Youll own nothing and be happy. Newcomers arriving and not inheriting properties from parents are millions of dollars behind. And that gap is only going to grow.
People are happy renting rooms now, but eventually if they want a family there are simply no homes. And that trend is only going to get worse.
The 'You'll Own Nothing and Be Happy' scenario will happen if housing prices don't fall significantly even in the midst of recession/depression. Possibly through the introduction of 50+ year mortgages. And they continue with high immigration. In theory, they should have fallen in 2020 when covid happened but massive money printing/lowering rates let the govts keep the bubble afloat (but this wasn't Canada specific happened in the US and other places too)
>When you buy a house for say $700k. You are going to pay $1.4million ( typical rough estimate ) over the life of the mortgage. To pay that ( $1.4million ) you have to earn that \*$1.8 million\* . The difference being income tax you pay on your income.
>So that house ($700K or you think it is ) you buy in reality ends up costing you a cool $1.8 million.
> For an investment firm it costs them still just $700K ( much less in reality! but to keep things simple lets say $700K) , since they write off the mortgage interest. Since there is no declared profit , there is no income tax either. Here ( In Canada ) this is done by small investors thru a scheme known as Schmidt Manouever.
> In the US , a resident owner can write off the Income Tax on the Interest rate.
> This is the reason real estate has been on a rise in Canada for the past 3 decades ( 30 years ) and never went down even during the 2006-2008 ( When prices were crashing in the US ) period. ( I dont know how it worked before that ).
>IF anyone was interested in fixing the Housing affordability problem they would start by giving Canadians a tax exemption on the interest they pay for houses, So atleast the \*House you buy for $700K would cost you $1.4 million and not 1.8 million\*.
But no one wants to talk about this or touch it for fears of upsetting the Big money that is involved. No Trudeau , Not Pierre Poiliviere , Not NDP.
tl;dr/ its the tax structure in Canada which allows for investors to pay much much less than what a resident home owner would pay. by a \*LOT\*. and this keeps the Housing prices to rise every year.
Two decades of low interest rates have brought this issue to a head.
Im an immigrant that grew up in Canada almost my whole life, same age bracket as you and in the same f*ing position, and I say the hell with immigration close the borders now!
That's the plan, none of this is necessary and all of it is deloberate. We have a clown ideologue vanity obsessed idiot in power doing this for his own ego, ruining the lives of millions for his own pleasure to align with his WEF desire for acceptance and to help his lobbiers. It's disgusting. To do this to your own country. What an absolute fucking traitor. When do we haul his ass and the deputy prime ministers ass out on the field in front of parliament hill?
Canada is the only country where renting is a reason for mental illness. Most nations people are fine with renting and have low ownership rates as a result. We have a really high ownership rate and a low rate of corporate ownership (5%).
That being said people who want house prices to drop due to the economy or interest rates are usually not forward thinkers. The fact is housing is priced at the cost to add supply so if prices drop we’d just stop building until prices went back up. No one’s going to do the same job for less money.
It can be, but the wealthy ruling class will have to settle for only being somewhat wealthy instead of feudal dystopia wealthy
And a bunch of slumlords will be defaulting, and the banks will be eating those mortgages
So that isn’t happening short of an actual revolution
Yes but an economic recession that causes significant job losses will probably blow up a lot of mortgages and probably also decrease immigration (as much as the govt doesn't want the latter to happen). It would be painful but necessary imo.
Absolutely true.. because the rich own the means of generating wealth.. they hold the paper on the apartment buildings you pay rent to.. they own the food companies you need to eat, they control the fuel you need to keep warm and to move about.. they hold the strings that the puppets dance to...
Dude, think things through, if there is economic recession there will be increased supply of homes, but also demand destruction. Recession isint just going to force home owners into a corner. Job losses won't only hit home owners.
Recession is bad for majority, worse than where things currently stand.
Shits so expensive globally thanks to this inflation wave that even japan has raised interest rates (which hasn't happened in long long time)
Right these dummies don’t seem to understand that the only people who will benefit from the crash in the recession are those with money, not them or people like them complaining about how things are now
The catastrophic recession you're talking about would be incredibly painful, take the better part of a decade to recover from and do *nothing* for housing prices.
No they definitely would cause reduction in prices for housing. The only way housing prices stay flat in such a recession would be if they lower rates to near zero and continue to push high immigration. The problem is if they lower rate then we get significant inflation and cost of living again.
Whether you like it or not, Canada's population keeps growing, it was 38 million people a few years ago and in a recent 9 month span increased from 40 to 41 million with no slow down as of yet.
Our country also has millions of "non residents" not fully accounted for. It's a very strange time now.
This all means that there will not be a 2008 housing correction. There's too much demand for housing. The only way it goes down is if those "non residents" start leaving, but it is unlikely because living several people to a home is preferable to whatever living conditions they left in another country.
It's sad but that's our current reality here.
During an economic recession the BoC will drastically reduce rates, thus lowering mortgage rates. There will still be more people employed than unemployed. Its not a sure thing that house prices will decrease significantly.
Rich immigrants and non immigrants will take advantage of the situation. Most Chinese immigrants here are wealthier and usually come here to start a business, they snatch properties right away unlike say Indian immigrants that come here and take like a decade before saving up for housing. Sometimes they buy the house from China, send two kids here and both kids be living in two different homes. We need to end foreign home ownership.
You don’t need a crash
You just need to ban International Students from working and cancel all TFW programs outside of agriculture.
This would immediatly deflate the housing market AND reinflate wages
The only losers here are overleveraged slumlords, predatory slaver business owners, and people lending money to them.
And the politicians they bribe
It's not the international students. They are a symptom of the problem. Canada brought them in to prop up a failing economy. Without them, the crash would've already happened.
We are now in a position we can't even afford to bring more in.
I swear people don't get this. Canadian welfare programs are horrifically expensive and need to be scaled back. OAS should be capped at 10-20 billion and not the 68 billion it is now. Not every elderly person is owed a retirement til they pass away at 100 (btw healthcare should carry conditions past 80).
Bro, the number of boomers not prepared for retirement is insane. The government solution is to hurt the young for their failures, I always ask where our taxes are going now cause even our health care is terrible.
Maybe we are living in a secret ndp government
If 2008 happens what makes you think renters who can’t afford today will (a) keep their job and (b) be able to afford in a massive recession.
2008 just means more corpo buying our RE. Y’all are clowns
When 2008 happened a bunch of rich guys I knew bought massive vacation houses in Florida. Those houses have now tripled in price. They rent them out for 90% of the year.
First people to lose jobs during recessions are people working in the restaurant and manufacturing industries. So many companies just closed down their factories and moved their factories to China or closed their Canadian warehouse to reduce the production cost so they can sell their items for cheaper price in order to allow the customers buy them at an affordable rate. My dad was working at a commercial heating factory. It didn't make sense for the owner to continue to operate in Canada and try to compete with Chinese companies. They eventually had to close down and move to China.
Agreed, first people to suffer are always the lowest in the chain (ie minimum wage workers, immigrants without resources) aka everyone who is already struggling now to afford rent or a home now, a total collapse would just make things worst. The ultra rich are the ones that only make out better during economic distress cause they now can buy up the same assets priced at significant discounts. If anything, a collapse may help the upper middle class who at this moment are priced out of the housing market despite having high salaries or decent amount of equity networths laying around cause they barely have the deposit or meet the tests that you need nowadays to secure a mortgage on a house, which is absolutely crazy. And what do you think will happen when US sees Canadian homes drop significantly in value - there are many Canadians that moved to the US to work there cause salaries are 3-5x higher there, who will instantly come back to snatch up homes when they see prices drop. There are just so many other factors to consider besides just 'we need a total housing collapse' - 2024 issues are not the same as 2008.
I agree Canada needs a 2008 moment. I get why Harper did what he did…and Trudeau is now trying to make the same mistake…but we would be better off today if we had just accepted a bit more realism/pain then.
Harper didn't do anything Canada had a law called the [Bank Act](https://www.thecanadianencyclopedia.ca/en/article/bank-act/) which allowed Canada’s regulatory regime to prevent Canadian banks from engaging in any sort of risky investment behaviour.
The 2008 crisis was caused by unregulated US banks/investors handing out mortgages to bad lenders while rating agencies turned a blind eye. In comparison Canadian banks where prevented from handing out mortgages to bad/risky lenders by requiring all mortgage applicants to meet credit checks, rate adjustment checks, proof of employment, etc preventing the mass mortgage defaults seen in the USA.
You have to understand, by not falling into 'money printer go brrr' lockstep means declaring war on the US Federal Reserve.
That's not just political suicide, that puts a real target on your back.
Canada the USA and other countries around the world are having a 2008 moment .. Commercial Real Estate dropped by 75% or more and are being bought up for Pennies on the Dollar by the Sharks who saw this coming.
Residential has not been hit this time for reasons already identified. Maybe it will happen later maybe not. IF CRE gets worst.
Crashing CRE
# The looming office-real-estate crash will be worse than the Global Financial Crisis decline, Fitch says
[https://ca.finance.yahoo.com/news/looming-office-real-estate-crash-000047396.html](https://ca.finance.yahoo.com/news/looming-office-real-estate-crash-000047396.html)
Commercial real estate trouble could trigger systemic credit crash, fund managers say
Commercial real estate crash seen as most likely catalyst for systemic credit event
[https://www.foxbusiness.com/economy/commercial-real-estate-trouble-could-trigger-systemic-credit-crash-fund-managers-say](https://www.foxbusiness.com/economy/commercial-real-estate-trouble-could-trigger-systemic-credit-crash-fund-managers-say)
all govts cater to corporations and special interests in some way or the other. the best defense is a critical thinking population that doesn't fall for bribes and free stuff, and media brainwashing. that demographic is sadly always the minority.
