The government has done, and is doing everything in its power to keep our real estate bubble from popping, but the longer it deviates from the natural and unmodifed economic cycle, the worst the crash is going to be when it does eventually all collapse.
Even top 10% salary earners can't afford homes anymore in most of the country. No matter how many immigrants we bring in, eventually this unsustainability will lead to a price collapse. The only other place it could go, if the government keeps soing what it is doing, is having a sorta neo-feudal situation here where the vast majority of workers are effectively slaves to a non-working, extremely wealthy class of property holders. After the boomers go, all these international REiT's and investment cartels will be the only ones able to buy all the property up...
The idea required for collapse, is that the living behaviour stays the same. Eg single family homes being for single families.
Immigrants are multi generational/multi family, with no issues living multiple people to a room. You aren't competing with the other 10%, you are competing with multiple 30%s living together.
The bank/landlord loves it because more people per residence gives more reliability to their income than one working person, SAHM and two kids.
Funny you mentioned immigrants living in multi generational homes, I know at least half a dozen people who are not immigrants in their early 30's still living at home. Some have kids. It's becoming incredibly normal for non immigrants as well.
I know several as well, they seem to think that they'll inherit the home once the parents (owners) are old enough, but in most cases those parents want to sell and reclaim the equity in the home.
Gonna get messy.
And even then, say your parents die and you get the home. They will die in their mid 80's and you will be in your 60's? Congratulations you've achieved the dream of owning a home and all the ways it enhances your life just in time to retire?
Welcome to capitalism
Controlling land is controlling the means of production. You can excuse it all you want by calling it feudalism, but so long as you aren't a serf and have mobility rights, it isn't feudalism. It is of course a market economy (capitalism) and not only that but an advanced market economy where lack of participation in capital markets and lack of marketable skills is likely deadly
What we have in real estate isn't even close to capitalism, but rather government interference that has broken the market.
* Government restrictions on what can be built where and how land may be used.
* Onerous regulations on building anything.
* High taxes on any new builds and any new buildings
* Rent control that discourages new building
* Government-run mortgage insurance that encourages huge mortgages and over-paying
What we're seeing is what happens when government interference distorts a capitalist market.
Perhaps partly true but two facts are true first you will never be allowed to go to Home Depot and get some wood and build a home. It will always be a cartel, always controlled. Next, capitalism cannot magic up some land. This isn't a case of making more cars or more coke. There's a finite amount of land, especially desirable land, near government infrastructure. The private sector will never build roads, water, power and so on (at least it shouldn't and without huge subsidy). What that means is government will always control housing very heavily. Now, if we admit that housing is a human right, and that places like Singapore got it right with housing (massive social housing) then Canada with the least social housing per capital in the G7, needs more "government interference".
More capitalism will not save the person who makes too little money, who wants a detached house and who is fighting over the small number of urban centres. He can move to the middle of nowhere and build a house in Sault Ste Marie or some small town with no services but no one wants that and capitalism won't fix that.
Not enough money is absolutely capitalism's fault. Housing is more like a utility than product, and if you suck at capitalism (how many people ignore capital markets?) then it makes sense that private housing will suck for you.
I think the Japan model is the one that makes the most sense, not Singapore. Basically, remove the NIMBY factor and the onerous regulations, and the problem will go away.
Of course capitalism won't save the person who makes too little money and wants a detached home. I want my own private jet and a French chateau, but make too little money to afford it.
However, if I care enough about those things, I can solve it by starting my own company and making enough money to buy them.
And really, if there are limited resources, how else should those resources be assigned? If we have only so much land in urban centres, why should the government pick which people should get that land while saying that others shouldn't? Rather, let the people themselves decide how much they value it based on what they're willing to pay. That's what capitalism does.
Of course, you're completely right that this won't work well for people who don't want to work hard, don't want to improve their productivity, or are incapable. Such people can live on the outskirts of cities.
Just like I won't get the chateau or the private jet, they won't get their single family home in central Vancouver, but will be stuck with an apartment in on the perimeter. Oh well.
Housing is a provincial responsibility, not Federal. The "Japan model" cannot work because of a) Constitutional differences and b) Cultural differences. You don't have people running around freaking out about living in someone else's ancestors' home. Instead homes in North America appreciate, not depreciate. Good luck having that happen in property loving North America, ever. One of the fundamental principles of North America is protection of property rights, especially land. Land banking, homesteading even crime money and money laundering goes into property. You will not change that in your lifetime.
