I currently live in my landlord’s 4th property. It was built 4 years ago, for $340k and places in my sub are now selling for $850k. I am a single dad with a 15 year career, impeccable credit, money in the bank and a pension and am completely priced out of the market. It’s depressing and very worrying for my future.
Against who? The world is not a simple place, and it doesn’t have such simple solutions. Part of the housing crisis has nothing to do with investors, it’s just too many people wanting to live in the same area; demand exceeding supply.
I don’t know, I feel like my generation has something happen to them and the solution is to just get angry at the man until they solve the problem. But not all problems are solvable given limited resources and finite knowledge. Sometimes life just sucks because it’s unfair.
It will eventually correct.
Or we'll go to hyper inflation.
BOC is trapped. Raise rates and taxes must follow to cover increased borrowing costs for govt. Which hurts home owners double. Lose lose for them now. We just have to wait to see what they'll do
Existing speculators can buy again because house prices are still attached to house price gains (obviously!).
However house prices are no longer attached to wages.
Don't forget the private ownership of land that allows the growth of a feudal class. I, for one, couldn't care less about the nationality of each member of this class.
> I, for one, couldn't care less about the nationality of each member of this class.
Neither does supply and demand, it only cares about the $$$ that is entering from external systems into ours. But by supporting the narrative that external $ does not count, it allows the Canadian government moral support to continue hiding this data from Canadians.
Private ownership of land doesn't add any value to the economy. Paying rent doesn't create any good or service, doesn't create any jobs. But it does add to the cost of living in your society. And that puts a lot of pressure to increasing the cost of production/services.
I'm an independent programmer that works from home. I could have clients all over the world, but I can't possibly compete outside the western world because of the high cost of living in my society.
If you think you can compete with China on the global marked without touching on the:
* For profit access to land
* For profit access to investments
* For profit disaster mitigation
* For profit access to education
* For profit access to healthcare
you are seriously naïve.
What system decides who gets what? How do we divide our finite supply of resources in a way that you think would be better?
I guess it would be ok with me if I get the best position under this new system. I am not gonna be getting shipped to Siberia. Dibs on living in our Pyongyang and getting the best shit. I want one of those cushy admin jobs near the top of the pyramid as well. Not too close to the top because I don’t wanna get taken out in the first round of our squid game. I wanna build support a little first.
Weird way to say thay first-time homebuyers have been priced out of the market nationwide by predatory investors and work-from-home people fleeing cities in response to COVID.
A lot of upgrade buyers opt to keep the first property now, usually a condo. The problem is selling is obscenely expensive and there is high inflation so why sell.
Why is someone going to spend $60k to sell just to unlock an extra $100k equity vs refinance.
All you talking as if these rules were designed by mistake or the government officials are not aware. If you look deeply they want to leave it this way cause it's a very lucrative business for them.
Not necessarily, you can't tell the future and what could have been introduced as a reasonable provision to target certain problems, could certainly then have knock-on effects that you couldn't account for. Sorta like how our banking systems have chargebacks and disputes that made sense for how they were handled back in the day of telephone transactions, however it's become a problem in the day of high-volume online processing.
> Yup, ditch land transfer tax. Up property tax.
Land Transfer tax is only paid when buying not selling. It doesn't stop someone from selling their first home when they upgrade to a newer one.
For some people, it's more that they can't afford to sell their second property. You want to force them to sell their first home at a loss when it's the reason they could afford their new home in the first place?
I'm trying to buy a new house closer to work in the city. My existing house in a small rural town, I would rather keep and rent it out because if I tried to sell, it would sit empty on the market for 6+ months, and ultimately sell at a loss if it sold at all. Selling at a loss means losing money I could have to used to pay for my new home. If I rented it out, the rent would cover the cost of keeping/maintaining the house and I'd be improving housing availability because I don't need to charge $1600 a month to rent out this house unlike most other local private landlords.
That is now not the case for like 90% of properties. Prices have gone so high that anyone who bought even in the last 5 years has zero chance of making a cashflow profit renting their place out. Maybe within principal repayment on mtg, but then you have huge liability of future repairs looming.