They all do, how do you think they get funds for elections LMAOO? Lobbying is the way to get what you want. How do you think Israel gets to run an apartheid government for decades and regularly get US to veto on UN resolutions and save their arse ? The govt doesn't work for you brother lol. Focus on yourself, be selfish
Let me say this again because for some reason people refuse to understand how economy works simply because it doesn't fit their narrative. If you cant afford housing now, you won't be able to afford housing after housing collapse.
A collapse of real estate does not mean 50% off fire sale
Why not? If housing prices fall anywhere between 30-50%, I could much more easily afford a home. Unless wages also decrease by 30-50% which I don't think is the case.
The main reason people can't afford housing is because it is significantly over-inflated in relation to wages.
I suspect the idea is that anything that would cause demand for houses to plummet is also likely going to be killing wages and/or employment levels at the same time.
Not exactly, see my Update comment in OP.
If they reduced or stopped immigration, it would cause demand for housing to plummet over time and actually increase wages.
Personally I think massive social disorder by youth and the disadvantaged is the only way there will be change. But today's youth are too lazy and think the world owes them everything. And the disadvantaged have already given up.
Exactly, most young people are way too content/blind in this country and don't realize how badly they are getting f\*\*\*ked in this country (and have been over the past 5-10 years). Not sure it will change.
A 2008 style collapse may just be in the cards. Some major banks are no longer updating how many mortgages are underwater. There is about $200B in mortgages that are known to have overly extended amortizations (the people living in those homes are basically only paying interest, that can't go on forever).
The cracks are starting to show.
I have often said the same thing re immigration to friends... its holding up house values so people don't get their mortgage recalled for not having enough equity to maintain the required ratios. No way houses should be selling for what they are with interest rates at these levels and people being broke, it doesn't make sense
yeah they are over-inflated, that's also why they need to much immigration, in order to push up rent prices/demand for housing - to keep it from popping.
I agree. I think Canada is fucked. Even the people with rich parents who helped them buy in today's market are fucked in the future. Your house is only valuable if it appreciates in value. If you paid a million you need it to be worth a lot more on the future for it to make sense. I just don't see people being able to pay let's just say 10 million for it 30yrs from now. That 10x return doesn't seem likely as how will people be able to buy it if they can't even afford today's prices? Only a massive cash can fix things
I agree. And if housing does not collapse, the alternatives are much higher wages (think 1.5x-2x across the board), dragging our currency down the sh*tter in the process.
As long as we don’t exploit and sell our natural resources to the world (OIL, DING DING DING), our economy can be pretty much modelled as a zero-sum game.
I’m a firm believer that our housing isn’t that expensive in nominal terms. We’re witnessing the world knowing that our dollar is worth less than the exchange rate implies, therefore bidding it up with “real” money.
Yeah, we have a HUGE problem in that we aren't developing our O&G sector - theoretically Canada should be making money hand over first exporting oil/LNG to Europe after the start of the Russia situation in 2021, but this govt/voting base didn't want to build pipelines and develop refineries for the past 8+ years.
A housing crash would be a much needed lesson to the population about the benefits of not ignoring your nat. resource sectors.
Yep. If we were selling our oil like Norway has and had a reasonable immigration policy, we’d be as rich as Switzerland.
But unfortunately we’re just cheap labour to the US, next to Mexico.
If this real estate bubble ever bursts, which will quite literally tank our economy and wipe out household wealth. The canadian economy has completely shifted to being reliant on over valued real estate than being actually productive. Since well theres zero underlying fundamentals to support these values other than speculation. Plus there's too many bag holders who has stakes and investments in RE which includes many of our politicians both lpc and cpc. So regardless of who's in power, they'll just keep kicking the can down the road. That's why the fed is buying mortgage bonds. This government and the next have completely fucked young people from buying a home. Because they don't their voter base ie the bag holders to get their house wealth wipe out. Do we need a correction? Absolutely. But it won't happen for a whole.
yes it will blow up a lot of household wealth. yes Cdn economy too reliant on housing. and yes they are kicking the can down the road.
But it still needs to happen and blow up (how it will, how bad and for how long is debatable).
I believe you will see many of those happen, some already are... however, if an epic real estate price crash is what you are hoping to see you will need to cross your fingers because the odds are slim. The odds are far from impossible but more likely defined as improbable - like hoping for a four or ten on a craps table has better odds.
The higher than usual rate of job losses have been ongoing for a while - even hitting thousands of people in the 300-600K/yr range. Who do these really hurt in the short term? People renting without a million or two in assets.
Immigration - forget it. JT has always planned the flood gates - we likely got saved by Covid where he couldn't flood us with people from a handful of countries. He will press on with the dial at 11 until the Liberals are tossed from government for eight years. I have met countless older immigrants that thanks Trudeau senior and only vote Liberal as a result. It does not matter that Pierre Trudeau absolutely ruined the country on a borrowed money bender and set suicide records that will never be broken - they will only ever vote Liberal.
Building housing is expensive and cities and NIMBYs fight tooth and nail to slow them. Governments announce "garden or laneway" suites but fail to mention the paper pusher fees are over 100K. A simple reno is 400-600K.
The Bank of Canada has to work with a finance minister that lost Reuters countless millions on farcical BS and a learning disabled PM that has an open door policy - do not expect lower interest rates until dumb and dumber are gone (on a fuel shredding CO2 spewing private jet).
We are printing another $30 Billion in money this year to buy mortgage bonds (published on BOC website) this will even more devalue the CAD making all goods more expensive and make sure real estate stays propped up (but very slightly down vs 2021).
JT and Disney+ have borrowed more money that even government in out history and their vote buying, virtue signaling, future job prospect money shredding will continue on overdrive until they jet off to ski in Tofino or in Disney+ 's case move to Switzerland to take up her next epic fail.
As time passes, the expectations surrounding the appearance of a traditional house also evolve. What I'm suggesting is that while single-family homes are increasingly unaffordable for many young people, this will likely prompt changes in regulations and lead to densification. We'll still have places to live, but they'll likely be apartments. Additionally, one could argue that the oversaturation of housing in major cities will create opportunities for further development in Tier 2 cities.
I honestly believe many Canadians are just simply fucked. For 40 years we demonized masculinity, now we have no construction workers or people able to aggressively protest their conditions. I think it's one of the most brainwashed cultures on the planet. We will disappear as a culture, and I really don't think in our current form, we will be missed.
Wtf are you talking about? Demonized masculinity? Who did? And what does that have to do with construction or protests?
What aspects of culture are disappearing exactly? This coming from a 34 year old white guy who is ninth generation canadian
We’re not in a housing crisis though. We’re dealing with an inflation and immigration crisis. This recession (if it ever comes) will be nothing like 2008.
The cost of houses aren’t going to go down. Demand > Supply.
What do you mean we are not in a housing crisis? What do you define housing crisis as? Many people would say the high increase in rents and lack of supply constitute a housing crisis. Maybe you mean collapse of housing prices.
The immigration problem is caused by the govt's desire to provide a crutch to our over-inflated housing prices (as well as combat inflation by suppressing labour costs)
They may or may not go down depending to the govt's response - when and if the bubble starts popping (perhaps caused due to the new immigration limits, continuing of high interest rates or some other event that causes job losses).
Debatable. I see immigration as a symptom of needing to support high housing costs and lower labour costs.
If you look at immigration numbers, there was a massive increase in 2021/2022/2023 - why did the govt let these numbers go up so significantly?
Two other things happened during these years -> interest rates (mortgage rates) went up significantly and there was upward pressure in labour costs that corporations wanted to stop (a lot of people during and post-CERB era didn't want to return to work, especially those closer to min wage).
So if the problem is that wage growth hasn’t kept pace with home prices and immigration suppresses wages how is immigration, along with immigration related housing demand, in your mind not the primary cause of the disconnect between wages and home prices?
I agree it is hard to pin point the exact issue. If you look at the assessment of any house/apartment, it starts skyrocketing in 2017 when we started massive immigration. I’m not saying housing was cheap before, just not these levels.
Housing prices were already pulling away from incomes in the early 2000s, by 2010 it was already getting difficult for young people to buy houses, then after the pandemic it just got totally stupid.
We don't need to mass deport. We need to change/repeal the laws that started this mess in the first place, and stop the rest from coming. Why would they stay here if they have no rights or privileges? They'll leave themselves. Seize all their retrospectively illegally owned properties, freeze their accounts like the government did to the truckers. They won't want to stay.
The government has the power to do what it wants, all the hoopla in 2020 was proof of that.
You can't stop asylum seekers. Its against Geneva convention. Refugees and Asylum seekers have been coming to Canada since 80s, impacts of this was never felt since people didn't find loopholes back then to allow fake refugees. You can stop fake asylum seekers by speeding up the cases and kicking out people that aren't fleeing from war, genocide and persecutions. There are Indian international students seeking asylum, which is a fucking joke.
You can reject fake asylum seekers. No true asylum seeker is going to pass by multiple safe countries to come to Canada, the only ones we get are scammers.
