Cost of housing in Canada

[YZT580]

Who said it hasn’t increased? I said growth is steady, as in rate.

Not talking about population growth but the influx of new families all of whom require new accommodation.
I would welcome any data you have on this, but it’s by no means a new issue.

Look up the number of illegals estimated in the country then add in the number of foreign students; all require housing. How does a planning department that has no advance knowledge of these numbers plan new schools, apartment development, roads, and services. They don't even have a clue where these people are going to settle. Do we just build apartments on the outskirts of town hoping people will come? The chinese tried that and it hasn't worked out too well for them.

Not sure which markets you’ve been watching, but housing prices have been flying upwards in larger markets far longer than that. In my family we’ve been dealing with real estate in greater Vancouver, which we’ve seen flying up since at least 2013 when we started paying attention, and Ottawa, which took off in early 2017 (very conveniently around the time we bought). Home prices very by the specific urban market as well as by the type of home. While there has been a bump on some sectors around the same time as the pandemic, that hasn’t been the start of any of this, and in most places the ‘affordability’ line for most normal people was crossed long before. Any moves to larger residences were generally driven by those fortunate enough to have already won the timing game with existing equity.

in housing price statistics from the GOC I looked up prices for 2020. Came across a graph showing the last 15 years. It was a constant gentle upward curve until first quarter 2020 at which point it went ballistic.

Local authorities can and in some places have banned short term rentals, and that is squarely provincial/municipal jurisdiction. Foreign absentee ownership is absolutely a big problem, and the federal government was slow to act there. Part of their infrastructure plan is to extend the ban on foreign purchase that they did finally implement a couple years ago, and I applaud that. Agreed but the barn door was too late closing Interesting to follow the action that Portugal and Tenerife are taking with regards the same issue.

 

[dimsum]

@YZT580 - regarding the house prices from 2020 onwards, both you and @brihard can be correct.

Brihard is correct that the larger markets (GTA, GVA, then others) the trend was going up. I saw it from 2012 onwards in Victoria. But, you are also correct that Q1 2020 spiked the overall Canadian market price.

My guess is that the rise of WFH due to Covid make a bunch of people in the GTA/GVA and suburban cities cash out of their houses there and buy (at an inflated price) places elsewhere in the country. That would account for spikes in places like NS, etc.

 

[mariomike]

'Quite remarkable': More than 4,000 people have expressed interest in $10 land plots in small-town Ontario

A small town in northeastern Ontario is being inundated with interest after announcing a program that would see plots of land for new home builds being offered for as low as $10 along with a five-year property tax break.

toronto.ctvnews.ca

Definitely some interest

Many Northerners travel to Toronto for specialized medical care.

Be nice if they can update the rates paid by the Northern Ontario Health Travel Grant Program, which, apparently, have not been updated in 14 years.

The Northern Health Travel Grant (NHTG) program offers financial assistance to Northern Ontario residents who need to travel long-distances for specialized medical services or procedures at a ministry-funded health care facility.

Hopefully, they will re-instate The Northerner sometime this decade.

Currently, getting to health care in Toronto requires travellers from Cochrane taking a bus, then transferring to another bus at North Bay.

 

[IKnowNothing]

Good quick read. Touches on a lot of issues and solutions - and why they won't be implemented- already in this thread.

https://www.cbc.ca/news/business/housing-prices-affordability-real-estate-1.7170775

 

[Colin Parkinson]

Good quick read. Touches on a lot of issues and solutions - and why they won't be implemented- already in this thread.

https://www.cbc.ca/news/business/housing-prices-affordability-real-estate-1.7170775

Technically correct, but the concept of a house being an investment is quite old. The goal when I was young was to make sure you built equity, because renting meant spending with no gain. Remind me of any business that would adopt that model long term?

 

[IKnowNothing]

Technically correct, but the concept of a house being an investment is quite old. The goal when I was young was to make sure you built equity, because renting meant spending with no gain. Remind me of any business that would adopt that model long term?

While true, I'd argue that there's a difference between how you're defining "investment" vs the article and what's been happening over the last decade. Optimizing your own housing situation as an investment in your own future vs. widespread adoption of housing as a speculative asset class and passive income source.

 

[Colin Parkinson]

While true, I'd argue that there's a difference between how you're defining "investment" vs the article and what's been happening over the last decade. Optimizing your own housing situation as an investment in your own future vs. widespread adoption of housing as a speculative asset class and passive income source.

