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Homes will never again be affordable because the system is completely broken (and not broken in the Millhouse expression, but rather in a normal definition). We made housing a commodity rather than a necessity of life and it ended with predictable results.
Now we have the unpleasant decision of diluting the investment of millions of Canadians or continuing to allow millions of Canadians to never own a home.
man that sounds like a win win, fuck investors
Sorry, you misunderstand slightly.
I don't mean investors in the sense of speculative parasitic humans who are devaluing life by overvaluing housing.
I mean, people like me who have worked from the age of 15-49 and now own a very modest sized apartment that is grotesquely overpriced and has quite literally enslaved me to mortgage payments for years to come.
If we devalue my apartment, why did I spend decades of sweat and toil to purchase it? Then it feels like I was playing the stock market.
And this isn't the same argument as the "why should people get free school when I had to pay student loans" since one doesn't affect the other. In this situation, if the value of homes come down too significantly, it's literally devaluing my work.
I didn't create the horrible dystopian system we live in but I do unfortunately have to abide by its rules. And now that I have a tiny piece (on paper but owned by the bank) I am hoping (like most Canadians) to take that piece and cash out to retire on in 10-15 years time.
What I'd really like to see is some kind of national housing strategy that guaranteed people basic housing regardless of their income (even if it's "zero"). That housing wouldn't impact the market but it could slow down the unhealthy growth of the valuation of housing.
If we could totally slow housing valuation growth to the normal 2% inflation, while also creating affordable housing for lower income/no income earners, then the system could adjust and that could be a true win win.
What a thoughtful and respectful comment/response! This is why I come here and have stopped using reddit entirely
If we devalue my apartment, why did I spend decades of sweat and toil to purchase it?
a place to live?
Exactly! Imagine if I said, "If we devalue my car, why did I spend years of toil to purchase it?" I'd look crazy. You buy a car for its innate utility, just like you buy housing for its innate utility. Cars ain't an investment, and neither should housing be. Possession of artificially scarce property should not be the key to free money taken from those with the misfortune of being younger or later to market than you β that's exactly the mechanism speculators and landlords exploit, driving up economic inequality and making life 100x harder for the rest of us.
Exactly. This is basically the reality for everyone stuck renting.
If we devalue my apartment, why did I spend decades of sweat and toil to purchase it? Then it feels like I was playing the stock market.
I considered the price of housing to be inflated, so instead of buying a home, I rented and invested the difference in the stock market.
Why is it okay for me to lose the the hard-earned money I invested in the stock market, but it is not okay for housing prices to go down? When stocks go down I still need to pay rent every month, but when house prices go down you don't lose your home.
Either we treat housing as an investment, in which case we need to accept the risk that prices will go down, or we treat it as a basic life necessity, in which case it must be affordable. We can't say: "I bought a home with my hard work, so now it must pay for my retirement".
Very well put.
I never wanted my house to be a stock market investment. It's just that I want some consistency. Tell me what I'm getting into. Are we playing this game where we bid for overpriced housing as a supplemental retirement benefit? Or are we building a better future where the former doesn't matter? I just don't want to get fucked, that's all.
I never wanted my house to be a stock market investment. Itβs just that I want some consistency.
But earlier you also said:
And now that I have a tiny piece (on paper but owned by the bank) I am hoping (like most Canadians) to take that piece and cash out to retire on in 10-15 years time
I.e. you see your home as an investment from which you expect to see a positive return, but now you are afraid that it may lose some of that value.
I get it: I would also like my investments to grow. The reality is that investing comes with risk. People who want to minimize that risk keep their money in a savings account, a GIC, or treasuries. With low risk come low returns, though. There is no free lunch.
Here is what is different: when we overbid for housing and it becomes expensive, real people suffer from homelessness and overcrowding. The same isn't true of stocks or other investments.
I.e. you see your home as an investment from which you expect to see a positive return, but now you are afraid that it may lose some of that value.
No, I don't see it as an investment. The way the system works sees it as an investment. We've created a system whereby housing is overvalued because it's meant to have inflationary payoffs.
My parents didn't see our home as an investment. They just bought homes at random that were close to where they worked and seemed good for kids.
There's no option for me to buy a place that isn't an investment because that's the very nature of the market.
in a way you already got fucked by buying an overpriced house and even if housing prices go down, you only get fucked more if you buy a cheaper hose relative to your current one, and only way you can really benefit from higher housing prices is also by buying a relatively cheaper house and pocketing the difference
"Waaaaaaah! I bought it as an investment! I shouldn't have to deal with the results of an overvalued investment going through a market correction!"
When you say "fuck investors" do you also mean everyone who has any savings or pension? Because these people are investors.
Like, fuck me for opening a HISA and contributing to my RRSP?
Nah I know the system that regular workers have to use for retirement, because the system's warped to only work that way. And then they get shitty, or no retirement because of how it works, they're competing in a contest that rewards the wealthiest, and the prize is more money. It should be truly savings, from an income not obliterated by the wealth inequality we have from an investment economy, or better supported by taxes from the new generation of workers, that right now have been steadily becoming less and less able to support retirees, again from wealth inequality because investment is a broken feedback loop that concentrates money away from the bottom.
