Housing crisis in Canada

[armoured]

For those getting in the past few years, sure. But for someone who has bought pre-2015/2010, like I've mentioned, even a 50% drop in prices means I still don't break even and make a huge profit.
...
There has been a huge wealth shift and it is in the interests of people in these areas of GTA/GVA to keep having house prices rise with the Liberal government hand-in-hand helping

I'm not sure what point of mine you're disagreeing with. Yes, lots of people have made lots of money and are spending it.

But for some - buying late, having taken on large amounts of extra debt (based on increased paper values), or whose financial/business models are based on housing prices increasing faster than [everything, forever], at some point it will stop working and start to hurt. (And quite likely a lot of those people who made massive gains before will start to feel less secure, too, and reduce their spending, with obvious impacts).

At some point, housing prices will stop increasing faster than incomes (technically with a few other mathematical terms in there to reflect interest rates and inflation) - because it's impossible for them to increase faster than incomes forever. That doesn't mean eveyrone will be impoverished or starve, but that some things will have to change.

(That said - for Ontario and GTA especially - population growth has exceeded housing additions for a long time and probably for years to come. So I'm not predicting any rapid collapse in housing prices.)

 

[canuck78]

You're forgetting about the stock market. Tons of money made there.

Although I do agree with your statement that most of the wealth accumulated has been by those who already had it. You can't make money off the stock market without already being in it.

True. Unless you cashed out it still is wealth on paper not hard cash. When describing increased savings due to the pandemic it is usually in reaction to lack of opportunities to spend.

 

[canuck78]

I was doing some research on Calgary regarding jobs & housing. Looks like it is better to forget about Toronto & Vancouver.

Trailer/Mobile homes can provide great solution to the housing crisis. Why are they not(?) popular in Canada? Is weather the real issue?

If you can find a good paying job yes Calgary may be an option. Housing prices usually coincide with the availability of opportunities. Looking at just housing prices in isolation shouldn’t ever be a consideration unless you work remotely.

 

[canuck78]

I'm not sure what point of mine you're disagreeing with. Yes, lots of people have made lots of money and are spending it.

But for some - buying late, having taken on large amounts of extra debt (based on increased paper values), or whose financial/business models are based on housing prices increasing faster than [everything, forever], at some point it will stop working and start to hurt. (And quite likely a lot of those people who made massive gains before will start to feel less secure, too, and reduce their spending, with obvious impacts).

At some point, housing prices will stop increasing faster than incomes (technically with a few other mathematical terms in there to reflect interest rates and inflation) - because it's impossible for them to increase faster than incomes forever. That doesn't mean eveyrone will be impoverished or starve, but that some things will have to change.

(That said - for Ontario and GTA especially - population growth has exceeded housing additions for a long time and probably for years to come. So I'm not predicting any rapid collapse in housing prices.)

Remote work opportunities and businesses relocating because the cost of housing will likely help the housing market in the GTA a little bit. Many young families just give up on the GTA which is why the Hamilton and Ottawa markets became so strong. Agree that the will likely be a point where the market will become essentially flat for many years. We still haven’t even seen major financial impacts from Covid since there was so much stimulus. We see it in many countries, housing prices have become so detached from family income that this can’t go on forever. The baby boomers are the ones who have benefitted from increases in housing prices plus many have pensions, etc. while that is not the case for a younger generation.

 

[arhue]

Remote work opportunities and businesses relocating because the cost of housing will likely help the housing market in the GTA a little bit. Many young families just give up on the GTA which is why the Hamilton and Ottawa markets became so strong. Agree that the will likely be a point where the market will become essentially flat for many years. We still haven’t even seen major financial impacts from Covid since there was so much stimulus. We see it in many countries, housing prices have become so detached from family income that this can’t go on forever. The baby boomers are the ones who have benefitted from increases in housing prices plus many have pensions, etc. while that is not the case for a younger generation.

There are two things to real estate:
1. Real estate tends to have decade long cycles. Prices don't correct but stay there for decades. When you are leveraged, you lose a lot more when prices stay the same.
2. Because houses are not affordable, doesn't mean prices won't go up. That's a fallacy in real estate. There are very poor countries with low 4 digit per capita incomes where a condo in cities costs upwards of million US.

 

[steaky]

Trailer/Mobile homes can provide great solution to the housing crisis. Why are they not(?) popular in Canada? Is weather the real issue?

