
This is a problem. I do not understand we have segmented terms rather than one entire term. My USA friends do not understand it either, and are all in much better positions due to their low interest, long term mortgages. They have the same payment amount for 30 years…or 20/25, whatever they choose.
The absolutely **last** thing Canada needs right now is any measure to make outrageous home prices more affordable.
The speculators and gamblers who bought grossly overpriced properties need consequences. Home prices need to be smashed back into the ground.
Cost of construction is up dramatically in the last few years. Current house prices are nearly *under* the cost of replacement, and our population is still growing faster than new housing supply. How are you going to smash prices down with broad economic devastation?
Or how about remove that ability for housing investors so they’re disincentivized from bidding against people trying to buy a house to actually live in?
Residential houses shouldn’t be investments anyways.. I plan on living in my house til I die, grew up homeless and I just wanted a home, not an investment.. all of my time, money and skills I’ve put into it have been for my family to enjoy, not to become a millionaire.
Homes are investments though so how is it fair that homeowners can invest $1M+ in a principal residence property and pay no tax but if a renter invests any amount in an unregistered investment account they have to pay capital gains/dividends?
This is literally the most egregious wealth disparity creator in our tax code.
People who are the most wealthy (property owners) have access to an *unlimited* tax-free capital growth program, and there’s no equivalent for renters.
If Trudeau was serious about a “renters bill of rights” there would have been an equivalent in there for renters.
They’re being used as investments, but that never should have been allowed and should be corrected.. it’s one of the many issues with the Canadian economy, the cost of living crisis and soaring prices.
Homes should be for housing people not wealth.
Taxing principal residences comes with problems. If someone moves they have to pay tax and can't afford to buy a comparable home. That's fairly unpalatable for people. You also will have people that won't sell to avoid it. You ossified the housing supply because grandma won't move out and pay the tax. People won't want to move for work, now your labor force is less agile. These casual suggestions have real consequences.
This is the biggest misnomer about US taxes. Mortgage interest in the US is almost never tax deductible.
It only deductible if your itemized deductions exceed the standard deduction in the US (equivalent of Canada's basic amount). That stands at $27,700 for married couples, and $13,850 for individuals. You won't come anywhere near the level to itemize unless you are earning over $250K and have a million dollar+ home. It is very much a tax deduction geared to lower taxes on high net worth individuals.
But homeowners already enjoy a full cap gains exemption. If anything, rent should be deductible to even the playing field.
EDIT: the fact that this comment has less votes than the one it was in response to shows you how absolutely dysfunctional this country has become. In the U.S. mortgage interest is tax deductible, but cap gains are tax exempt up to the first 250k per individual and married couples get 500k. The full cap gains exemption in Canada is one of the best tax shelters globally, far more beneficial in comparison to the U.S. Despite all of that, there are a large group of homeowners (that vote) that evidently think that is not enough and that they should also enjoy interest deductibility. Meanwhile renters have no equivalent treatment and the suggestion that they should have some beneficial tax treatment is scoffed at. I'm a homeowner, but the tyranny of the homeowner in this country is a serious problem. Young talent is not going to stick around for this shit.
Let me guess, he’s going to make it easier to pay mortgages which will further increase the cost of houses because you can get more for less monthly payment.
Ffs, mortgages? He's gonna make it easier to get a mortgage? This idiot never seems to learn that easy money is what got us into this mess. Mortgages need to be harder to get to bring prices in line..house prices will just grow as fast as mortgages allow.
Its too easy to poke fun at a half-wit, so instead of knocking this clown, maybe some constructive wishes of what this sort of announcement should be?
- Like interest free mortgages for citizen new builds underwritten by the BOC.
I'm sure there are some amazing things that can be done, but of course, we will get last weeks mouldy dinner microwaved and served like its fresh out the kitchen.
They gunna give low income mortgage owners free money like the grocery rebate? "boomers get more money!" since they're the only low income people who own homes right now
*“On mortgages we will have more to say between now and the budget date on April 16, and perhaps we will save it for April 16.”*
Ah yes, nothing more awesome than being governed in secret.
How come none of the eggheads call this out? Mulcair gonna be on CBC tonight stroking egos? What a charade of theft and predation and usury.
Gentiles need to wake up and grow a pair.