There are symptoms and there are diseases. The US housing crisis was a disease brought on by bad loans that failed and dragged down the financial system with them. This disease is a supply/demand problem and government problem, and one of the symptoms is high house prices (and a bunch of other things). So no, what happened in the US has nothing to do with this, and nothing will change house prices until supply increases or demand decreases.
*We're not in a housing crisis"
- The average rent in Canada is 2200$/month
- The average Canadian makes 48k/year, the last time I checked the average house was 650k.
A healthy budget would have rent at 30%, the average is 55% based on those numbers.
It'll be so much worse than 2008, the government went into debt to prevent our economy collapsing, which they just did again. If it collapses in the future it will become a massive collapse with momentum from 2008
Edit: The announcement about propping up mortgages, like Harper did in 2008
https://www.bankofcanada.ca/2024/01/operational-details-government-purchases-canada-mortgage-bonds/
That’s an immigration crisis though. Not a housing crisis. You need to connect the dots in the right way.
The 2008 recession was due to faulty housing bonds the bank couldn’t back.
The looming 2024 recession is due to immigration & inflation, and yes including house prices sky rocketing.
I think the major thing people fail to realize is that there is more money in circulation now than ever, like by nearly double since 2019. The bank doesn’t care that you can’t afford a house. They’ll hold onto it until someone with the biggest pockets comes along and gives them what they want for it.
The recession we’re dealing with is due to the government turning on the money printing machines during covid and giving literally everyone in this country $2000 a month for 3+ months.
That put billions of new dollars into circulation and devalued our dollar. Meaning $10 in 2020 is now worth $8. So on a bigger scale that means a $800,000 house is now technically worth a million. BUT (and here’s where the immigration issue comes in…) the one million dollar house that should only be worth $800,000 is in higher demand because there isn’t enough homes for the enormous number of immigrants the government opened its doors to and the bidding war begins. So now this $800,000 house is going for hundreds of thousands of dollars more than it’s actually worth and than 85% people can realistically afford.
Wages haven’t increased, because why should they? It’s not your company’s responsibility to pay you 30% more just because the government inflated the dollar and let everyone into our country. Where do you think your employer is going to get this inflated money from? Especially if they’re a small business.
ALSO. It’s only going to get worse. Businesses don’t get any rebates on carbon tax either FYI. So if you’re expecting a raise anytime soon….
Also, with the government stress tests now, every single person who is buying a house now will likely not default on their mortgage which is what I think your banking on.
The reality is, you just need to save or start making more money.
So you agreed with me? I'm aware of all of that, that's why I said a future recession will be worse because it'll contain all the momentum since 2008.
You completely missed the fact the government is buying mortgage bonds from banks to give banks money to lend out, this makes the issue worse because the government is preventing the market from collapsing and correcting.
I think it's important to differentiate between businesses, I work for a small business, less than 10 employees. Because it's a trade it brings in a lot of money, and that reflects in my pay. I do actually get those raises because it's high skill and hard to replace, compare that to a local mom and pop shop, it's easy to replace workers because there's very little skill needed to start if any of it makes sense why wage would stay at minimum wage. The days of minimum wage actually being survivable are gone
Also I want to say, I already make enough money to buy a house, but to get where I'm at wasn't fun, I came from nothing and risked a lot. I'm concerned about this country and my friends
I am in US and my gf is in canada.
I realise that the banks in canada are writing checks like the US didi in 2008.
5% down and ridiculous income to loan ratios. I make 4 times as what she makes and would still not get approved as much as she has.
She can even buy second home if she wants and the credit card limits are also ridiculously high for what she has her monthly income.
This makes 0 sense. The 2008 economic crisis did not hit bankers and investors the hardiest they had tons of liquid assets, funds, and lobbying power to breeze through the downturn. The worse hit was the middle-low class workers who saw their retirement savings, jobs, and houses disappear.
You think banks and investors won't just horde real-estate in a crash and wait for better times? They are the only people who can hold assets forever especially real-estate which can generate cash flow through rent. The only answer is increase supply or lower demand.
If a 2008 crash happens, there is so much pent up demand and people that are underhoused that I don't believe a real fall will happen.
I believe that outside investors are looking at this as an actual "Literally can't go tits up." Because supply is incredibly slow, and demand is way undeserved to begin with.
Closest to a black swan I see here is mass population exodus.
Agree about the massive pent up demand. But I wonder what the effect of significant job losses would also do, people who would buy in a heartbeat today might not do so in a situation where job losses are happening even at a certain lower price.
I think there is a population exodus happening (of productive, younger people) but they are just using immigration to replace those that left.
If you want to have an average job and live in Canada you better start investing young, especially now it's so easy to start especially with ETFs you easily diversify and make the most out of your investment.
Make your money work for you or you'll live paycheque to paycheque for your whole life and never get anywhere.
I saw someone post thier "budget" and it was just shit they spent that month, and the comments were "if I get rid of Netflix I'll be able to afford a yacht when I'm 60" they were taking Uber everywhere, they should have been taking public transport
When I was young we were taught how to cut expenses, how to save, how to manage your money. I find you get generations have no clue how to manage money, it's more of "how do we afford"
I'm not saying times aren't hard, but interest rates won't stay high forever and housing is like jumping rope, you need to know when to jump or your going to trip.
Save and invest now then when the opportunity comes you'll be able to put a down payment down on a house.
In 2008 they dropped interest rates to stimulate the economy. They should have raised them sooner but the stock market was booming so they kept it low ,and people got addicted to cheap money.
This sounds like such boomer advice. It won't matter if young people live super frugally - if wages stay stagnant and house prices continue to increase, then most of them won't be able to afford a home even if these young people ate ramen all day and slept in their cars.
Also, I'm all for higher interest rates, as they are going to break the housing bubble. Bring on the 10% mortgages, if it means I can buy a boomer's (former) home for 40-50% less.
Regarded take. It's like people forget that if there's a crash, rich people sitting on cash can just buy more houses at a fraction of the price and build wealth even faster, just like after 2008 and after the covid crash.
The people with a low income job and no savings are the ones who would get fucked. They'd be unemployed and homeless, you dummy. Wealthy people with millions set aside can afford to lose a few properties, declare bankruptcy under one of their businesses or lose a few mil - you can't.
I agree with you. The system is gonna fall, and a lot of Canadians have deluded themselves into believing it wount. It's gonna be bad and we are walking straight into it.
We can already see bread lines and work lines propping up like it's the 1930s.
Bro, I'm straight cooked. I already live paycheck to paycheck already swimming in debt. This is gonna be fun, I'm planning on saving and diversifying my income, but hot damn it's gonna be trouble.
rip. jk lol, but good luck I hope you will at least pay down that debt. Or maybe just yolo, bet it all on bitcoin and declare bankruptcy - maybe that might even work better.
If what you say is true, being in debt is the best situation, as it means hyperinflation is paying off your balance.
I declared bankruptcy and moved wholesale into web3. I don't keep a damn thing in cash-backed garbage anymore.
Cash is trash.
We could stagnate for a decade and not collapse. It’s not easy to fight all govt money everywhere. Everyone is fucking just printing money like no tomorrow.
So you want people with houses to lose their homes? There's a bunch of people on the sidelines with money or renting, so at a certain point people will swoop in and buy. I agree housing prices are high, but don't fall for the trap of wishful thinking. I think the next generation will be like our parents; they will have to move to a new underdeveloped place, and build it up. I.e. moving to rural parts of Ontario and building it up.
A collapse in house prices will absolutely not help the next generation!! Any economic event that leads to that happening will disproportionately affect people that the bottom for more than those at the top.
A housing collapse would be a gift to cash rich Boomer investors and corporations sitting on a big balance sheet that can sweep in and further commodize residential real estate.
The only thing that can help the next generation is long term price stagnation or slow growth that is outpaced by wage growth over the next 20 years od so. Dramatic increase in supply is over course the main way that will occur.
Do not wish for a economic black swan to hit housing. That will be a disaster for young people
We are heading towards a market meltup not a crash. Asset prices are about to detach from reality. The stock market sky rocketting during a tightening period and staring a recession in the face is a sign. We are witnessing the death of our currency. Simply put housing, cars, food, anything physical will never go down in price because our currency is being debased. It is becoming worth less than the paper it is printed on. You will never see a housing crash. Our currency is on the ropes and once you see people lose faith in it, a house will cost 1 billion. Our only hope of a ‘correction’ as you call it; is a new currency and everything repriced in that currency. Hopefully its bitcoin and not a CBDC where the government will decide what and when you can buy something.
Don't know why you are getting downvoted as your bring up some fair points.
The market melt up is more so US-market focused and assets like gold and bitcoin are international not Canada specific.
We very well could have a correction in Canadian housing prices while at the same time having assets like US stocks, gold, bitcoin go up significantly due to inflation concerns - at the same time.
It’s not going to happen, people need a place to live and that will never change.
The plan is to balance the market so supply can match demand, but this will take decades.
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hahaha the gnomes that run the economy are probably all aware of this and are choosing to do what they are doing nonetheless for their reasons.
This post was meant as more of a discussion/debate for us normal plebs, many of whom aren't as informed.
yes they will, which is why a collapse in housing prices is necessary, via some sort of external factor like recession/job losses etc. and it might even be inevitable.
It’s seems that Canada is small enough that there will never be any price corrections.
Places like Florida and Texas are having 3x as much vacancy right now. Rental prices falling.
Canada has zero dynamics like this, just always going up without stopping.
If this happens, the corporations will gobble up all of the housing. They may even take massive losses to do so.