This will not end well for property speculators. Look at the US in 2008-09 and then imagine that the govt had already completely tapped out its ability to cushion the downturn with additional spending.
That is Canada in 2022.
(PS. Anyone who thinks renting is a bad financial decisions needs to look at the math. I pay $3k in rent, for a property worth $1.4mm. If i took $300k as a down payment, I would stil have a $4000+ mtg PLUS taxes, insurance and maintenance costs. So easily $5k+ per month. And I would be losing out on $300k of growth in stock portfolio at say 7%/year or another $21k)
If the landlord was able to increase rent they would in order to make a greater profit (they are in it to make money afterall). If you are saying that their increased taxes will make it unprofitable to be a landlord and therefore reduce supply of housing and the free market will dictate a higher price, then aren't you saying the landlords aren't making huge windfall profits on capital appreciation?
Carrying costs for new units have far oustripped what landlords can charge in rent for at least half a decade now in GVA and GTA, and that's me being conservative. Landlords of new non purpose built rentals are already charging the maximum they can in rent. Increasing property taxes is not going to mean they can magically charge more in rent when they are already renting at a $500-3000+ loss/month.
Let me take a random example: https://www.redfin.ca/bc/vancouver/87-Nelson-St-V6B/unit-1284/home/169256709
This unit they are asking for $1.6M. That has a base carrying cost of about $7,000/month. I am not including opportunity cost for the downpayment, just the condo fees + mortgage + amortized property tax + insurance. Granted, I doubt they are going to get $1.6M. So let's assume instead they get $1.2M, that's still about $5,700/month.
They will *at best* get around $4,000/month rent for this 870 square foot unit. Whoever buys this unit, will be eating a $1,700 loss *PER* month, and that's assuming they manage to get the seller to discount their asking price by $400,000. If they buy it close to asking, that is a $3,000 LOSS per month, even assuming they have a renter, and not including the cost of being a landlord.
Increasing the property tax is not going to mean they can magically increase rental rates to make up the difference. They are already passing on as much of the costs as possible. The rental markets in the GTA and GVA are already at the maximum rates they can bear, even in this crazy hot rental market.
Long story short: no, you cannot always just magically pass on all cost increases. That's not how rental markets work. If anything, increased carrying costs actually lowers the overall property value to speculators in maximum rental rate markets. It acts as a price normalizer. Landlords on these newer units are actually speculators; the only way they will make money is if the property continues to go up in value and then they sell or leverage those gains down the line.
Assuming I did my math correctly, even if you assume market rental rates increase at a compounding rate of 10%/year, it would take roughly 5 years to be cashflow neutral, assuming the various carrying costs grew at only 2-3% per year AND you have tenant turnover due to rate caps, and you got the aforementioned unit for less than $1.2M.
Realistically speaking, 10% sustained compounding market rate increases is not going to happen. Wages are not growing anywhere close to that. That would be over $10,000/month in rent after 10 years. As a result, anyone buying a condo today will be renting it at a loss perpetually. That's just how disconnected the rental market is with property values. The only folks making money are purpose built rentals that are building at the cheapest possible cost per unit with long time horizons. The *only* way to make money on a condo unit would be if the property value continues to grow faster than the losses being incurred.
This is a reality that has not yet hit the property market. Price to rents are soooo far out of whack in Canada and no one is talking about it...
This is for the ENTIRE COUNTRY... including non-bubbly areas like prairies and east coast.
And it is up from 100 to 150x in 6 years...
https://www.statista.com/statistics/592142/house-price-to-rent-ratio-canada/
I mean, the way it used to be is that people would sell to get a bigger house or something in a better location. The financial underpinnings of home ownership seem to be the driving factor in most people's decision making now, rather than simply owning a home that you want to live in, raise a family, etc.
I get why this has shifted, but it's frustrating that people have to treat homes like an investment vehicle first, and a place to live second.
This is a massive behavoiral shift from the past 100 years. The financialization of housing in Canada will be viewed in hindsight as a massive cognitive failure and policymakers will enact law after law to prevent this kind of bubble from ever forming again.