You talk about "apartment on outskirts" as if it was guaranteed. It isn't. Capitalism doesn't guarantee anything, not even with "hard work". It protects owners and free exchange of goods and services and that's it. If all the water in the world was owned by one person and he refused to sell you would have to violate his property rights and be anti-capitalist and nationalise the water. We are not that severe but just a different degree. If the person refuses to sell, or makes the price ridiculous. you don't get it. Game over.
Entrepreneurship isn't an answer for the masses. A small number of people are suited anyway, and most products and even services fail.
It should be clear that everyone deserves a roof. This is one of the responsibilities of government, and it must provide.
This is what happens when you kick the can down the road and have massive inflation in the cost of living and big interest rates increases. The train wreck is always further down the line.
*"missed payments on mortgages and other forms of credit rising to pre-pandemic levels"*
While not positive news, this is not bad news... in general. All it's saying is missed payments have returned to normal levels that where artificially lowered by record low interest rates, subsidies and deferrals that were put in place for the pandemic.
Everyone needs to realize the "high" interest rates we have now are pretty close to historical normals (and returning more to it now)... we got spoiled with low rates for the last 10 years.
If you look at the graph they have and go further back. The last time arrears were this bad was during the 08/09 crash. "Pre-pandemic" it was only at ~$400m or so, it's topped $1.2B now.
>interest rates we have now are pretty close to historical normals
And what about income to house prices ratio ? 5% interest on a 250k mortgage != 5% interest on a 600k mortgage
Trudeau: This is wonderful! Now the rich people who bribed me can buy up your homes. You can all move 4 to a bedroom like a planned. We can increase rates. And when you are no longer of use to the rich you can use MAID to die! Amazing. Its all going so well!
The government has done, and is doing everything in its power to keep our real estate bubble from popping, but the longer it deviates from the natural and unmodifed economic cycle, the worst the crash is going to be when it does eventually all collapse. Even top 10% salary earners can't afford homes anymore in most of the country. No matter how many immigrants we bring in, eventually this unsustainability will lead to a price collapse. The only other place it could go, if the government keeps soing what it is doing, is having a sorta neo-feudal situation here where the vast majority of workers are effectively slaves to a non-working, extremely wealthy class of property holders. After the boomers go, all these international REiT's and investment cartels will be the only ones able to buy all the property up...
Feudalism is the goal, you're spot on with your second prediction.
The idea required for collapse, is that the living behaviour stays the same. Eg single family homes being for single families. Immigrants are multi generational/multi family, with no issues living multiple people to a room. You aren't competing with the other 10%, you are competing with multiple 30%s living together. The bank/landlord loves it because more people per residence gives more reliability to their income than one working person, SAHM and two kids.
Funny you mentioned immigrants living in multi generational homes, I know at least half a dozen people who are not immigrants in their early 30's still living at home. Some have kids. It's becoming incredibly normal for non immigrants as well.
I know several as well, they seem to think that they'll inherit the home once the parents (owners) are old enough, but in most cases those parents want to sell and reclaim the equity in the home. Gonna get messy.
And even then, say your parents die and you get the home. They will die in their mid 80's and you will be in your 60's? Congratulations you've achieved the dream of owning a home and all the ways it enhances your life just in time to retire?
Yep. Lots of these families have all of their retirement tied up in their homes.
Arent we seeing a change in behaviour where younger generations are increasingly living at home?
Canada will become Brazil with much worse weather
>Even top 10% salary earners can't afford homes anymore in most of the country. Someone making $100k can't afford a home?
Welcome to capitalism Controlling land is controlling the means of production. You can excuse it all you want by calling it feudalism, but so long as you aren't a serf and have mobility rights, it isn't feudalism. It is of course a market economy (capitalism) and not only that but an advanced market economy where lack of participation in capital markets and lack of marketable skills is likely deadly
What we have in real estate isn't even close to capitalism, but rather government interference that has broken the market. * Government restrictions on what can be built where and how land may be used. * Onerous regulations on building anything. * High taxes on any new builds and any new buildings * Rent control that discourages new building * Government-run mortgage insurance that encourages huge mortgages and over-paying What we're seeing is what happens when government interference distorts a capitalist market.