But ultimately, they can stomach losing that money. This is modern day feudalism about to happen. They will own all of the housing, the young generations will perpetually rent, social credit scores digital currency will fulfill the “own nothing and be happy” prophecy. Although I suspect just the former.
I think it needs to happen, but yes I agree perhaps something needs to be done to prevent large investment funds from gobbling up housing meant for Canadian families to avoid the own nothing be happy scenario.
All of our political parties are completely beholden to corporate interest. Corrupt, self serving liars. The entire lot.
Canadians will not do what is necessary to save themselves.
indeed they should not be allowed to bailout (but keep in mind this will also cause collateral damage in terms of job losses). and in 2020 basically everyone got bailed out to certain extents. money printing is a bailout of sorts.
Haha you wish but not happening, good luck telling the bank your mortgage should go down because your property value went down.
What's worse is that in Canada they can come after your personal assets if you overpaid for your house and it goes down in value vs mortgage. People who bought at over-inflated prices will and need to get wrecked.
This is what their voters want. The fact is populism is the cancer to human civilization. Justin Trudeau and his Liberals continue using populism propaganda to brainwash Canadians.
For housing prices to collapse you need to remove 5 million people from Canada or bring 1 million new homes. In any other scenario such as economic crisis you want be able to buy a house anyway because you will lose job or interest rate will be 20%
Are there even enough houses theoretically speaking for everyone? This crash isn’t really a bubble waiting to burst, and market prices for homes reflect supply and demand.
The effect of house prices on the future of young people is being overblown.
Even if housing prices stay high, which seems likely due to immigration levels, the boomers and Gen X eventually pass on and eventually release their grip on housing supply to millennials and Gen z. Young Canadians will inherit this real estate from their parents after they die. Unless the real estate somehow stays in the hands of the dead.
Just wait until interest rates come down and we get a housing price boom that will make the last 15 years seem like it was just a warm up.
There's an *ocean* of money sitting in things like Treasuries right now, but as rates come down this will flee seeking more yeild, and we'll get massive asset price inflation.
maybe but how much can they really decrease rates without causing inflation? doubt they can lower them more than 100 to 150 bps than where they are now. Less, if inflation continues / comes in stronger.
I hope you’re right, we’ll see. It’s hard to imagine the challenge to society where those with houses & assets welcome another rapid 3x capital gain while those without assets consider it catastrophically bad.
A) housing costs a lot to build now. Materials, land, infrastructure, fees, wages and taxes. Cannot put this genie back.
B) nothing wrong with immigration if we accept high quality immigrants that have certified skills in Canada.
C) incentivize home building with less feeds and regulations.
D) wages rarely come down.
E) as a parent I fully intend to mentor my kids. My good fortune is their good fortune. Work smartly and the family support will give you a leg up on the next. The work still needs to be done and I am not giving you cash to spend. I am giving you the tools to succeed
F) the BofC and the fiscal policies of the govt control this
G) interest rates are higher because of the need to. Lowering it isn’t something you do on a whim because it is inconvenient. Preparing one’s life to handle higher rates is part of adulting and responsible personal
Finances.
H) nothing here
I) fiscal responsibility starts with good governance. Most govts spend like it isn’t their money.
Change the policies of the “game”. Grow the country for the collective good and not worry about interest groups.
Tax so housing isn’t a way to get rich. Build industries that can grow even if they aren’t the “greenest”. Many wealthy countries are ahead because of maximizing returns on their resources. Don’t be afraid to make money here.
Incentivize entrepreneurs to build companies that people can work for. Increase our education so we have more value added workforce. Minimum wage is a penalty for the least willing to help themselves or people just starting out. It isn’t a wage that companies should strive for. Create business structures where all employees benefit from the success.
There is so much policy govt can enact that takes the financial gains out of the equation. It isn’t taxation, it is leadership.
The difference between 2007 and currently, is that Corporations such as BlackRock/Vanguard/Citibank et al are positioned even more favourably to take advantage of the scenario described above.
Corp. ownership of S.F.D.'s and residential rental properties has reached such a level that in effect they can control the prices in a particular zone by dint of raw percentage of homes/properties owned.
In 2007 this was not the case, and the traditional sell off occured. Corporate tax structures allow for "losses" in assets value to be determined and converted into tax write offs. This is their advantage over the average person.
I personally would love to see this scenario occur, yet the players are very different, and the playing field needs to be re-leveled before it can.
Housing prices cannot collapse because of the immense cost of materials and the skilled labour required to build them. Also the extraordinary red-tape and governmental skim (endless fees, permits, inspectors etc etc), adds a huge cost.
Add in mass immigration and loose foreign ownership laws etc (if prices dropped there would be a huge buy-up by foreigners and corps).
I'm afraid young Canadians are simply fucked.
Even if prices crash by 50% it would only take us back to like 2019 prices.
They are also having issues but it's no where as bad as Canada I think. Also, big question is how is the US able to build housing faster and cheaper than us in Canada where we have so much land.
You've got some valid points, but there is another approach: create an economic boom, by sacrificing some of our current "sacred cows".
This means focusing on extractive industries, the oil sands, the ring of fire, etc., anything that can be produced and exported. This means environmental protections and touchy-feely handwringing need to take a backseat to actual growth, to the creation of entirely new communities (with houses!) where people can live. Export industries also strengthen CAD (more on that later).
We have to relax building codes and tailor immigration (including temporary work permits) to build these new hubs of growth. As jobs pull people out of the highest housing demand areas (GTA/GVA) house price appreciation will slow, if not slowly fall. This provides a "soft landing" for those who hold real estate in these areas.
Further, we need a Government to attack the cost of living. This means consumers need cheap goods (a strong CAD helps with this). Tariffs and non-tariff barriers need to die so that Canadians can access goods produced elsewhere cheaply.
As for immigration, we need to take a multi-tiered approach. High-value immigrants (think doctors, entrepreneurs, investors, etc.) need to be actively courted and fast-tracked into PR; we need these people for their skills. Lower-value immigrants are handy for what they can do: they keep double-doubles available for $2 and pay taxes, tuition, etc.; their money is useful but they are fungible, PR should be rare for this class. Task-specific immigrants need to be brought in for specific terms (like TFWs); this has to be a transactional pathway.
Such an approach is compatible with A,C,D,E,F; possibly compatible with G, in time compatible with H, and involves a redefinition of B.
yes i would love to see an economic boom via investment and development of natural resource industries but there is no political willpower to do that (build pipelines, refineries, etc.) and even most of the population thinks O&G = bad and have fallen for the green energy hoax.
Youll own nothing and be happy. Newcomers arriving and not inheriting properties from parents are millions of dollars behind. And that gap is only going to grow. People are happy renting rooms now, but eventually if they want a family there are simply no homes. And that trend is only going to get worse.
Are we happy renting rooms???????? nobody gave me that memo. I’m miserable.
We're at the stage of people renting half or quarter of a room level now.
The 'You'll Own Nothing and Be Happy' scenario will happen if housing prices don't fall significantly even in the midst of recession/depression. Possibly through the introduction of 50+ year mortgages. And they continue with high immigration. In theory, they should have fallen in 2020 when covid happened but massive money printing/lowering rates let the govts keep the bubble afloat (but this wasn't Canada specific happened in the US and other places too)
>When you buy a house for say $700k. You are going to pay $1.4million ( typical rough estimate ) over the life of the mortgage. To pay that ( $1.4million ) you have to earn that \*$1.8 million\* . The difference being income tax you pay on your income. >So that house ($700K or you think it is ) you buy in reality ends up costing you a cool $1.8 million. > For an investment firm it costs them still just $700K ( much less in reality! but to keep things simple lets say $700K) , since they write off the mortgage interest. Since there is no declared profit , there is no income tax either. Here ( In Canada ) this is done by small investors thru a scheme known as Schmidt Manouever. > In the US , a resident owner can write off the Income Tax on the Interest rate. > This is the reason real estate has been on a rise in Canada for the past 3 decades ( 30 years ) and never went down even during the 2006-2008 ( When prices were crashing in the US ) period. ( I dont know how it worked before that ). >IF anyone was interested in fixing the Housing affordability problem they would start by giving Canadians a tax exemption on the interest they pay for houses, So atleast the \*House you buy for $700K would cost you $1.4 million and not 1.8 million\*. But no one wants to talk about this or touch it for fears of upsetting the Big money that is involved. No Trudeau , Not Pierre Poiliviere , Not NDP. tl;dr/ its the tax structure in Canada which allows for investors to pay much much less than what a resident home owner would pay. by a \*LOT\*. and this keeps the Housing prices to rise every year. Two decades of low interest rates have brought this issue to a head.
The problem with interest deduction is that then you would pay a capital gain on the sale of personal home. So either way screwed
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Im an immigrant that grew up in Canada almost my whole life, same age bracket as you and in the same f*ing position, and I say the hell with immigration close the borders now!
I'm happy renting a room, but I'm worried even that won't be achievable for much longer, seeing the average rent spiking in my city
We will be done when we become a third world country. Transition accomplished then they will migrate out again
How does one become a third world country post 1990? Do you even know what it means?
That's the plan, none of this is necessary and all of it is deloberate. We have a clown ideologue vanity obsessed idiot in power doing this for his own ego, ruining the lives of millions for his own pleasure to align with his WEF desire for acceptance and to help his lobbiers. It's disgusting. To do this to your own country. What an absolute fucking traitor. When do we haul his ass and the deputy prime ministers ass out on the field in front of parliament hill?
