Cost of housing in Canada

[brihard]

I also feel sympathy, but admittedly very little.

Despite making very good money, I'm priced out of the market right now mostly for reasons beyond my control. I need a correction, at least a small one, to make any progress. But I'll also allow my tolerance for risk is pretty low and it is, as best I can tell, a risky market to get in to right now. And so my rent continues to pay somebody else's mortgage.

And that’s pretty telling right there. You’re making about as good an income in your job as pretty much any normal person can realistically hope for, absent being one of the relatively few that break through into truly high paid professions. Despite you having a good base salary and the ability to make quite a bit more of you want to, you’re pretty much SOL for owning even a modest home in the area you live. That’s pretty dismal, and not at all encouraging for the large majority of the population making less. If you can be making six figures and not have a realistic shot at owning a home, what the hell is everyone else supposed to do?

 

[Brad Sallows]

The "principal residence increase in value is tax free, without limitation" is an obvious example of federal tax policy influencing the housing market.

Sure, but for almost* everyone, not just a chosen few.

* I can't be sure there aren't some people out there who have to pay capital gains tax on a primary residence sale.

 

[Brad Sallows]

The challenge with that is that ‘the market’, left to its own devices, will seek to maximize profit and has no overriding vested interest in ensuring pretty much everyone has access to a safe roof over their head

So no, as proud as some 1800s economists would be of your fervent devotion, this is not an issue that is appropriate to be left fully or even mostly without government intervention in the form of various policies.

You can't leave out parts. The existence of profits is an opportunity signal to competitors; the bigger the profits, the more quickly competition moves in. Unless an anti-competitive situation can be engineered or supply is artificially constrained (eg. by making it difficult or worthless for providers to enter a market), competition squeezes profits. Simple observation confirms that profits aren't a runaway train.

The vested interest is that every additional profitable unit sold is more profit for a seller.

Rent controls are one of the "various policies". How have those worked out?

 

[brihard]

You can't leave out parts. The existence of profits is an opportunity signal to competitors; the bigger the profits, the more quickly competition moves in. Unless an anti-competitive situation can be engineered or supply is artificially constrained (eg. by making it difficult or worthless for providers to enter a market), competition squeezes profits. Simple observation confirms that profits aren't a runaway train.

The vested interest is that every additional profitable unit sold is more profit for a seller.

Rent controls are one of the "various policies". How have those worked out?

I never claimed profits are runaway. I identified profit as a motive (which is fine), and that that motive, the more it’s left to its own devices, will tend to leave some people behind, figuratively and literally out in the cold.

I understand that rent controls have constrained new supply; every new investment decision by someone or some business with capital has to consider ROI. Rent controls can limit this. On the flip side, lack of rent controls, or ways around them (e.g., renovictions) leaves people at the bottom completely unable to afford a place to live. So, there needs to be room for policy options to protect low income renters in a market where rents have climbed considerably more than incomes have.

The market abandons those who don’t have the means to boost someone’s profits, and therefore the market alone cannot be relied upon to ensure everyone with an income has a safe place to leave.

 

[Brad Sallows]

The market abandons those who don’t have the means to boost someone’s profits, and therefore the market alone cannot be relied upon to ensure everyone with an income has a safe place to leave.

We can't possibly know that to be true with the amount of policy distortion that currently exists. Too often "market failure" in assumed where "government failure" is present.

 

[brihard]

We can't possibly know that to be true with the amount of policy distortion that currently exists. Too often "market failure" in assumed where "government failure" is present.

Uh huh. Cause if we 'just trust' the free-market-absolutists and let them run with it, something will magically cause the markets, operating rationally and with a profit motive, to provide decent housing to people who cannot come close to affording what the market will bear. We can infer this from the extensive history of unregulated free enterprise ensuring that the greater public good is served and ensuring that business interests and investor returns are constrained by ethical imperatives.

I don't need to slam the trunk lid on my dick to know it'll probably hurt.

 

[Colin Parkinson]

And that’s pretty telling right there. You’re making about as good an income in your job as pretty much any normal person can realistically hope for, absent being one of the relatively few that break through into truly high paid professions. Despite you having a good base salary and the ability to make quite a bit more of you want to, you’re pretty much SOL for owning even a modest home in the area you live. That’s pretty dismal, and not at all encouraging for the large majority of the population making less. If you can be making six figures and not have a realistic shot at owning a home, what the hell is everyone else supposed to do?

My friend, RCMP Constable and his wife as a ER Nurse at LGH could not afford to buy a two bedroom apartment in North Van. People like myself who owns a home here a a shadow of a time long passed where normal people could afford to live here. Interesting that one of the fancy apartment buildings here has had two gang related assaults with serious injuries in it despite the short time it's been there. To buy now you either seem to need old money or being doing something illegal.

 

[brihard]

My friend, RCMP Constable and his wife as a ER Nurse at LGH could not afford to buy a two bedroom apartment in North Van. People like myself who owns a home here a a shadow of a time long passed where normal people could afford to live here. Interesting that one of the fancy apartment buildings here has had two gang related assaults with serious injuries in it despite the short time it's been there. To buy now you either seem to need old money or being doing something illegal.

Basically seems like the only way in is to buy a small condo in Surrey or Langley to at least start building equity, and hope that maybe you can make it up to a townhouse by the time you retire.