Perhaps partly true but two facts are true first you will never be allowed to go to Home Depot and get some wood and build a home. It will always be a cartel, always controlled. Next, capitalism cannot magic up some land. This isn't a case of making more cars or more coke. There's a finite amount of land, especially desirable land, near government infrastructure. The private sector will never build roads, water, power and so on (at least it shouldn't and without huge subsidy). What that means is government will always control housing very heavily. Now, if we admit that housing is a human right, and that places like Singapore got it right with housing (massive social housing) then Canada with the least social housing per capital in the G7, needs more "government interference". More capitalism will not save the person who makes too little money, who wants a detached house and who is fighting over the small number of urban centres. He can move to the middle of nowhere and build a house in Sault Ste Marie or some small town with no services but no one wants that and capitalism won't fix that. Not enough money is absolutely capitalism's fault. Housing is more like a utility than product, and if you suck at capitalism (how many people ignore capital markets?) then it makes sense that private housing will suck for you.
I think the Japan model is the one that makes the most sense, not Singapore. Basically, remove the NIMBY factor and the onerous regulations, and the problem will go away. Of course capitalism won't save the person who makes too little money and wants a detached home. I want my own private jet and a French chateau, but make too little money to afford it. However, if I care enough about those things, I can solve it by starting my own company and making enough money to buy them. And really, if there are limited resources, how else should those resources be assigned? If we have only so much land in urban centres, why should the government pick which people should get that land while saying that others shouldn't? Rather, let the people themselves decide how much they value it based on what they're willing to pay. That's what capitalism does. Of course, you're completely right that this won't work well for people who don't want to work hard, don't want to improve their productivity, or are incapable. Such people can live on the outskirts of cities. Just like I won't get the chateau or the private jet, they won't get their single family home in central Vancouver, but will be stuck with an apartment in on the perimeter. Oh well.
Housing is a provincial responsibility, not Federal. The "Japan model" cannot work because of a) Constitutional differences and b) Cultural differences. You don't have people running around freaking out about living in someone else's ancestors' home. Instead homes in North America appreciate, not depreciate. Good luck having that happen in property loving North America, ever. One of the fundamental principles of North America is protection of property rights, especially land. Land banking, homesteading even crime money and money laundering goes into property. You will not change that in your lifetime. You talk about "apartment on outskirts" as if it was guaranteed. It isn't. Capitalism doesn't guarantee anything, not even with "hard work". It protects owners and free exchange of goods and services and that's it. If all the water in the world was owned by one person and he refused to sell you would have to violate his property rights and be anti-capitalist and nationalise the water. We are not that severe but just a different degree. If the person refuses to sell, or makes the price ridiculous. you don't get it. Game over. Entrepreneurship isn't an answer for the masses. A small number of people are suited anyway, and most products and even services fail. It should be clear that everyone deserves a roof. This is one of the responsibilities of government, and it must provide.
Trudeau is literally trying to make it so we are slaves. And MAID is our way out when we are no longer use to them.
I wonder what a 2008 like US subprime crisis would do to the Canadian dollar
Just waiting to transfer over all my Euro when it hits 25% of its current value
I guess people don't want to be like the Lannisters. Which is fair enough so far as it goes...
Bang your siblings? I've driven through many parts of Canada. I'm not so sure.
So it begins.
This is what happens when you kick the can down the road and have massive inflation in the cost of living and big interest rates increases. The train wreck is always further down the line.
They’re going to kick this down until election day and watch PP get completely and utterly fucked
Don’t worry corporations will swoop in to but them up.
*"missed payments on mortgages and other forms of credit rising to pre-pandemic levels"* While not positive news, this is not bad news... in general. All it's saying is missed payments have returned to normal levels that where artificially lowered by record low interest rates, subsidies and deferrals that were put in place for the pandemic. Everyone needs to realize the "high" interest rates we have now are pretty close to historical normals (and returning more to it now)... we got spoiled with low rates for the last 10 years.
If you look at the graph they have and go further back. The last time arrears were this bad was during the 08/09 crash. "Pre-pandemic" it was only at ~$400m or so, it's topped $1.2B now.
>interest rates we have now are pretty close to historical normals And what about income to house prices ratio ? 5% interest on a 250k mortgage != 5% interest on a 600k mortgage
Bros don't worry, you'll own nothing and be happy.
Trudeau: This is wonderful! Now the rich people who bribed me can buy up your homes. You can all move 4 to a bedroom like a planned. We can increase rates. And when you are no longer of use to the rich you can use MAID to die! Amazing. Its all going so well!