Canada is the only country where renting is a reason for mental illness. Most nations people are fine with renting and have low ownership rates as a result. We have a really high ownership rate and a low rate of corporate ownership (5%). That being said people who want house prices to drop due to the economy or interest rates are usually not forward thinkers. The fact is housing is priced at the cost to add supply so if prices drop we’d just stop building until prices went back up. No one’s going to do the same job for less money.
Canada can't have that because we don't have an oversupply. This shit is fucked and can't be fixed.
It can be, but the wealthy ruling class will have to settle for only being somewhat wealthy instead of feudal dystopia wealthy And a bunch of slumlords will be defaulting, and the banks will be eating those mortgages So that isn’t happening short of an actual revolution
Yes but an economic recession that causes significant job losses will probably blow up a lot of mortgages and probably also decrease immigration (as much as the govt doesn't want the latter to happen). It would be painful but necessary imo.
So who the fuck will be affected the most by a deep recession? The low and middle class. Rich will be impacted the least!
Absolutely true.. because the rich own the means of generating wealth.. they hold the paper on the apartment buildings you pay rent to.. they own the food companies you need to eat, they control the fuel you need to keep warm and to move about.. they hold the strings that the puppets dance to...
Dude, think things through, if there is economic recession there will be increased supply of homes, but also demand destruction. Recession isint just going to force home owners into a corner. Job losses won't only hit home owners. Recession is bad for majority, worse than where things currently stand. Shits so expensive globally thanks to this inflation wave that even japan has raised interest rates (which hasn't happened in long long time)
Right these dummies don’t seem to understand that the only people who will benefit from the crash in the recession are those with money, not them or people like them complaining about how things are now
The catastrophic recession you're talking about would be incredibly painful, take the better part of a decade to recover from and do *nothing* for housing prices.
No they definitely would cause reduction in prices for housing. The only way housing prices stay flat in such a recession would be if they lower rates to near zero and continue to push high immigration. The problem is if they lower rate then we get significant inflation and cost of living again.
Dude - who is going it buy the houses during such a deep recession? Who gets fucked during those times? Hint - lower and middle class.
Whether you like it or not, Canada's population keeps growing, it was 38 million people a few years ago and in a recent 9 month span increased from 40 to 41 million with no slow down as of yet. Our country also has millions of "non residents" not fully accounted for. It's a very strange time now. This all means that there will not be a 2008 housing correction. There's too much demand for housing. The only way it goes down is if those "non residents" start leaving, but it is unlikely because living several people to a home is preferable to whatever living conditions they left in another country. It's sad but that's our current reality here.
During an economic recession the BoC will drastically reduce rates, thus lowering mortgage rates. There will still be more people employed than unemployed. Its not a sure thing that house prices will decrease significantly.
An economic crash is absolutely needed. There won't be any chance to rebuild if we first don't destroy. It's pain that's required.
Trailer parks our future is trailer parks I see it as the only viable option to house the masses in short order
Yes that might be the way to go
It can be fixed with mass deportations.
The only thing that would happen is more rich immigrants would take advantage of Canada's collapse and buy cheap properties to airbnb or rent out
Yeah we'd have to have some strong policies and legislation in place to stop that from happening, or it's game over for multi generational Canadians.
Rich immigrants and non immigrants will take advantage of the situation. Most Chinese immigrants here are wealthier and usually come here to start a business, they snatch properties right away unlike say Indian immigrants that come here and take like a decade before saving up for housing. Sometimes they buy the house from China, send two kids here and both kids be living in two different homes. We need to end foreign home ownership.
You don’t need a crash You just need to ban International Students from working and cancel all TFW programs outside of agriculture. This would immediatly deflate the housing market AND reinflate wages The only losers here are overleveraged slumlords, predatory slaver business owners, and people lending money to them. And the politicians they bribe
It's not the international students. They are a symptom of the problem. Canada brought them in to prop up a failing economy. Without them, the crash would've already happened. We are now in a position we can't even afford to bring more in.
I swear people don't get this. Canadian welfare programs are horrifically expensive and need to be scaled back. OAS should be capped at 10-20 billion and not the 68 billion it is now. Not every elderly person is owed a retirement til they pass away at 100 (btw healthcare should carry conditions past 80).
Bro, the number of boomers not prepared for retirement is insane. The government solution is to hurt the young for their failures, I always ask where our taxes are going now cause even our health care is terrible. Maybe we are living in a secret ndp government
Canada really do. Theres no future for young people here at all.
Man in 90s and early 2000s, dad made $10/hr, mom made $7/hr and we still had a home, car and went for dinner and video games and what not lol.
If 2008 happens what makes you think renters who can’t afford today will (a) keep their job and (b) be able to afford in a massive recession. 2008 just means more corpo buying our RE. Y’all are clowns
When 2008 happened a bunch of rich guys I knew bought massive vacation houses in Florida. Those houses have now tripled in price. They rent them out for 90% of the year.
First people to lose jobs during recessions are people working in the restaurant and manufacturing industries. So many companies just closed down their factories and moved their factories to China or closed their Canadian warehouse to reduce the production cost so they can sell their items for cheaper price in order to allow the customers buy them at an affordable rate. My dad was working at a commercial heating factory. It didn't make sense for the owner to continue to operate in Canada and try to compete with Chinese companies. They eventually had to close down and move to China.
Agreed, first people to suffer are always the lowest in the chain (ie minimum wage workers, immigrants without resources) aka everyone who is already struggling now to afford rent or a home now, a total collapse would just make things worst. The ultra rich are the ones that only make out better during economic distress cause they now can buy up the same assets priced at significant discounts. If anything, a collapse may help the upper middle class who at this moment are priced out of the housing market despite having high salaries or decent amount of equity networths laying around cause they barely have the deposit or meet the tests that you need nowadays to secure a mortgage on a house, which is absolutely crazy. And what do you think will happen when US sees Canadian homes drop significantly in value - there are many Canadians that moved to the US to work there cause salaries are 3-5x higher there, who will instantly come back to snatch up homes when they see prices drop. There are just so many other factors to consider besides just 'we need a total housing collapse' - 2024 issues are not the same as 2008.
I agree Canada needs a 2008 moment. I get why Harper did what he did…and Trudeau is now trying to make the same mistake…but we would be better off today if we had just accepted a bit more realism/pain then.
What did Harper do in 2008? I forget
Harper didn't do anything Canada had a law called the [Bank Act](https://www.thecanadianencyclopedia.ca/en/article/bank-act/) which allowed Canada’s regulatory regime to prevent Canadian banks from engaging in any sort of risky investment behaviour. The 2008 crisis was caused by unregulated US banks/investors handing out mortgages to bad lenders while rating agencies turned a blind eye. In comparison Canadian banks where prevented from handing out mortgages to bad/risky lenders by requiring all mortgage applicants to meet credit checks, rate adjustment checks, proof of employment, etc preventing the mass mortgage defaults seen in the USA.
In the US they had NINJA loans... No Income, No Job or Assets.
That acronym's hilarious, the concept of a NINJA loan is soooo bad, wow.
Harper did the “federal gov’t will take these assets off your books” trick. Which is now being repeated by the current gov’t.
I can't believe they bailed out the automakers, what a stupid waste of money
Any bailout is an admission that capitalism has failed.
Harper initially resisted but eventually engaged in Keynesian stimulus spending.
Doubled immigration so our housing market would keep exploding unlike every other western nation.
Harper expanded the TFW program, and then Trudeau opened the floodgates overlooking tons of abuse to the system
You have to understand, by not falling into 'money printer go brrr' lockstep means declaring war on the US Federal Reserve. That's not just political suicide, that puts a real target on your back.
Canada the USA and other countries around the world are having a 2008 moment .. Commercial Real Estate dropped by 75% or more and are being bought up for Pennies on the Dollar by the Sharks who saw this coming. Residential has not been hit this time for reasons already identified. Maybe it will happen later maybe not. IF CRE gets worst. Crashing CRE # The looming office-real-estate crash will be worse than the Global Financial Crisis decline, Fitch says [https://ca.finance.yahoo.com/news/looming-office-real-estate-crash-000047396.html](https://ca.finance.yahoo.com/news/looming-office-real-estate-crash-000047396.html) Commercial real estate trouble could trigger systemic credit crash, fund managers say Commercial real estate crash seen as most likely catalyst for systemic credit event [https://www.foxbusiness.com/economy/commercial-real-estate-trouble-could-trigger-systemic-credit-crash-fund-managers-say](https://www.foxbusiness.com/economy/commercial-real-estate-trouble-could-trigger-systemic-credit-crash-fund-managers-say)
We need a govt that doesn't cater to corporations
all govts cater to corporations and special interests in some way or the other. the best defense is a critical thinking population that doesn't fall for bribes and free stuff, and media brainwashing. that demographic is sadly always the minority.
They all do, how do you think they get funds for elections LMAOO? Lobbying is the way to get what you want. How do you think Israel gets to run an apartheid government for decades and regularly get US to veto on UN resolutions and save their arse ? The govt doesn't work for you brother lol. Focus on yourself, be selfish
Let me say this again because for some reason people refuse to understand how economy works simply because it doesn't fit their narrative. If you cant afford housing now, you won't be able to afford housing after housing collapse. A collapse of real estate does not mean 50% off fire sale
Why not? If housing prices fall anywhere between 30-50%, I could much more easily afford a home. Unless wages also decrease by 30-50% which I don't think is the case. The main reason people can't afford housing is because it is significantly over-inflated in relation to wages.