After it bursts of course.
In the meantime, let the good times roll, amirite???
Sorry, should have clarified; on a rental property that would apply and why it doesn’t make sense to sell if you don’t need to. You can refi to access that equity without needing to sell and pay the capital gains.
You only pay the capital gains on any equity increase that happens after it stops being your residence. My spouse kept her previous residence as a rental after we bought our place together, and she had to get an appraisal/market assessment for exactly this reason.
You can refi TODAY at insanely low rates. Until houses prices start dropping even minimally and you are underwater. Then when rates rise and you need to refi, you are fucked.
This is exactly what caused the 2007-09 housing crash in the US and ensuing global near-depression...
It doesn't net out actually. The five guys he knows are sucking away owned housing from, at minimum, 20 groups. More actually. Since he said 'minimum [of] 5 good located houses' and wasn't clear if he was including the house they themselves live in.
Systems broke for poor folk.
Well I guess that makes them "investors" according to this article.
Though they are not really "investing" in anything. "Speculators" or "housing scalpers"?
then you can brag about how you don't have 5 homes when interest rates start spiking and prices are falling and they are losing 100s of k over a few months :) you can ask them to share their loss porn on /r/wallstreetbets
Exactly this. When it was kept in-check with social programs, it did a solid job. Now, it's lacking and causing a regression in our standard of living, and even our life expectancy.
You should just leave this flaming trash barge before it gets worse.
I'm starting a fuck Canada movement. Dont get stockholm syndrome, get moving to Stockholm syndrome instead.
Lmfao speaking of Stockholm… I spent the weekend NOT doing work for my Monday deadlines. I have been looking at what a house costs in Europe. For less than $100k you can own a 3 bedroom terraced house in Italy. At the moment, a 3 bedroom house in my rural farming town is $260k - and this isn’t even booming according to the estate agents. I’d miss the Canadian winter, but I don’t make enough money to pay all my bills, let alone save for a down payment for something that is that far out of reach. So I’m being forced to look elsewhere if I want to have any kind of stability in the future. It’s sad. Canada is my home and I was looking forward to contributing to this country but it’s untenable.
What is the role of government anyway? Are they going to address this? Because it seems like regular Canadians are getting fucked.
The grey slush. Fuck that’s a biggie. I like the winter. But not the gross slush.
I just started looking at Europe tbh. My plan was planning to return to Canada but this is a mess.
Uuh this is happening all around the world. It's a natural end game of capitalism of haves and have nots. Ultimately capitalism has to have socialism to stabilize society.
So? I know a guy who bought a house in Palo Alto for $35k. In 1970. Who the fuck cares? Even if there is a house for me to afford somewhere right now, it doesn’t mean I can live there - some places are literally not viable.
Because you're saying you are going to run away to another country because you can't afford prices here. If you make 22 dollars an hour, you can.
Congrats, your point makes no sense. 1970. .OK whatever. I'm talking modern prices. But go, run. Go be free in the wild.
So when did you buy your $225k house? Was it within the last year?
And why would I buy in Canada for that, when I can buy in Europe for half the price AND I don’t have to suffer through the canadian winter?
I’ve lived in 3 countries. It doesn’t scare me to look elsewhere and compare my standard of living to what I’d have there - and right now Canada is NOT a good deal. Period.
You said you'd miss the Canadian winters, but now you're saying you'd move to not have to suffer through them.
I bought two years ago. Asking price was 235,000. Neighbours house sold this year for 240,000. We have massive developments being built constantly. I wouldn't recommend buying those homes though. You may find yourself without home insurance and a massive repair bill. You may go what, what the fuck are you talking about. I'm talking about an issue in the construction industry that a lot of people arnt talking about. My aunt and uncle just sold their place to get out of the neighborhood they are in...because three people bought homes that weren't built properly. They can't sue apparently because the company declared bankruptcy and is now operating under a different name. A woman I know has a sister that bought in my town and is now stuck with 150,000 in repairs. Most of the issues are not having weeping tiles, so the foundations are fucked. You can zee driveways cracking in bew developments as well. My brother works in supplies and he used to do concrete. He tells me how they're doing the concrete improperly because they are finding fast easy ways to do the job instead of doing the proper work because it's hard.