Lots of people have to make use of systems they dont agree with.
The math is very simple:
There are more people wanting to buy a house than the number of houses available
We made housing a commodity
We didn't, though. A commodity is interchangeable. Housing is not interchangeable. A house in Iqaluit cannot meaningfully replace a house in Toronto. If housing were made a commodity it is likely we wouldn't have the problems we have, but since we have never done such a thing...
The referendum on Berlin expropriating 240,000 residential properties from corporate ownership. Something to consider.
https://www.theguardian.com/commentisfree/2021/sep/29/berlin-vote-landlords-referendum-corporate
Canada needs a more socialist government. Both the CPC and LPC are neoliberal fucktards.
I know the YIMBY movement has been growing tremendously across North America lately, but we still have a long way to go to actually eliminate the core problems manufacturing this housing crisis, e.g., mandatory parking minimums, exclusionary zoning, and rampant NIMBYism.
Housing ought to be a consumer good like any other -- you buy it, use it, and it depreciates with use. Nobody expects a car to increase in value once you drive it off the lot. But somehow with housing, we've all bought into the delusion that housing is an investment. But to be a good investment, it has to appreciate faster than inflation, which means it cannot be affordable!
But this delusion is exactly why we have so much NIMBYism. If you manufacture an artificial scarcity to block out competition, suddenly the class of people who own homes or property can milk it for lots of money, at the expense of the rest of us. And almost all our politicians are homeowners.
Dammit this makes too much sense!
What a succinct way to put it
Any solution, no matter how perfect, will take years to implement and have a real effect on housing prices.
That said, it's either a half decade form now with a great policy, or several generations from now with bad policies, so don't give up the fight to have good housing within our lifetimes, as it will transcend elections.
Never give up
It's never coming back down, corporations figured out it was a choice between a finite sum of money through selling, or indefinite income through renting. So they've been buying up property like crazy and outbidding anyone actually trying to live somewhere, of course corporation is gonna have more money and the RoI is virtually infinite no matter the price.
This is only a small part of the problem. The issue is that corporations are bidding on an extremely limited number of lots. Like a hundred firms on five lots kinda insane. By bidding on each other over and over, the prices inflate, and the end result ends up having to rake in more money just to recoup the costs.
It's just plain illegal to build multiplexes on single lot residential. That's why you can get several square km in the middle of downtown of only single family houses with front and back yards, with 50 story sky scrapers a few blocks down.
and the end result ends up having to rake in more money just to recoup the costs.
that's not how prices work
This is exactly how prices work. The minimum price of something is the price at which something costs to procure and produce, with anything added on top being profits. And this being typical western capitalism, they do what they can to increase profits as much as possible, and with housing being a requirement not a luxury, people pay whatever is asked.
Those houses could cost 5% of what they cost now and rent would be the same, because people will pay it.
I'm not talking about individual houses. I'm talking about condos that easily cost more than the land they're built on so they can maximize profits.
I encourage everyone to check the source cited, it's a PDF with some great extra info that isn't in the BNN article.
Ban corporate ownership. Tax domestic speculators significantly who own 3+ properties, watch the market correct and supply come back.
Why not 2+?
And ban Single Family only zoning, and upzone
https://policyalternatives.ca/publications/commentary/upzoning-and-housing-affordability
Itβs been rough out there. My wife and I recently moved and purchased a home in Edmonton as it is one of the few βaffordableβ cities left in Canada.
There's always Winnipeg, but then you have to live in Winnipeg.
It won't last. Various "armpit" towns throughout Ontario are now unaffordable. North Bay, Timming, Peterborough, Thunder Bay: all of them were cheap, and fell to investor speculation-based increases.
I'd encourage other provinces to preemptively smack down speculation hard, now, before the problem metastasizes. Don't wait until GTA or GVA property investors have played Monopoly in your small town; do it now, even if it offends a few established property owners.
I moved to Winnipeg 5 years ago. You're right.
The place would be a lot better if the provincial government would stop putting barriers up for anything that would benefit the city. As it is, we might as well not even have a mayor and council as the province regularly overrules decisions they make.
I'm from Winnipeg and moved away for school. I'm nearing my final term of college and it's downright depressing to think I may have to move back out of financial necessity
Same here. Edmonton is all right, real estate prices at least on our area are not insane yet. But I do wish it was less addicted to cars.
My wife and I are considering Nanaimo. It feels affordable in comparison to Vancouver or anywhere remotely near Victoria.
Will any other city in BC meet even that level of affordability in the next few years?
Toronto and Vancouver will remain very expensive not matter what. Inherit your parents mcmansion or place your bets on some other region that might become prosperous in 3 or 4 decades.
Doesn't even have to be a mansion. Some broke-ass bungalow is still worth keeping a death grip on unless if policies change significantly. Even if it burns down, the land alone will be worth a good million now, and will keep on rising.
Hold on to any property, even if you have to live in a tent on some barren soil until you can save up enough to have something half decent built.
Only real policy change can fix this, as no amount of money will be enough to fix this housing crisis. Even if the federal government puts in a trillion into new housing in Toronto alone, it won't fix this crisis until the laws themselves change.
What will policy change? Policy so nobody wants to live or do business there anymore?