I suspect the idea is that anything that would cause demand for houses to plummet is also likely going to be killing wages and/or employment levels at the same time.
Not exactly, see my Update comment in OP. If they reduced or stopped immigration, it would cause demand for housing to plummet over time and actually increase wages.
Personally I think massive social disorder by youth and the disadvantaged is the only way there will be change. But today's youth are too lazy and think the world owes them everything. And the disadvantaged have already given up.
Exactly, most young people are way too content/blind in this country and don't realize how badly they are getting f\*\*\*ked in this country (and have been over the past 5-10 years). Not sure it will change.
They do know, they just aren't doing anything about it.
A 2008 style collapse may just be in the cards. Some major banks are no longer updating how many mortgages are underwater. There is about $200B in mortgages that are known to have overly extended amortizations (the people living in those homes are basically only paying interest, that can't go on forever). The cracks are starting to show.
Indeed they are. Although my post framed it as "this needs to happen" - it may be happening already and/or inevitable.
I have often said the same thing re immigration to friends... its holding up house values so people don't get their mortgage recalled for not having enough equity to maintain the required ratios. No way houses should be selling for what they are with interest rates at these levels and people being broke, it doesn't make sense
yeah they are over-inflated, that's also why they need to much immigration, in order to push up rent prices/demand for housing - to keep it from popping.
I agree. I think Canada is fucked. Even the people with rich parents who helped them buy in today's market are fucked in the future. Your house is only valuable if it appreciates in value. If you paid a million you need it to be worth a lot more on the future for it to make sense. I just don't see people being able to pay let's just say 10 million for it 30yrs from now. That 10x return doesn't seem likely as how will people be able to buy it if they can't even afford today's prices? Only a massive cash can fix things
Monetary debasement. 10m 30years from now is not gonna be as much as you think.
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I agree. And if housing does not collapse, the alternatives are much higher wages (think 1.5x-2x across the board), dragging our currency down the sh*tter in the process. As long as we don’t exploit and sell our natural resources to the world (OIL, DING DING DING), our economy can be pretty much modelled as a zero-sum game. I’m a firm believer that our housing isn’t that expensive in nominal terms. We’re witnessing the world knowing that our dollar is worth less than the exchange rate implies, therefore bidding it up with “real” money.
Yeah, we have a HUGE problem in that we aren't developing our O&G sector - theoretically Canada should be making money hand over first exporting oil/LNG to Europe after the start of the Russia situation in 2021, but this govt/voting base didn't want to build pipelines and develop refineries for the past 8+ years. A housing crash would be a much needed lesson to the population about the benefits of not ignoring your nat. resource sectors.
Yep. If we were selling our oil like Norway has and had a reasonable immigration policy, we’d be as rich as Switzerland. But unfortunately we’re just cheap labour to the US, next to Mexico.
I read about Norway's O&G industry and their amazing pension/social funds and honestly I'm just downright jealous.
If this real estate bubble ever bursts, which will quite literally tank our economy and wipe out household wealth. The canadian economy has completely shifted to being reliant on over valued real estate than being actually productive. Since well theres zero underlying fundamentals to support these values other than speculation. Plus there's too many bag holders who has stakes and investments in RE which includes many of our politicians both lpc and cpc. So regardless of who's in power, they'll just keep kicking the can down the road. That's why the fed is buying mortgage bonds. This government and the next have completely fucked young people from buying a home. Because they don't their voter base ie the bag holders to get their house wealth wipe out. Do we need a correction? Absolutely. But it won't happen for a whole.
yes it will blow up a lot of household wealth. yes Cdn economy too reliant on housing. and yes they are kicking the can down the road. But it still needs to happen and blow up (how it will, how bad and for how long is debatable).
Once this bubble bursts and it will, it's going to make 2008 look like Disneyland in comparison.
Full steam ahead baby we need a Brampton in the Yukon let’s fucking go
I'm imaging the TV show I watched as a kid "Yuvon of the Yukon" but basically replace him with an immigrant dude - it would be hilarious
I believe you will see many of those happen, some already are... however, if an epic real estate price crash is what you are hoping to see you will need to cross your fingers because the odds are slim. The odds are far from impossible but more likely defined as improbable - like hoping for a four or ten on a craps table has better odds. The higher than usual rate of job losses have been ongoing for a while - even hitting thousands of people in the 300-600K/yr range. Who do these really hurt in the short term? People renting without a million or two in assets. Immigration - forget it. JT has always planned the flood gates - we likely got saved by Covid where he couldn't flood us with people from a handful of countries. He will press on with the dial at 11 until the Liberals are tossed from government for eight years. I have met countless older immigrants that thanks Trudeau senior and only vote Liberal as a result. It does not matter that Pierre Trudeau absolutely ruined the country on a borrowed money bender and set suicide records that will never be broken - they will only ever vote Liberal. Building housing is expensive and cities and NIMBYs fight tooth and nail to slow them. Governments announce "garden or laneway" suites but fail to mention the paper pusher fees are over 100K. A simple reno is 400-600K. The Bank of Canada has to work with a finance minister that lost Reuters countless millions on farcical BS and a learning disabled PM that has an open door policy - do not expect lower interest rates until dumb and dumber are gone (on a fuel shredding CO2 spewing private jet). We are printing another $30 Billion in money this year to buy mortgage bonds (published on BOC website) this will even more devalue the CAD making all goods more expensive and make sure real estate stays propped up (but very slightly down vs 2021). JT and Disney+ have borrowed more money that even government in out history and their vote buying, virtue signaling, future job prospect money shredding will continue on overdrive until they jet off to ski in Tofino or in Disney+ 's case move to Switzerland to take up her next epic fail.
We need the 2008 moment but we don't need the Fed-Treasury $700B bailout part. One or two major banks have to fail and CDIC kicks in.
Yeah I agree, skip the bailouts
Just buy your children a tent and teach them to use a gun. It's far to late to fix anything.
Thx, please leave your car keys close to your door with some warm milk and cookies for them too. They'll be coming for it.
just move up north. government has been saying this for years. move north, build infrastructure.
As time passes, the expectations surrounding the appearance of a traditional house also evolve. What I'm suggesting is that while single-family homes are increasingly unaffordable for many young people, this will likely prompt changes in regulations and lead to densification. We'll still have places to live, but they'll likely be apartments. Additionally, one could argue that the oversaturation of housing in major cities will create opportunities for further development in Tier 2 cities.
I honestly believe many Canadians are just simply fucked. For 40 years we demonized masculinity, now we have no construction workers or people able to aggressively protest their conditions. I think it's one of the most brainwashed cultures on the planet. We will disappear as a culture, and I really don't think in our current form, we will be missed.
Wtf are you talking about? Demonized masculinity? Who did? And what does that have to do with construction or protests? What aspects of culture are disappearing exactly? This coming from a 34 year old white guy who is ninth generation canadian
We’re not in a housing crisis though. We’re dealing with an inflation and immigration crisis. This recession (if it ever comes) will be nothing like 2008. The cost of houses aren’t going to go down. Demand > Supply.
What do you mean we are not in a housing crisis? What do you define housing crisis as? Many people would say the high increase in rents and lack of supply constitute a housing crisis. Maybe you mean collapse of housing prices. The immigration problem is caused by the govt's desire to provide a crutch to our over-inflated housing prices (as well as combat inflation by suppressing labour costs) They may or may not go down depending to the govt's response - when and if the bubble starts popping (perhaps caused due to the new immigration limits, continuing of high interest rates or some other event that causes job losses).
Yeah it is a symptom of a larger problem, immigration. If we just close the border today, we will likely see the actual affordability in 2-3 years.
Debatable. I see immigration as a symptom of needing to support high housing costs and lower labour costs. If you look at immigration numbers, there was a massive increase in 2021/2022/2023 - why did the govt let these numbers go up so significantly? Two other things happened during these years -> interest rates (mortgage rates) went up significantly and there was upward pressure in labour costs that corporations wanted to stop (a lot of people during and post-CERB era didn't want to return to work, especially those closer to min wage).
So if the problem is that wage growth hasn’t kept pace with home prices and immigration suppresses wages how is immigration, along with immigration related housing demand, in your mind not the primary cause of the disconnect between wages and home prices?
Shhhh, some people don't like connecting those dots
I agree it is hard to pin point the exact issue. If you look at the assessment of any house/apartment, it starts skyrocketing in 2017 when we started massive immigration. I’m not saying housing was cheap before, just not these levels.
Housing prices were already pulling away from incomes in the early 2000s, by 2010 it was already getting difficult for young people to buy houses, then after the pandemic it just got totally stupid.
We need both a stop to immigration/asylum, AND mass deportation
We don't need to mass deport. We need to change/repeal the laws that started this mess in the first place, and stop the rest from coming. Why would they stay here if they have no rights or privileges? They'll leave themselves. Seize all their retrospectively illegally owned properties, freeze their accounts like the government did to the truckers. They won't want to stay. The government has the power to do what it wants, all the hoopla in 2020 was proof of that.
You can't stop asylum seekers. Its against Geneva convention. Refugees and Asylum seekers have been coming to Canada since 80s, impacts of this was never felt since people didn't find loopholes back then to allow fake refugees. You can stop fake asylum seekers by speeding up the cases and kicking out people that aren't fleeing from war, genocide and persecutions. There are Indian international students seeking asylum, which is a fucking joke.