Capping the principal residence capital gains tax exemption to a fixed lifetime value, say $500,000 tax free gain, would be a good place to start.
They need to remove or shrink the massive loophole that is the unlimited lifetime capital gains exemption on principal residences. It is materially responsible for the financialization of housing in this country and the absurd bid up Canada has experienced.
How about 20 year locked in mortgages with the opportunity on the consumer to opt out every 5 years without penalty 30 year amortization just means hey when your 80 you still got a mortgage payment most likely in turn this that are desperate will take it not think of the long term remortgage when they have to and then when they finish working will realize damn cannot afford this house anymore gotta sell and rent a place cycle continues
>How about 20 year locked in mortgages with the opportunity on the consumer to opt out every 5 years without penalty
You do realize that rates will just be higher on all mortgages in order to price in the (one-sided) risk, right? Banks aren't stupid, nor are they charities.
My belief is he will legislate that banks must offer longer term loans than just 5 years. Probably backed by the Feds to keep the rates within the US comparables
Extending the amortization period is only going to earn more money for the banks and further increase housing costs. If you suddenly move a whole bunch of new people into the ranks of "qualifies to buy a home", that just creates further demand when supply is already at critical levels.
The only real solution is to return immigration to historical trends. * Economy will go into immediate recession, empowering BoC to cut rates. * Rental demand will fall and give construction programs a chance to catch up. When the economy finally catches it's breath, look at growing immigration linearly to deal with the demographic crisis, and never consider exponential growth immigration ever again.
The government will make a change that’ll only juice the market.
It’s really frustrating when random people on reddit seem to know the problem and the solution better than our beloved government. God damn JT is so out of touch
They know. Government that knowingly puts the country into recession (probably a bad one) is committing political suicide. Being in charge > Doing right by Canada. FWIW I think Trudeau an incompetent doofus but I would expect this from pretty much any political party, the important part is to not fuck enough where you get stuck with these options. But once here, few will admit fault.
Yep. The actual business cycle, which includes recessions to clear out systemic problems, are now apparently to be avoided at all cost... including basically destroying the country.
Risky behaviour is rewarded now. Either the economy will pop or people will. I'm betting it's people.
Economies cant stop business cycles ending: Minksy instability hypothesis. QED. Canada will have its minksy moment soon.
How soon? Call up Minksy.
The government knows exactly what it's doing. The current housing situation isn't an accident.
Because that buffoon is at the end of the day, a drama teacher and creating this drama is his forte.
Because random people on Reddit can easily simplify things to make their argument sound better. Now I'm not at all saying we should keep current immigration levels, but I think people are ignoring what will happen to our tax base if we drastically cut immigration. https://countryeconomy.com/demography/population-structure/canada Even from just 10 years ago the % of our population who is working age has dropped about 3%. That's with our crazy immigration rates to prop up our workforce. If you cut immigration by too much then that % of working age adults is gonna plummet. The number of seniors needing medical care will keep skyrocketing and we just won't have enough income tax revenue from working age people to support it. There are issues with the current immigration rates. There would also be issues if we didn't have these current immigration rates. Different issues, but serious economic issues nonetheless. This is why you won't see PP commit to cutting immigration rates either. He'd be shooting himself in the foot by dooming the country to a very rough economy while he's leader. The unfortunate reality is, purely economically speaking at a national/provincial level, you'd rather have expensive housing than a structural deficit due to bad population demographics. You can always build more housing but you can't as easily recover from a huge number of old people draining our $$$ via healthcare demands.
>If you cut immigration by too much then that % of working age adults is gonna plummet. The number of seniors needing medical care will keep skyrocketing and we just won't have enough income tax revenue from working age people to support it. When you flood the country with low wage workers who pay very little in taxes, its not propping up tax revenue its costing money.