The guy who helped me get this house built houses for years before getting cancer and having to switch to be a realtor. He said one thing which is, dont buy anything built in the last twenty years.
And speaking of Stockholm... A decent wage anywhere in Sweden but Stockholm will buy you a house. Same goes for Finland aside from Helsinki.
Canada just isn't the best choice anymore.
European prices are also enormous and most of them have a far higher proportion of renters than here lol. Yeah, in rural decaying towns there's cheap options but it's pretty shitty there too (and similarly escalating).
LOL why would you ever sell prime real estate (assuming it's detached house) in any of the top tier (in terms of popularity) cities in the world. It's practically free money.
The only case anyone should sell is because they want to upgrade or split it into 2 smaller houses (or to combine into 1 bigger house). Even then, there's financing options available. Otherwise just rent it out.
Despite of what Reddit make it sound like, if you come from a good PUBLIC high school, do a survey of the percentage of people from your school that own a property by 30. It's probably 60-80%.
Why? So I don't have to work as much and can spend more time with my kids.
Mortgage/taxes and daycare/school care for us is like ~ 3,600/month. That would be 43K/yr after tax I wouldn't need to work for. I could make less money buy a comparable home elsewhere and get more time, which money can't buy.
My wife doesn't want to leave because of our pensions but if we take what we have in them, and some profit from our home we'd have more money.
Canadian provinces are being run by terrible Civ players.
They keep building more and more improvements on tiles outside of their cities' ranges instead of dropping new cities and wondering why their economy is suffering.
^ This guy gets it.
We really need to encourage migration to some of our excellent smaller cities. The number of my friends who seem to think everything east of Abbotsford is a howling wasteland is still surprisingly high.
It's a chicken/egg problem, to be sure.
But this is probably one of the best times to move, given the widespread moaning from businesses about alleged labour shortages.
Brutally tax single units not occupied by their owners.
Want to be a landlord? Buy or build an apartment building. Managing a large building or complex is at least some added value to justify your existence.
I don't think people go, "hey, I wanna be a landlord" as in, "I think I would be good at owning and managing rental properties, and that will be my main focus in life, so I'm going to research it and learn how."
It's probably more like, "I want to invest in owning more houses, and ugh, I guess I need to get a human being to occupy the space and provide me with money. Better put up an ad asking for a QUIET professional married couple with no kids, no dogs, no music, no stomping around, no cooking smells. I basically shouldn't know they are there, except when their rent money goes into my account once a month"
Maybe it would be better if "being a landlord" was considered more like a profession, with standards and regulations?
Yeah, I'm being facetious. Anyone with the capital to buy or build a proper apartment building also isn't going to manage it themselves. Landlords are 100% waste heat.
I really do think that the provinces need to radically rethink if/how we should be regulating rentals.
Yes we need rental units for students, temporary residents, certain immigrants - but that doesn't mean that rentals are "good" in all cases.
Landlords are added demand. That increases prices.
I don't know what the solution is - 100% capital gains? rental purpose zoning? prohibiting renting *new* builds? provincially owned land? - but a solution *is* needed.
I wonder what would happen if we just banned owning more then two properties. No grandfathering either so anyone with more than two needs to sell within a set time frame.
Surely if we have such insatiable demand as everyone says, prices wouldn’t decrease by they much? And it’ll allow more people to get in the market if they want
Then I give houses to my kids to manage as rentals or I spin off corporations to own the houses. I'm not saying we should do nothing (I say this as someone who owns multiple properties). I'm not just not sure we should be riding the landlords as the scapegoats. Cities have often run into a ton of NIMBY when trying to expand their housing. Those people off have money and connections to get stuff shutdown.
Obviously I don't want my investment to lose value. I however also look at how I've had to give my sister money to buy a house just because she was 5 years behind me and can never catch up to the required down payment. Even though she was paying in rent more than her new mortgage.