 

[Eaglelord17]

And that’s pretty telling right there. You’re making about as good an income in your job as pretty much any normal person can realistically hope for, absent being one of the relatively few that break through into truly high paid professions. Despite you having a good base salary and the ability to make quite a bit more of you want to, you’re pretty much SOL for owning even a modest home in the area you live. That’s pretty dismal, and not at all encouraging for the large majority of the population making less. If you can be making six figures and not have a realistic shot at owning a home, what the hell is everyone else supposed to do?

The top 1% of income earners cannot afford a average house (approx 720k) with a 5% downpayment anymore.

 

[Quirky]

Basically seems like the only way in is to buy a small condo in Surrey or Langley to at least start building equity, and hope that maybe you can make it up to a townhouse by the time you retire.

The only way is not to live in the GVA. With their salary they can live much more comfortably in Alberta, Sask or Manitoba. I see no perks being in North Van with the cost of housing, the scenery and weather isn’t worth it.

 

[Furniture]

The only way is not to live in the GVA. With their salary they can live much more comfortably in Alberta, Sask or Manitoba. I see no perks being in North Van with the cost of housing, the scenery and weather isn’t worth it.

All that happens then is the other areas get too expensive for the locals too... It's happened in the cities in the Maritimes, and the smaller cities in Ontario already. Sell your home in Toronto/Montreal/Vancouver for $1M, buy a home in the Maritimes, or Belleville/Kingston/Peterborough for $600K.

 

[brihard]

The only way is not to live in the GVA. With their salary they can live much more comfortably in Alberta, Sask or Manitoba. I see no perks being in North Van with the cost of housing, the scenery and weather isn’t worth it.

Well, no, given that I have several friends who are working professionals in the GVA and are making it work because for them it is worth it- but they’re doing it the way I describe.

Some people really like that part of the country and want to live there (maybe the climate, maybe family, maybe just because it’s home) and make major compromises to pull it off. It’s fine if they do, just sucks that it’s necessary. There’s some inevitable demographic hollowing out that results.

 

[RangerRay]

I am not sure how much this affects house prices, but I wouldn’t think it’s helpful.

Money laundering from China into Canada increasingly used banks and homes after COVID-19: FINTRAC

With casino closures during pandemic Canada's financial watchdog observed more wire transfers from Hong Kong into real estate, law firms, securities

www.thebureau.news

Fintrac’s findings raise concerns that Canada’s housing market is being used widely and increasingly in these schemes, and prompt questions about how this criminal activity is impacting prices in the nation’s already overheated real estate.

 

[IKnowNothing]

All that happens then is the other areas get too expensive for the locals too... It's happened in the cities in the Maritimes, and the smaller cities in Ontario already. Sell your home in Toronto/Montreal/Vancouver for $1M, buy a home in the Maritimes, or Belleville/Kingston/Peterborough for $600K.

Yup, simple math. It takes a very small percentage of people of an urban area in the millions liking the looks of an area to distort a market where the number of homes for sale is numbered in the hundreds.

 

[Brad Sallows]

Everyone likes to blame foreign money.

As I've written elsewhere in response to "shrinking middle class" claims, what is actually happening is that people are moving up. It should be obvious that increases the demand for more luxurious housing. If supply is short in the market in which they'd prefer to buy, they can shop down, outbidding people with lower incomes and having income to spare to renovate and improve. We should expect to see creeping gentrification, and that is what is observed.

Unwillingness to understand and yield to the way people behave generally produces failures.

 

[Colin Parkinson]

Foreign money was involved, some of that is lessening due to regulatory moves here and global issues. Moving capital out of places like China has become quite hard now. which is why the housing prices here are not connected to the domestic wages.

 

[mariomike]

Some welcome news regarding rail service for readers who may wish to take advantage of housing prices in Northeastern Ontario.

The route identifies 16 stops including Toronto (Union Station), Langstaff, Gormley, Washago, Gravenhurst, Bracebridge, Huntsville, South River, North Bay, Temagami, Temiskaming Shores, Englehart, Kirkland Lake (Swastika), Matheson, Timmins, and Cochrane.

Northlander Passenger Rail Updates | Ontario Northland

Ontario Northland is proud to be working toward the reinstatement of passenger rail in Northeastern Ontario! The passenger train service, also known as the Northlander, will fundamentally shift how people move across the province, creating a more connected, integrated transportation network...

www.ontarionorthland.ca

 

[Quirky]

Sell your home in Toronto/Montreal/Vancouver for $1M, buy a home in the Maritimes, or Belleville/Kingston/Peterborough for $600K.

Who's buying up those bubble houses in Toronto/Mon/Van?

 

[Furniture]

Who's buying up those bubble houses in Toronto/Mon/Van?

Locals looking at $3K/month rent, and foreign investors looking for a safe place to park their money.

Edit: The average rent for a 1 bedroom apartment in Ottawa is $1890/month right now, 2 bedrooms apartments are about $2075.

 

[YZT580]

Locals looking at $3K/month rent, and foreign investors looking for a safe place to park their money.

Edit: The average rent for a 1 bedroom apartment in Ottawa is $1890/month right now, 2 bedrooms apartments are about $2075.

2075 will cover an approximate 350,000 mortgage. with average prices floating near 900,000 in the burgs where is your customer going to get the additional 550? 7 years ago that same average house was less than 500. Is it any wonder that kids are giving up?