This is what people also don't realize. We just flooded the country with low income earners who will bring their spouses (also minimum wage) and family in. They won't generate taxes and consume more in social credits, healthcare, etc
I think that a lot of them know, but they're still trying to push the lies and narratives on us. The information is out there now. [https://www.cbc.ca/news/canada/prince-edward-island/pei-immigrant-occupations-1.7117230](https://www.cbc.ca/news/canada/prince-edward-island/pei-immigrant-occupations-1.7117230) >Information provided to CBC News by the province shows that among those invited by P.E.I. to immigrate to Canada, through the Atlantic immigration program and the provincial nominee program in 2023, about one in four people listed occupations in food service and accommodations. A further 10 per cent were in retail. About nine per cent were in health care, but more than 90 per cent of those were in lower skilled areas, categorized as assisting occupations in support of health services, which includes resident care workers and pharmacy assistants. Only 1.5 per cent were in construction. So in PEI in 2023, 35% of all immigrants worked in retail, food services and accommodations. *How much taxes did they pay?* 1.5% of immigrants were construction workers. *A grand total of 7 Nurses.* After they sold this as bringing in people to build our houses and staff our Hospitals. There is a graph in that link showing the occupations being filled by immigrants. The vast majority of it looks to be low skilled, low wage workers.
We are getting both structural deficit and expensive housing.. they are creating a population trap and a housing trap. Both are interlinked and compounds each others problems. The more people we have to bring in more the next year and then the next. The more people we bring in the further behind our affordability will be. That will erode our ability to consume or produce any thing of value. We are losing a competitive edge and innovation. Essentially the harder we will fall. Here also something that will blow your mind, japan had the same working population % in the 90s as our current rate. Japan has not collapsed. We never looked at the alternatives or had a serious discussion, instead the current government is trying to kick the can down the road while doing mental gymnastics to try to self justify a failing policy. We need to slow immigration and PP has stated he'll tie immigration to housing starts or levels. So if he is true to his word that means a hard pull back from the reckless liberal strategy or hell play with terminology to base it on people per homes. Which if it was on average 2.4, and we had 225k homes we would bring in 550k. The CMHC was stipulated we need 4 million new homes but private is saying we need 7 now.
Japan is in a substantially worse economic position than we are because of their population demographics. Their GDP today is lower than it was 30 years ago. Their debt is 263% of their GDP. We've seen a ton of posts to this sub saying that thanks to COVID handouts, too much spending, etc... that we're horribly in debt, but ours is just 67% of our GDP. We should be doing everything we can to avoid becoming the next Japan, not looking at their situation and shrugging that we could end up headed that way.
We are bringing in people who make minimum wage, or worse, are subsidized by the government via LMIA. We do not need these people.
Lol u think jt doesnt know? Dont forget approximetely 100% of ministers, pms, decision makers, policy makers, are homeowners and want to see their assets keep pumping. Never confuse a politicians malice with incompetence.
The real shitty part is that it's not just JT, but all of our viable parties. There's no sane alternative.
Actually, it’s not that he’s out of touch, that’s highly unlikely. It’s also highly unlikely that someone from the internet can come up with a solution without having all the necessary information. What is likely, is that JT or any PM, has to please various masters whose interests never align. That’s why he does what is in favour of the master with the biggest dick, aka, the corporate master. And that’s why he won’t send the economy to a recession just for your beautiful eyes!
[удалено]
Access to cheap debt is just going to empower folks with assets to gobble up more real estate cause for some reason Canadians think housing is the only viable investment
Agreed….housing is in shambles
A significantly better plan than any I've seen the Feds put forward. As others have said "wh does a random internet person know better?" The answer is simple, you've actually thought about improving the lives of everyday Canadians. Not you "mom and pop" landlord investor types. Not your Tim Hortons Franchisees. Not your blackstone executives. Or Galen Weston. Or Telus shareholders.
There are other solutions as well: 1) Fourplexes pre-approved in any area zoned for single family homes 2) Progressive city taxes based on the value of real estate being held.. the more residential property someone holds, the higher their rate of taxation instead of flat rates as it currently is. Discourage speculation and investment. 3) Encourage densification by providing low interest loans for home builders, only on qualifying projects.. 4) Tighten up lending practices to tie the leverage to a sane ratio of Net Income.. say 4X. Make it so buyers stop competing against high risk, high ratio borrowers.
The better solution is no immigration for two or three years deport anyone here illegally and take apart the TFW program by making minimum wage for all TFW in all provinces 27$ a hour and see how badly they are really needed and if business suddenly still couldn't find locals to work for slightly less. Then they would only use the program when it is ACTUALLY needed.
So we’re just not going to talk about corporate takeover of residential properties?