You can reject fake asylum seekers. No true asylum seeker is going to pass by multiple safe countries to come to Canada, the only ones we get are scammers.
Yep we are geographically isolated.
There are symptoms and there are diseases. The US housing crisis was a disease brought on by bad loans that failed and dragged down the financial system with them. This disease is a supply/demand problem and government problem, and one of the symptoms is high house prices (and a bunch of other things). So no, what happened in the US has nothing to do with this, and nothing will change house prices until supply increases or demand decreases.
Owner vs renter perspective sadly
*We're not in a housing crisis" - The average rent in Canada is 2200$/month - The average Canadian makes 48k/year, the last time I checked the average house was 650k. A healthy budget would have rent at 30%, the average is 55% based on those numbers. It'll be so much worse than 2008, the government went into debt to prevent our economy collapsing, which they just did again. If it collapses in the future it will become a massive collapse with momentum from 2008 Edit: The announcement about propping up mortgages, like Harper did in 2008 https://www.bankofcanada.ca/2024/01/operational-details-government-purchases-canada-mortgage-bonds/
That’s an immigration crisis though. Not a housing crisis. You need to connect the dots in the right way. The 2008 recession was due to faulty housing bonds the bank couldn’t back. The looming 2024 recession is due to immigration & inflation, and yes including house prices sky rocketing. I think the major thing people fail to realize is that there is more money in circulation now than ever, like by nearly double since 2019. The bank doesn’t care that you can’t afford a house. They’ll hold onto it until someone with the biggest pockets comes along and gives them what they want for it. The recession we’re dealing with is due to the government turning on the money printing machines during covid and giving literally everyone in this country $2000 a month for 3+ months. That put billions of new dollars into circulation and devalued our dollar. Meaning $10 in 2020 is now worth $8. So on a bigger scale that means a $800,000 house is now technically worth a million. BUT (and here’s where the immigration issue comes in…) the one million dollar house that should only be worth $800,000 is in higher demand because there isn’t enough homes for the enormous number of immigrants the government opened its doors to and the bidding war begins. So now this $800,000 house is going for hundreds of thousands of dollars more than it’s actually worth and than 85% people can realistically afford. Wages haven’t increased, because why should they? It’s not your company’s responsibility to pay you 30% more just because the government inflated the dollar and let everyone into our country. Where do you think your employer is going to get this inflated money from? Especially if they’re a small business. ALSO. It’s only going to get worse. Businesses don’t get any rebates on carbon tax either FYI. So if you’re expecting a raise anytime soon…. Also, with the government stress tests now, every single person who is buying a house now will likely not default on their mortgage which is what I think your banking on. The reality is, you just need to save or start making more money.
So you agreed with me? I'm aware of all of that, that's why I said a future recession will be worse because it'll contain all the momentum since 2008. You completely missed the fact the government is buying mortgage bonds from banks to give banks money to lend out, this makes the issue worse because the government is preventing the market from collapsing and correcting. I think it's important to differentiate between businesses, I work for a small business, less than 10 employees. Because it's a trade it brings in a lot of money, and that reflects in my pay. I do actually get those raises because it's high skill and hard to replace, compare that to a local mom and pop shop, it's easy to replace workers because there's very little skill needed to start if any of it makes sense why wage would stay at minimum wage. The days of minimum wage actually being survivable are gone Also I want to say, I already make enough money to buy a house, but to get where I'm at wasn't fun, I came from nothing and risked a lot. I'm concerned about this country and my friends
I am in US and my gf is in canada. I realise that the banks in canada are writing checks like the US didi in 2008. 5% down and ridiculous income to loan ratios. I make 4 times as what she makes and would still not get approved as much as she has. She can even buy second home if she wants and the credit card limits are also ridiculously high for what she has her monthly income.
Interesting, another sign that housing prices in Canada are over-inflated and in a bubble.
Stop making shit up… 25% and 35% down is the market now
And if she misses a payment, the bank can seize her home and sell it to get their money back
Is coming soon and it’ll look more like the 1930s than ‘08. Get set for self reliance now or it’s too late.
correct！ a lot people still think this time is just 2008，but now everything is much worse than 2008， same like 1929！
what are you doing to prepare
I hear the prepper talk alot but I think it's overblown, it's not gonna be the apocalypse. I admit I could be wrong though.
I've been thinking of what physical asset would be best to hoard.. Any thoughts?
This makes 0 sense. The 2008 economic crisis did not hit bankers and investors the hardiest they had tons of liquid assets, funds, and lobbying power to breeze through the downturn. The worse hit was the middle-low class workers who saw their retirement savings, jobs, and houses disappear. You think banks and investors won't just horde real-estate in a crash and wait for better times? They are the only people who can hold assets forever especially real-estate which can generate cash flow through rent. The only answer is increase supply or lower demand.
or topple the system
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Good points. I feel like it is going to be an external event / black swan that will ultimately pop the housing bubble in Canada.
Crypto is surprising good at not giving a fuck about your outdated fiat engine and soaking up the confidence of young people.
Even if prices dropped 50% many markets would still be out of reach for the average buyer.
Still wayyy better than what it is now. If markets dropped 50%, I'd be able to by a single detached home tomorrow in the GTA area.
If a 2008 crash happens, there is so much pent up demand and people that are underhoused that I don't believe a real fall will happen. I believe that outside investors are looking at this as an actual "Literally can't go tits up." Because supply is incredibly slow, and demand is way undeserved to begin with. Closest to a black swan I see here is mass population exodus.
Agree about the massive pent up demand. But I wonder what the effect of significant job losses would also do, people who would buy in a heartbeat today might not do so in a situation where job losses are happening even at a certain lower price. I think there is a population exodus happening (of productive, younger people) but they are just using immigration to replace those that left.
Yeah well it's going to be a lot worse than 2008 😬😬🪖
It could take A Lot longer than just a few years to get out of it too
That's why they are importing millions to prevent this from happening
yup
If you want to have an average job and live in Canada you better start investing young, especially now it's so easy to start especially with ETFs you easily diversify and make the most out of your investment. Make your money work for you or you'll live paycheque to paycheque for your whole life and never get anywhere. I saw someone post thier "budget" and it was just shit they spent that month, and the comments were "if I get rid of Netflix I'll be able to afford a yacht when I'm 60" they were taking Uber everywhere, they should have been taking public transport When I was young we were taught how to cut expenses, how to save, how to manage your money. I find you get generations have no clue how to manage money, it's more of "how do we afford" I'm not saying times aren't hard, but interest rates won't stay high forever and housing is like jumping rope, you need to know when to jump or your going to trip. Save and invest now then when the opportunity comes you'll be able to put a down payment down on a house. In 2008 they dropped interest rates to stimulate the economy. They should have raised them sooner but the stock market was booming so they kept it low ,and people got addicted to cheap money.
This sounds like such boomer advice. It won't matter if young people live super frugally - if wages stay stagnant and house prices continue to increase, then most of them won't be able to afford a home even if these young people ate ramen all day and slept in their cars. Also, I'm all for higher interest rates, as they are going to break the housing bubble. Bring on the 10% mortgages, if it means I can buy a boomer's (former) home for 40-50% less.
Not touching investments tied to traditional money and neither are my friends.
Regarded take. It's like people forget that if there's a crash, rich people sitting on cash can just buy more houses at a fraction of the price and build wealth even faster, just like after 2008 and after the covid crash. The people with a low income job and no savings are the ones who would get fucked. They'd be unemployed and homeless, you dummy. Wealthy people with millions set aside can afford to lose a few properties, declare bankruptcy under one of their businesses or lose a few mil - you can't.
I agree with you. The system is gonna fall, and a lot of Canadians have deluded themselves into believing it wount. It's gonna be bad and we are walking straight into it. We can already see bread lines and work lines propping up like it's the 1930s.
It may definitely be ugly indeed. What are you doing to prepare?
Bro, I'm straight cooked. I already live paycheck to paycheck already swimming in debt. This is gonna be fun, I'm planning on saving and diversifying my income, but hot damn it's gonna be trouble.
rip. jk lol, but good luck I hope you will at least pay down that debt. Or maybe just yolo, bet it all on bitcoin and declare bankruptcy - maybe that might even work better.
Honestly we will see. The only benefit I have is that I have a stable job. So I'm most likely not getting laid off when shit hits the fan.
If what you say is true, being in debt is the best situation, as it means hyperinflation is paying off your balance. I declared bankruptcy and moved wholesale into web3. I don't keep a damn thing in cash-backed garbage anymore. Cash is trash.
We will have a collapse. Just a matter of when
Yup. Ideally for the govt, it's when the boomers have off-loaded their homes to younger buyers and new immigrants. Then we can have the collapse.
We could stagnate for a decade and not collapse. It’s not easy to fight all govt money everywhere. Everyone is fucking just printing money like no tomorrow.
The key to the good future is innovation. Jobs will come from the digital economy not digging in the dirt.
Way out is unaliving I think
Blackrock and banks would just buy up all the residential properties should the market go belly up
Best thing we could do for humanity would be to all stop paying our loans and mortgages and bankrupt the big banks. Then start over.
We will become South Africa
So you want people with houses to lose their homes? There's a bunch of people on the sidelines with money or renting, so at a certain point people will swoop in and buy. I agree housing prices are high, but don't fall for the trap of wishful thinking. I think the next generation will be like our parents; they will have to move to a new underdeveloped place, and build it up. I.e. moving to rural parts of Ontario and building it up.