Most of the people I know that are speculating and using it as income generators are immigrants, as they are the ones with the money to do so. Part of the reasons they have that money is they work much harder than domestic Canadians and they are more willing to pool family assets than domestic Canadians. The different mindsets play a big part in how money is spent and viewed. There is no correlation between wages and real estate values here in Vancouver. So the money to buy much of it, must be coming from somewhere else.

 

[Kirkhill]

Most of the people I know that are speculating and using it as income generators are immigrants, as they are the ones with the money to do so. Part of the reasons they have that money is they work much harder than domestic Canadians and they are more willing to pool family assets than domestic Canadians. The different mindsets play a big part in how money is spent and viewed. There is no correlation between wages and real estate values here in Vancouver. So the money to buy much of it, must be coming from somewhere else.

Colin, you are also looking at the modern iteration of the remittance man.

A conduit to bring foreign money into Canada.

Pluses and Minuses.

Remittance man - Wikipedia

en.wikipedia.org

"Remittance man" is defined in The Canadian Encyclopedia as "a term once widely used, especially in the West before WWI, for an immigrant living in Canada on funds remitted by his family in England, usually to ensure that he would not return home and become a source of embarrassment."[1]

The Oxford English Dictionary adds: "spec[ifically] one considered undesirable at home; also in extended use." "Remittance man" is first attested in 1874 as a colonial term. One of the citations is of T. S. Eliot's 1958 play The Elder Statesman in which the son of the title figure resists his father's attempts to find him a job: "Some sort of place where everyone would sneer at the fellow from London. The limey remittance man for whom a job was made." The OED gives "remittancer" as another form, which stretches back to 1750.

 

[Furniture]

Colin, you are also looking at the modern iteration of the remittance man.

A conduit to bring foreign money into Canada.

Pluses and Minuses.

Remittance man - Wikipedia

en.wikipedia.org

Combine that with, "get this money somewhere safe" as well as borrowing against the first property to finance the second, and maybe it's less that "domestic" Canadians are lazy slobs and more that rich people from outside are flooding cash into a safe market.

 

[Colin Parkinson]

Combine that with, "get this money somewhere safe" as well as borrowing against the first property to finance the second, and maybe it's less that "domestic" Canadians are lazy slobs and more that rich people from outside are flooding cash into a safe market.

The majority of domestic Canadians do not work as hard as most immigrants. I know people in the security industry, that routinely work 16hr shifts and study for a degree/certificate so they can move on to a better job. Most of them look on the 40hr work week as "part-time". There will be exceptions on both sides, but in general, people from developing countries are used to working harder than we are.

 

[Furniture]

The majority of domestic Canadians do not work as hard as most immigrants. I know people in the security industry, that routinely work 16hr shifts and study for a degree/certificate so they can move on to a better job. Most of them look on the 40hr work week as "part-time". There will be exceptions on both sides, but in general, people from developing countries are used to working harder than we are.

That is true to an extent, but is no more universally true than the idea that most of the property owning immigrants were already wealthy before coming here and used that wealth to buy into a safe real-estate market.

Like most things, there are a variety of factors at play.

 

[Brad Sallows]

All the finger pointing isn't worth much unless someone can provide the equations which allow us to calculate how much of an output (eg. home price or rental) change results from a perturbation of an input (number of new building trades apprentices, foreign investors, immigrants - every factor anyone thinks has something to do with the result). If one of the factors is dominant - a big input change, or the system is highly sensitive to that variable - then arguing over other factors is fly sh!t in pepper.

 

[Kirkhill]

All the finger pointing isn't worth much unless someone can provide the equations which allow us to calculate how much of an output (eg. home price or rental) change results from a perturbation of an input (number of new building trades apprentices, foreign investors, immigrants - every factor anyone thinks has something to do with the result). If one of the factors is dominant - a big input change, or the system is highly sensitive to that variable - then arguing over other factors is fly sh!t in pepper.

Brad, you are determined to take all the fun out of Economics. Stop asking them to prove stuff.

 

[Furniture]

All the finger pointing isn't worth much unless someone can provide the equations which allow us to calculate how much of an output (eg. home price or rental) change results from a perturbation of an input (number of new building trades apprentices, foreign investors, immigrants - every factor anyone thinks has something to do with the result). If one of the factors is dominant - a big input change, or the system is highly sensitive to that variable - then arguing over other factors is fly sh!t in pepper.