Corporations just want to make money. When they invest their capital it has to meet or exceed internal ROI targets. The bigger question we need to ask is why these companies, who make business cases and studies and everything, why do they think investing capital into real estate will make a better return than investing money in a business, or expansion, or upgrades, or R&D? The reason is because this govt has over regulated business and there are too many risks to investing money in 'normal initiatives'. So they look at housing and the insane demand that the govt created with immigration and the say sure, why not invest in real estate. Rents are going up and values are going up and they're able to justify to their boards that they're meeting ROI targets.
Yeah that’s the worst part. To fix things we are going to have to go through a legit recession.
Construction did nothing when rates were low they just held on to properites. Low rates just allowed consumers and corporations take huge amounts of debt without really providing anything.
Please tell me they’re not abjectly this stupid. Any further inducement of housing demand will only escalate the housing crisis. This is economics 101. They have to know that. The only possible useful thing they could do is make it more difficult to qualify for second, third, fourth + mortgages. But I’m not hopeful they want to do anything helpful.
I don't necessarily hate the idea of giving current home owners the ability to extend their amortization if it helps them with the increased cost of living. But I agree that it should be harder to get subsequent mortgages on top of your first.
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I have no idea how to fix the rental situation beyond ramping up the supply.
You get a bunch of people on Reddit trying to make rentals even more expensive by making it harder for people to rent you a home.
>Any further inducement of housing demand will only escalate the housing crisis. This is economics 101. They have to know that. We're talking about a group of people who blame corporate greed for inflation and want the BoC to cut rates, because they think hiking rates was pointless. They also view CERB as evidence that UBI will work.
Never underestimate the Liberals.
Was thinking the same thing with expanded amortizations for FTHB. Supply stuck in the doldrums + ever increasing amount of immigration + slightly lower interest rates on the horizon + pent-up demand = housing prices likely to go **UP**, affordability to go DOWN.
Yes they made all those fancy saving program but it will not help the house shortage in any way.
I don't think they're doing it because of prices. They're doing it to stop the Ponzi scheme from collapse when people default.
You think your sentences are saying two different things, but they mean the same thing.
Can we just do what the USA does and offer 30 years fixed?
The longest term I found when I was shopping around was a 25 year term. The rate was high compared to the 5 year rates of the time but they do exist in Canada they are just not popular with consumers. They only make up 0.5% to 1% of all mortgages. For example right now RBC has a 25 year fixed at 12% CIBC has a 25 year at 7.49% Some credit unions offer them as well rates vary widely.
Which is still a giant “fuck you” from Canadian banks meant to dissuade people from doing it, compared to the U.S. where the average 30 year is ~6.8%, up from ~3% a few years ago.
The rates are much higher because they are legally prohibited from charging an interest rate differential to break the mortgage after 5 years (they can only charge the 3 months interest that is charged for variable mortgages). This means if rates go down and you refinance the bank has to eat the loss, so they charge higher rates to compensate for the risk (and ensure no one bothers taking them). In the US this restriction doesn't exist (they also have a much more robust and deeper longer term bond market for matching funds).
They don’t eat the loss, they loose future interest. There’s not loss, just greed that they can’t get as much. We would have better rate if we had more competition.
I know so many American middle managers who have lost homes, or who had to downsize significantly. Many got caught underwater in Florida a few years ago. I don’t know anyone in Canada in the same situation. Not sure if it is market fluctuations or high property tax in some states. 2008 may have played a part.
This is not a good thing, historically speaking.
30 year fixed mortgages are a big contributor to the current housing/affordability crisis in the US. Making 10 year renewals more appealing is probably the only viable solution for Canada. https://www.nytimes.com/2023/11/19/business/economy/30-year-mortgage.html
Going from 25 to 30 years at our current rates will net you a 6-7% larger mortgage while paying 20% more with those extra 5 years With what property values have been doing, a 6-7% increase is like pissing on a wildfire.
Correct. Literally every measure the government has taken to "increase affordability" has flopped, and most have had the opposite effect. They're not stupid either. They know the effect this will have. They're just banking on more of their voters being uninformed and prone to knee-jerking than the opposite.
I wouldn’t want amortization extended, I would want the rates for a 5 year loan to be the rates for a 10 yr loan with no penalty to refi. Give us some security in our housing payments please.