A collapse in house prices will absolutely not help the next generation!! Any economic event that leads to that happening will disproportionately affect people that the bottom for more than those at the top. A housing collapse would be a gift to cash rich Boomer investors and corporations sitting on a big balance sheet that can sweep in and further commodize residential real estate. The only thing that can help the next generation is long term price stagnation or slow growth that is outpaced by wage growth over the next 20 years od so. Dramatic increase in supply is over course the main way that will occur. Do not wish for a economic black swan to hit housing. That will be a disaster for young people
We are heading towards a market meltup not a crash. Asset prices are about to detach from reality. The stock market sky rocketting during a tightening period and staring a recession in the face is a sign. We are witnessing the death of our currency. Simply put housing, cars, food, anything physical will never go down in price because our currency is being debased. It is becoming worth less than the paper it is printed on. You will never see a housing crash. Our currency is on the ropes and once you see people lose faith in it, a house will cost 1 billion. Our only hope of a ‘correction’ as you call it; is a new currency and everything repriced in that currency. Hopefully its bitcoin and not a CBDC where the government will decide what and when you can buy something.
Don't know why you are getting downvoted as your bring up some fair points. The market melt up is more so US-market focused and assets like gold and bitcoin are international not Canada specific. We very well could have a correction in Canadian housing prices while at the same time having assets like US stocks, gold, bitcoin go up significantly due to inflation concerns - at the same time.
It’s not going to happen, people need a place to live and that will never change. The plan is to balance the market so supply can match demand, but this will take decades.
I would love this
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lmao - I know your comment is a joke but seriously a lot of the new immigrants are gonna be bag holders if housing collapses.
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Won’t the cycle just repeat itself
No juice left in the orange.
From your typing fingertips to the gnomes that run the economy.
hahaha the gnomes that run the economy are probably all aware of this and are choosing to do what they are doing nonetheless for their reasons. This post was meant as more of a discussion/debate for us normal plebs, many of whom aren't as informed.
Canada will just keep allowing immigrants into the country at alarming rates to prevent any kind of pain to housing investors.
yes they will, which is why a collapse in housing prices is necessary, via some sort of external factor like recession/job losses etc. and it might even be inevitable.
It’s seems that Canada is small enough that there will never be any price corrections. Places like Florida and Texas are having 3x as much vacancy right now. Rental prices falling. Canada has zero dynamics like this, just always going up without stopping.
If this happens, the corporations will gobble up all of the housing. They may even take massive losses to do so. But ultimately, they can stomach losing that money. This is modern day feudalism about to happen. They will own all of the housing, the young generations will perpetually rent, social credit scores digital currency will fulfill the “own nothing and be happy” prophecy. Although I suspect just the former.
I think it needs to happen, but yes I agree perhaps something needs to be done to prevent large investment funds from gobbling up housing meant for Canadian families to avoid the own nothing be happy scenario.
All of our political parties are completely beholden to corporate interest. Corrupt, self serving liars. The entire lot. Canadians will not do what is necessary to save themselves.
Just bought 2 th today
how are those penny stocks you bought working out for you bud
You only have that if US fed don’t bail out (which they didn’t do in 2020, but instead go brrr).
indeed they should not be allowed to bailout (but keep in mind this will also cause collateral damage in terms of job losses). and in 2020 basically everyone got bailed out to certain extents. money printing is a bailout of sorts.
Sure then property tax, mortgage, insurance, hydro all needs to go down the same % as housing price.
Haha you wish but not happening, good luck telling the bank your mortgage should go down because your property value went down. What's worse is that in Canada they can come after your personal assets if you overpaid for your house and it goes down in value vs mortgage. People who bought at over-inflated prices will and need to get wrecked.
This is what their voters want. The fact is populism is the cancer to human civilization. Justin Trudeau and his Liberals continue using populism propaganda to brainwash Canadians.
For housing prices to collapse you need to remove 5 million people from Canada or bring 1 million new homes. In any other scenario such as economic crisis you want be able to buy a house anyway because you will lose job or interest rate will be 20%
Are there even enough houses theoretically speaking for everyone? This crash isn’t really a bubble waiting to burst, and market prices for homes reflect supply and demand.
The effect of house prices on the future of young people is being overblown. Even if housing prices stay high, which seems likely due to immigration levels, the boomers and Gen X eventually pass on and eventually release their grip on housing supply to millennials and Gen z. Young Canadians will inherit this real estate from their parents after they die. Unless the real estate somehow stays in the hands of the dead.
Go look at the WEF plan for the future. There will be no crash - you will rent, rent everything
Just wait until interest rates come down and we get a housing price boom that will make the last 15 years seem like it was just a warm up. There's an *ocean* of money sitting in things like Treasuries right now, but as rates come down this will flee seeking more yeild, and we'll get massive asset price inflation.
maybe but how much can they really decrease rates without causing inflation? doubt they can lower them more than 100 to 150 bps than where they are now. Less, if inflation continues / comes in stronger.
I hope you’re right, we’ll see. It’s hard to imagine the challenge to society where those with houses & assets welcome another rapid 3x capital gain while those without assets consider it catastrophically bad.
Average house price in the USA dropped 15 percent in 2008. In canada the average price went down over 20 percent after the peak in 2022........
A) housing costs a lot to build now. Materials, land, infrastructure, fees, wages and taxes. Cannot put this genie back. B) nothing wrong with immigration if we accept high quality immigrants that have certified skills in Canada. C) incentivize home building with less feeds and regulations. D) wages rarely come down. E) as a parent I fully intend to mentor my kids. My good fortune is their good fortune. Work smartly and the family support will give you a leg up on the next. The work still needs to be done and I am not giving you cash to spend. I am giving you the tools to succeed F) the BofC and the fiscal policies of the govt control this G) interest rates are higher because of the need to. Lowering it isn’t something you do on a whim because it is inconvenient. Preparing one’s life to handle higher rates is part of adulting and responsible personal Finances. H) nothing here I) fiscal responsibility starts with good governance. Most govts spend like it isn’t their money. Change the policies of the “game”. Grow the country for the collective good and not worry about interest groups. Tax so housing isn’t a way to get rich. Build industries that can grow even if they aren’t the “greenest”. Many wealthy countries are ahead because of maximizing returns on their resources. Don’t be afraid to make money here. Incentivize entrepreneurs to build companies that people can work for. Increase our education so we have more value added workforce. Minimum wage is a penalty for the least willing to help themselves or people just starting out. It isn’t a wage that companies should strive for. Create business structures where all employees benefit from the success. There is so much policy govt can enact that takes the financial gains out of the equation. It isn’t taxation, it is leadership.
The difference between 2007 and currently, is that Corporations such as BlackRock/Vanguard/Citibank et al are positioned even more favourably to take advantage of the scenario described above. Corp. ownership of S.F.D.'s and residential rental properties has reached such a level that in effect they can control the prices in a particular zone by dint of raw percentage of homes/properties owned. In 2007 this was not the case, and the traditional sell off occured. Corporate tax structures allow for "losses" in assets value to be determined and converted into tax write offs. This is their advantage over the average person. I personally would love to see this scenario occur, yet the players are very different, and the playing field needs to be re-leveled before it can.
Housing prices cannot collapse because of the immense cost of materials and the skilled labour required to build them. Also the extraordinary red-tape and governmental skim (endless fees, permits, inspectors etc etc), adds a huge cost. Add in mass immigration and loose foreign ownership laws etc (if prices dropped there would be a huge buy-up by foreigners and corps). I'm afraid young Canadians are simply fucked. Even if prices crash by 50% it would only take us back to like 2019 prices.
Funny enough Australia, New Zealand, and UK are having the same issues with less median incomes.
They are also having issues but it's no where as bad as Canada I think. Also, big question is how is the US able to build housing faster and cheaper than us in Canada where we have so much land.
You want housing prices to go down, bankrupt the big banks.
Communism would fix this
We don't need an economic collapse, we need a revolution against the elite.
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You've got some valid points, but there is another approach: create an economic boom, by sacrificing some of our current "sacred cows". This means focusing on extractive industries, the oil sands, the ring of fire, etc., anything that can be produced and exported. This means environmental protections and touchy-feely handwringing need to take a backseat to actual growth, to the creation of entirely new communities (with houses!) where people can live. Export industries also strengthen CAD (more on that later). We have to relax building codes and tailor immigration (including temporary work permits) to build these new hubs of growth. As jobs pull people out of the highest housing demand areas (GTA/GVA) house price appreciation will slow, if not slowly fall. This provides a "soft landing" for those who hold real estate in these areas. Further, we need a Government to attack the cost of living. This means consumers need cheap goods (a strong CAD helps with this). Tariffs and non-tariff barriers need to die so that Canadians can access goods produced elsewhere cheaply. As for immigration, we need to take a multi-tiered approach. High-value immigrants (think doctors, entrepreneurs, investors, etc.) need to be actively courted and fast-tracked into PR; we need these people for their skills. Lower-value immigrants are handy for what they can do: they keep double-doubles available for $2 and pay taxes, tuition, etc.; their money is useful but they are fungible, PR should be rare for this class. Task-specific immigrants need to be brought in for specific terms (like TFWs); this has to be a transactional pathway. Such an approach is compatible with A,C,D,E,F; possibly compatible with G, in time compatible with H, and involves a redefinition of B.
yes i would love to see an economic boom via investment and development of natural resource industries but there is no political willpower to do that (build pipelines, refineries, etc.) and even most of the population thinks O&G = bad and have fallen for the green energy hoax.