Doing nothing while waiting to find a perfect solution isn't an answer either. Unless you happen to be someone who is benefitting from the current situation, and don't want to see a change.

 

[Brad Sallows]

Doing nothing while waiting to find a perfect solution isn't an answer either. Unless you happen to be someone who is benefitting from the current situation, and don't want to see a change.

Sure, but be clear about where responsibility lies. Municipalities aren't responsible to fix the mistakes of provinces; provinces aren't responsible to fix the mistakes of the federal government. The elephant is all classes of people entering Canada from abroad. It isn't up to municipalities and provinces to find ways to house whatever amount of people the federal government admits.

Tangentially, with respect to the situation: anyone who has made decades-long plans based on "the rules" cannot reasonably be criticized for not wanting the rug yanked out from under him because someone in government f*cked up.

 

[IKnowNothing]

Tangentially, with respect to the situation: anyone who has made decades-long plans based on "the rules" cannot reasonably be criticized for not wanting the rug yanked out from under him because someone in government f*cked up.

Fair, but similiarly anyone who truly made "decades-long plans" cannot reasonably claim to have been counting on the massive shift we saw in the last 4-6 years from said fuck up, and as such measures to bring prices back to a pre 2019 reality cant be fairly described as a "rug pull"

 

[lenaitch]

Many Northerners travel to Toronto for specialized medical care.

Be nice if they can update the rates paid by the Northern Ontario Health Travel Grant Program, which, apparently, have not been updated in 14 years.


Hopefully, they will re-instate The Northerner sometime this decade.

Currently, getting to health care in Toronto requires travellers from Cochrane taking a bus, then transferring to another bus at North Bay.

The travel grant is also for travel within the north to regional cancer centres, etc.

Work on the Northlander has already begun; trainsets ordered, infrastructure upgrades started. Target for 2026.

The other travel options are fly our of one of the cities (not cheap) or, of course, drive.

 

[Brad Sallows]

Fair, but similiarly anyone who truly made "decades-long plans" cannot reasonably claim to have been counting on the massive shift we saw in the last 4-6 years from said fuck up, and as such measures to bring prices back to a pre 2019 reality cant be fairly described as a "rug pull"

Sure, not everything can be predicted. But I first bought in 1992, and prices in the market (greater Vancouver) were already moving up notably faster. (Interest rates were moving down: 18-22% ten years before I bought, 10% when I bought, 6.5% five years later. Factor that in to house pricing.) The feds have had lots of time to consider the impact of too much immigration, and we already knew the likely effects of too much government borrowing and spending well before 2015. It isn't that nothing should be done, but that admonishing people like me when we bitch about it isn't reasonable, and some of our complaints ought to be taken seriously and in some cases granted. And the government is also still working in opposition to the Bank of Canada (spending/borrowing), thus keeping interest rates - part of the problem - higher than they likely otherwise would be.

 

[Furniture]

Sure, but be clear about where responsibility lies. Municipalities aren't responsible to fix the mistakes of provinces; provinces aren't responsible to fix the mistakes of the federal government. The elephant is all classes of people entering Canada from abroad. It isn't up to municipalities and provinces to find ways to house whatever amount of people the federal government admits.

I agree, and I agree that governments at all levels have bungled housing and municipal planning for decades. So all levels of governmetn should be looking at ways they can reduce the factors hurting supply.

Tangentially, with respect to the situation: anyone who has made decades-long plans based on "the rules" cannot reasonably be criticized for not wanting the rug yanked out from under him because someone in government f*cked up.

I suspect the young people who played by "the rules" and are locked out of home ownership are no more happy to find the rules no longer apply... Meaning they are likely to vote for someone who will adjust the rules to make it more "fair" for them. Which is why it's in everybody's interests to find a solution to the problem before it becomes a crisis for everybody, and not just those who don't yet own a home.

 

[Brad Sallows]

I agree, and I agree that governments at all levels have bungled housing and municipal planning for decades.

Municipal planning hasn't been bungled if a municipality planned itself to be a certain way and people bought there because they liked the plan. That the federal or provincial government is desperate to shoehorn more people in should not be the municipality's concern. If a higher level of government moves to assert changes, consideration ought to be given to whether it might amount to a taking (expropriation of assets).