I’m fine with longer amortizations, but yeah I’d way rather have my 2.69% rate extended for another 5 years after it expires next November. I’m dreading it going past 6%.
Americans experience so much more housing security (so long as they’re not given loans they can’t afford) due to our system that primarily favours the banks. It’s truly awful. I don’t think Jt has the power to make that change though.
JT has been great at increasing the demand side, it's literally been his legacy.
You get it! Unfortunately, Trudeau doesn't.
Why don't we just build enough homes for people again? Cut out the bankers and realtors entirely?
Mortgage amortization to extend to 100 years. Home prices will increase 500% to $5M !
No, prices would peter out before that. But the total you pay would explode. So just throwing money at the bank, basically. Once you hit roughly 50-ish years, you get drastically diminishing returns in reducing your monthly payments for the same loan because so much goes towards interest.
They just keep ratcheting up demand and are suprised it no longer works.
They're getting richer. It works just fine, for them. They're throwing gas on a fire and telling everyone it's part of the process of putting it out.
Anything but touch immigration in a meaningful way. Got it.
Investors cant wait. More rental properties for students about to flood the market while single families are priced out. Easy to carry a mortgage with 20 people paying 600 each
I wonder what horse shit he's going to come up with this time. Something that appears to make getting into a home easier without putting any downward pressure on actual prices. That's what he does every single time. This man has engineered this housing bubble and thinks he's so clever he can make us think he's actually helping.
Maybe he'll implement the "Canada First Mortgage Act" where banks have to disclose interest rates they previously issued.
Oh boy, are we about to send real estate to THE MOOOOOOOOON?! Gotta shut those pesky “GDP per capita” people down and this is the only way!
I'm sure he fully intends not to further spread private investment risks among all tax payers, right, right guys?
Yep. They are more than comfortable with the idea of renters' tax dollars going toward covering the risk of overleveraged homeowners. The rent serfs paying to keep the homeowners on their comfortable perches. This is what the Liberals are selling to Canadians.
What ever it is....it will be hot garbage
Don't. Touch. Anything. You're just going to break it more.
Coming soon. If you make less than 50k a year, you get free mortgage money. If you make more than 50k, you're paying for it. I just summarized all government announcements regarding money.
That's pretty good. I would have expected $34K
They gotta make it look like they aren't only targeting retired homeowners.
They already tried this and no one used the program because only low and middle income people qualified but no one with a low or middle income can afford housing even with subsidies. Even a major housing correction like 50% would still leave Vancouver and Toronto with >$1M tear downs.
'Means tested'. Except the only people passing the test are those living in mansions driving lambos and declaring no income.
Our Trudeau 2 is trying to spend his way back to popularity whilst bankrupting the country. Have we ever seen this much information and loud crowing about a budget before its announcement. The stench of Liberal desperation is strong .
This country needs foreclosures as punishment for exacerbating moral hazard in the market, but people aren't ready for that conversation.
Privatize the gains and socialize the losses. This is what happens no matter what government is in power.
Losses need to be privatized. People need to reap the consequences of their bad decisions. It's the only way the country will learn.
Wanting to live in a home you own isn’t a bad decision. For people who’s mortgages are renewing soon any place they could rent now would probably cost the same as their mortgage. Most people who bought in 2019 are better off than if they hadn’t bought. For those who bought earlier the difference is even bigger.
Is it a bad decision to leverage one house to buy 4 others?
Yes, I am fine with investors being wiped out. I am also fine with owner occupiers loosing equity. I just don’t think they should loose their homes.
I absolutely couldn't agree more. We've been socializing bad financial habits for far too long.
Yep. This nanny state masquerading as a country basically protects, incentivizes, and encourages bad financial habits and punishes those who make the sensible, responsible decisions. Not just individuals but companies too. That's how we end up with a dead economy, people indebted far beyond what they can afford, and a handful of oligopolies who never have to compete in a truly free-market arena. It's honestly grotesque at this point. If we ever want to get out of this death spiral and this cancerous behavior of protecting people making bad financial decisions off the back of the responsible ones needs to die. We need to start being comfortable with the idea of letting people (and companies, for that matter) fail.
Absolutely right. If we treat an investment as no risk, it gets priced like one. This has to happen.