Previously, it was a solution in Vancouver. But then the city issued parking tickets.

 

[canuck78]

There are two things to real estate:
1. Real estate tends to have decade long cycles. Prices don't correct but stay there for decades. When you are leveraged, you lose a lot more when prices stay the same.
2. Because houses are not affordable, doesn't mean prices won't go up. That's a fallacy in real estate. There are very poor countries with low 4 digit per capita incomes where a condo in cities costs upwards of million US.

2. The case in China and there will certainly be consequences. The poor countries with expensive condos are often owned by the elite, expats, corrupt officials etc.

 

[Western Mountain Man]

Previously, it was a solution in Vancouver. But then the city issued parking tickets.

Actually the tickets were only issued to RV's parked on the streets in certain areas for extended periods of time.
(Many without insurance).

I think small prefab homes are a viable solution if the federal government provided funding and the city provided the land.
Could be a temporary or permanent solution.

 

[canuck78]

Actually the tickets were only issued to RV's parked on the streets in certain areas for extended periods of time.
(Many without insurance).

I think small prefab homes are a viable solution if the federal government provided funding and the city provided the land.
Could be a temporary or permanent solution.

Unless you were only talking about a few homes, most cities are not in the position to provide huge parcels of land for free and connect prefab homes to all the utilities. What you are suggesting is more like an option for subsidized rental housing.

 

[YVR123]

Unless you were only talking about a few homes, most cities are not in the position to provide huge parcels of land for free and connect prefab homes to all the utilities. What you are suggesting is more like an option for subsidized rental housing.

Yes. they exist but it takes a long while to get into subsidized rental housing. And it is part of social assistance (I believe).

https://vancouver.ca/people-programs/temporary-modular-housing.aspx

 

[canuck78]

Yes. they exist but it takes a long while to get into subsidized rental housing. And it is part of social assistance (I believe).

https://vancouver.ca/people-programs/temporary-modular-housing.aspx

That is rental stock not housing for purchase and would not solve the issue for first time buyers or the missing middle. Also only a fraction of the rental units necessary.

 

[YVR123]

That is rental stock not housing for purchase and would not solve the issue for first time buyers or the missing middle. Also only a fraction of the rental units necessary.

Agree and I don't see government promoting this type of modular house for regular for rent or for purchase development.

These modular housing unit is only to help some that are suffering from homelessness.

 

[canuck78]

Agree and I don't see government promoting this type of modular house for regular for rent or for purchase development.

These modular housing unit is only to help some that are suffering from homelessness.

Essentially replacing some SRO rooms since this is not only affordable housing but housing for people with complex issues as well as homelessness. Don’t think this is even longterm housing. Assume that with housing, structure, social work, nutrition, etc. many will hopefully get stable enough to move into housing without the services. Once they shut down some of the SROs due to deplorable conditions the needs will increase since so many are housed in these one bedroom rooming homes. Believe the government is taking possessions of many SROs due to lack of maintenance from the landlord so they may tear them down and build new affordable housing or sell off the land. Assume the modular homes have a limit when it comes to the amount of stories especially in an earthquake zone which would make it a tough sell in a place like Vancouver where you really need to maximize the amount of housing in the downtown. Affordable rental housing and homes to purchase are both complex issues and not easy to solve. We are certainly not alone many countries are struggling with the same issues mostly due to extended period of low interest rates. When pension funds start buying up whole suburban developments you know things are out of control.

 

[Western Mountain Man]

Agree and I don't see government promoting this type of modular house for regular for rent or for purchase development.

These modular housing unit is only to help some that are suffering from homelessness.

You have to start somewhere.

The modular housing can be built to many different specifications and don't require a large parcel of land. I think the city should start
with the priority cases and then move forward from there. Who knows, maybe it could expand to some sort of family housing complex?
There are lots of smart people around with design and engineering. What a great employment project!

You are correct regarding the subsidized rental housing.
There are strict application requirements with not much availability and the wait list can be a year or longer depending on the location.

Where are all the new ' Canadians ' going to live?

 

[arhue]

Institutions buying housing is not a bad thing as they refurbish, renovate, maintain and release more rental supply into the market. Issue is the supply. Not enough housing, especially highly dense housing is being built and that is the core reason for the high prices.