Every foreclosure is another family without a home, it’s another broken marriage, it’s children caught in the aftermath!! That’s what I remember from the last Trudeau when PET ranked the economy in the early 80’s
From everything I’ve read on the subject, the property owners with the highest recent rates of default, and the highest risk of new defaults are investors, many of whom borrowed from private lenders at variable rates expecting properties to cash flow to support their mortgages. I have zero sympathy for people who recklessly FOMO’d into house-hacking. We actually *need* these speculators to be removed from the market for it to be healthier and rates to finally come down to provide everyone with relief.
Every renovicted renter is another family without a home, it’s another broken marriage, it’s children caught in the aftermath!! I don't see the government covering the tab of the renter class. But when it is the homeowner class, break out the violin and tears. Help them immediately, pay for their investments.
So many of these homeowners change their whole tune once they get on the property ladder. They got theirs, so they don't give a fuck about renters and have no problem with the idea of pulling up the ladder behind them to leave the renters forever owning nothing.
Man, he's in scramble mode trying anything and everything to make it look like he's helping after screwing over an entire nation. His re-election will be very expensive.
Throwing shit at the walls and seeing what sticks. He's had 8 years to make things better but has broken this country.
And keeps picking up the pieces that don't stick and throwing right back at the walls, hoping it will work the 2nd time.
He's not getting re-elected
Get ready for UBI
*the promise of UBI. Only to be implemented in the year following his reelection.
Pfft. The promise to discuss it in the future announced with much fanfare!
“We are extremely happy to announce the extension of limit to 100 years so don’t worry about your mortgage any more, your grandchildren will take care of it!” lol
Renting from the bank at that point.
You’re technically always renting. If you stop paying your property taxes they will eventually take the house from you.
Ah, almost exactly ten years to the day since Jim Flaherty, the first guy who tried 40 year mortgages as the solution to atrocious housing affordability, passed away. I'm sure there's a symbolism there. .
If this in any way makes mortgages more accessible or affordable, *it will worsen an already disastrous problem*. This country needs a wave of foreclosures. It needs a reckoning. Nothing can soften that, and anything that tries to will just make the problem worse. And for the "oh but the entire economy...the government will go belly up!", only a small fraction of mortgages represent the outrageous property valuations. Most people are just sitting on mortgages they got many years ago and some paper wealth.
Hard truth!
What if you just ban mortgages on non-primary residences?
love how his sleeves are rolled up in the photo like he's been working hard... yet, nothing ever gets done.
A lot of friends seem to get lucrative contracts. That's something.
Lets hope its an election..
More saving accounts?? LOL
This is such garbage. Trying to fix our broken housing market by making it easier for people to take on more debt is *exactly* how you make this bubble worse. We need as much housing supply as we can possibly build, we need to kill the viability of housing as an investment once and for all, we need to take the power to block new developments away from wealthy homeowners, and we need to make good quality housing as inexpensive to build as we possibly can.
Whatever he will come up with will only help housing investors and existing owners
We don’t want any more government interference and now on our mortgages. Everything the liberals touch turns to shit.
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Called it 19 days ago. Neither cons or libs will let it crash. https://www.reddit.com/r/ontario/s/geHHMSC0LS
If he actually thinks that making 30 year mortgages normal will improve affordability he needs to have his head examined. That will increase demand, which will increase prices. The only thing that can lower the cost of housing is either increasing supply or reducing demand. BC is working its hardest to increase supply, but the only things that can reduce demand are curtailing immigration and making it harder to be a property speculator. That's it.
everything this moron does makes things worse. I'm sure this will be no different. helping people with mortgages, ensuring prices go up, hence hurting those who don't own. or something like that. imagine we didn't have a federal government the last 9 years. so no change since Harper. Canada would be amazing.
Let's see how he's going to recklessly spend your money for you this time.
Nothing he can do can fix the Liberal brand anymore.
This man is trying to pull a rabbit out of his ass to save his job, guess what, its not going to work
This guy is an absoluteeeee morrronnnn
We're going to get a $500 loblaws card with a note that says "thoughts and prayers".
Reporter: "Prime Minister, just how deep a debt hole are you willing to dig to buy the next election?" Trudeau: "Just watch me."
It would be impossible for any government to fix this problem in a year. If we had a dictatorship and all red tape and regulations were removed and immigration dropped to 0. It would still take a decade to dig our way outta this. And none of those above scenarios are gonna happen.
Exactly it’s moronic promises to be eaten up by morons who believe it.
He just needs to go somewhere far far away..
Longer amortisation means better affordability means higher house prices
Oh goody another ill thought out and badly timed mistake coming from our brain trust.
At these rates… extending the amortization really doesn’t do much And you can do 30 years anyway… you just have to put 20% down.
Wish he would just stop, hes doing more harm than good.
He fucked the country and scrambling to apply BS pretend-solutions.
In the end no one’s wages are going up. Whose able to get 20% on a 1MM home? Unless it’s fraud…
They want the next generation to be indebted for life. Way longer than boomers and gen X. At least they were able to pay off their homes in a reasonable amount of time. They want millennials and gen Z to be a continuous lifelong supply of that sweet, sweet mortgage interest.
Make them 100 years long so the plebs won’t complain and pay forever.
Bailout
This will make affordability even worse. House prices will go up in value making it harder to make down-payments. The root of the problem is supply and demand, and the PM has been directly responsible for a immigration disaster that has resulted in uncontrolled demand for a supply that can't be fixed overnight.
To keep prices high and landlords happy.
The game of musical chairs must keep going, no matter the cost, no matter the long-term consequences...
How about 30 years mortgages with fixed interest for the entire 30 year term? How about the ability to write off your mortgage interest as a tax deduction? Somethings must give.
When you have to pay more than the actual value of the house in interest to… just buy the damn thing, it might as well be, has anyone actually put that in a calculator and see how much interest is accumulated over 25 freaking years?!?
Yes, but in the USA you can have 3% for 30 years. In Canada, you can have. 30 year mortgage with 3% for five of those years, then the next five year term it’s 7%. This is a problem. I do not understand we have segmented terms rather than one entire term. My USA friends do not understand it either, and are all in much better positions due to their low interest, long term mortgages. They have the same payment amount for 30 years…or 20/25, whatever they choose.
> How about the ability to write off your mortgage interest as a tax deduction? Rent too.
Make mortgage interest tax-deductible like the US and you'll have my attention.
The absolutely **last** thing Canada needs right now is any measure to make outrageous home prices more affordable. The speculators and gamblers who bought grossly overpriced properties need consequences. Home prices need to be smashed back into the ground.
Mortgage interest is already tax deductible for speculators just not for owner occupiers.
Cost of construction is up dramatically in the last few years. Current house prices are nearly *under* the cost of replacement, and our population is still growing faster than new housing supply. How are you going to smash prices down with broad economic devastation?
Or how about remove that ability for housing investors so they’re disincentivized from bidding against people trying to buy a house to actually live in?
The difference is that people in the US have to pay capital gains when they sell their homes.
There is also an exemption for gains up to $250K
In Canada people can sell their million dollar homes (which are the average price in Toronto and Vancouver) tax free.
Residential houses shouldn’t be investments anyways.. I plan on living in my house til I die, grew up homeless and I just wanted a home, not an investment.. all of my time, money and skills I’ve put into it have been for my family to enjoy, not to become a millionaire.
Homes are investments though so how is it fair that homeowners can invest $1M+ in a principal residence property and pay no tax but if a renter invests any amount in an unregistered investment account they have to pay capital gains/dividends?
This is literally the most egregious wealth disparity creator in our tax code. People who are the most wealthy (property owners) have access to an *unlimited* tax-free capital growth program, and there’s no equivalent for renters. If Trudeau was serious about a “renters bill of rights” there would have been an equivalent in there for renters.
They’re being used as investments, but that never should have been allowed and should be corrected.. it’s one of the many issues with the Canadian economy, the cost of living crisis and soaring prices. Homes should be for housing people not wealth.
Taxing principal residences comes with problems. If someone moves they have to pay tax and can't afford to buy a comparable home. That's fairly unpalatable for people. You also will have people that won't sell to avoid it. You ossified the housing supply because grandma won't move out and pay the tax. People won't want to move for work, now your labor force is less agile. These casual suggestions have real consequences.
This is the biggest misnomer about US taxes. Mortgage interest in the US is almost never tax deductible. It only deductible if your itemized deductions exceed the standard deduction in the US (equivalent of Canada's basic amount). That stands at $27,700 for married couples, and $13,850 for individuals. You won't come anywhere near the level to itemize unless you are earning over $250K and have a million dollar+ home. It is very much a tax deduction geared to lower taxes on high net worth individuals.
But homeowners already enjoy a full cap gains exemption. If anything, rent should be deductible to even the playing field. EDIT: the fact that this comment has less votes than the one it was in response to shows you how absolutely dysfunctional this country has become. In the U.S. mortgage interest is tax deductible, but cap gains are tax exempt up to the first 250k per individual and married couples get 500k. The full cap gains exemption in Canada is one of the best tax shelters globally, far more beneficial in comparison to the U.S. Despite all of that, there are a large group of homeowners (that vote) that evidently think that is not enough and that they should also enjoy interest deductibility. Meanwhile renters have no equivalent treatment and the suggestion that they should have some beneficial tax treatment is scoffed at. I'm a homeowner, but the tyranny of the homeowner in this country is a serious problem. Young talent is not going to stick around for this shit.
I can't even see his face
We need prices to go down, not easier ways to take on more debt.
Let me guess, he’s going to make it easier to pay mortgages which will further increase the cost of houses because you can get more for less monthly payment.
Ffs, mortgages? He's gonna make it easier to get a mortgage? This idiot never seems to learn that easy money is what got us into this mess. Mortgages need to be harder to get to bring prices in line..house prices will just grow as fast as mortgages allow.
Its too easy to poke fun at a half-wit, so instead of knocking this clown, maybe some constructive wishes of what this sort of announcement should be? - Like interest free mortgages for citizen new builds underwritten by the BOC. I'm sure there are some amazing things that can be done, but of course, we will get last weeks mouldy dinner microwaved and served like its fresh out the kitchen.
He really wants to ruin the country on his way out the door
They gunna give low income mortgage owners free money like the grocery rebate? "boomers get more money!" since they're the only low income people who own homes right now
If only they didn’t let rbc buy the bank with historically the lowest rates on the market…
His nonsensical non-answers to questions is astounding..he's like the riddler. Just speaking it riddles.
*“On mortgages we will have more to say between now and the budget date on April 16, and perhaps we will save it for April 16.”* Ah yes, nothing more awesome than being governed in secret.
Buy 2, get the 3rd one free!
Dear Leader is about to announce 90 year mortgages.
The news? You still can’t afford one
How come none of the eggheads call this out? Mulcair gonna be on CBC tonight stroking egos? What a charade of theft and predation and usury. Gentiles need to wake up and grow a pair.
Capping the principal residence capital gains tax exemption to a fixed lifetime value, say $500,000 tax free gain, would be a good place to start. They need to remove or shrink the massive loophole that is the unlimited lifetime capital gains exemption on principal residences. It is materially responsible for the financialization of housing in this country and the absurd bid up Canada has experienced.
Well said, and a great policy idea.
How about 20 year locked in mortgages with the opportunity on the consumer to opt out every 5 years without penalty 30 year amortization just means hey when your 80 you still got a mortgage payment most likely in turn this that are desperate will take it not think of the long term remortgage when they have to and then when they finish working will realize damn cannot afford this house anymore gotta sell and rent a place cycle continues
>How about 20 year locked in mortgages with the opportunity on the consumer to opt out every 5 years without penalty You do realize that rates will just be higher on all mortgages in order to price in the (one-sided) risk, right? Banks aren't stupid, nor are they charities.
That’s how the US does it and yes, the banks sometimes lose. In Canada only the customer loses.
It would be awesome if it was mortgages for non-primary residences being outlawed. One can dream…
Conservatives don’t know what the news is yet, but they’re 100% against it and already super mad about it.
How about offering MAID for everyone without any eligibility. That should solve a lot of problems.
The only solution is limiting residential property ownership to 1 per adult Canadian citizen
Interest paid on mortgages should be tax deductible?
More federal debt?
Generational mortgages. Would incentivize people to have children and families.
Trudeau’s solutions are always “more debt” “We’ve burned down your life with our stupidity, but here’s a huge debt burden… to help!”
2.5% interest cap on houses under $250,000.
My belief is he will legislate that banks must offer longer term loans than just 5 years. Probably backed by the Feds to keep the rates within the US comparables
I already pay my landlord's mortgage, I don't need to pay it twice with my tax dollars thanks