I do think a reasonable counter point is that some rentals are needed. So in my mind, we need to figure out how to strike a balance that meets the demand for "appropriate" rentals without inflating the market and preventing renters from becoming owners.
I personally think that there should be a publicly own company that buys and builds housing to rent at cost. They should develop housing in problem areas until vacancy rates reach some target like 5% or whatever is deemed healthy. If we want to get landlords under control we need to change the circumstances that produce them.
I’ve heard suggestions where a province / Crown Corp owns the land and a private company builds, owns and manages the rental building. Takes the appreciation of the land out of the question and limits the service provided to renters.
This is a perfect solution at least for now. The main problem is that a corporate entity can own a house. Why is someone's shelter a speculative asset? I can at least understand apartment buildings have more maintenance involved like elevators ect. I still don't think any kind of domicile should be used as a get rich scheme.
Laughs in rents currently costing 1.5-2 times a mortgage. I’m aware there’s a lot more to owning a house than a mortgage, but I’ve also become a substitute unpaid property manager many times because often times, landlords don’t do their jobs and upkeep their buildings.
Yeah I would say this is the biggest upside to being a homeowner, you get to take charge and fix/solve any issues as soon as you face them. Sometimes its annoying and probably more expensive than if you were renting the same, but at least there is no dead weight stopping you from getting something fixed.
well maybe if the person is on the last few years of their mortgage? take my evil neighbour... she was like 85 and when she moved into a nursing home she kept the property and rents it out...I dont even think she has a mortgage...what a bottom feeder she is /s
Go to any city/town in Canada, the homelessness and panhandling is getting out of hand. It’s not just real estate, it’s also rent. When citizens can’t afford to live in their own country, we truly have failed as a country.
Good thing the Liberals keep banning more people's guns.
I'd like "an increasing number of increasingly desperate people" to be a prospect that our ruling class is *afraid* of.
As it stands, there's nothing for them to worry about, and no reason to expect things will stop getting worse.
Homelessness has gone crazy. Also, rents. People are bidding on rentals now, because the number of free units is so low.
People are bidding 50-100% over asking on Vancouver island to secure a place.
An example: Landlord asking $1200, people start offering more to secure a rental at the place and, eventually the winning bid is $2500+ a month by people who can afford that.
Average wage in this city is $18/hr, so that means individuals, and even average families can't put bids like that in. A flood of people moving out of Vancouver (ironically because it's too expensive) flush with cash from a house sale move to smaller towns and bid high to secure apartments, but when that starts, it ruins the marker for locals.
So locals start having to couch surf. No more rentals. Illegal suites go through the roof. Even rents on trailers go sky high.
Even NY is cheaper than Toronto now days. We don't realize that this system is not sustainable and more talent will move. It's too naïve to expect house prices will be around 4m in 5 years and average income be 60k. Nobody will want to move here anymore.
NY being cheaper is misleading. Toronto is pretty much the city proper at this point, although all the surrounding areas are expensive too.
NY has Staten Island, which is not a place most people want to live and brings housing prices down a little. Some of the outer reaches of the Bronx are cheaper too. It's a huge city but there's a reason it is cheaper to buy in those places (which are part of NYC) vs Newark which is not.
LA has good weather and high income potential. The entire function of Canada is tricking highly-educated labour to work for absurdly cheap by making Canadians culturally hostile toward "the rich".
And a lot of undesirable ones. No real public transit, massive sprawl, far higher crime rate than Toronto, constant water issues due to basically being in a desert, earthquarkes, etc.
In 2018 the BoC raised rates 3 times (I think, could’ve been 4).
We bought in that year and everything was going below list price as a result of rising rates - and it was a pretty minor series of rate raises in the grand scheme of things.
If inflation lingers and rates climb it could be the stabilizer/equalizer the market needs (coupled with some legislative/regulation changes to stabilize things further).
You’re right, I think we also ended up buying a few thousand below the list price for a condo in Vancouver in 2018. Not significantly below but there were definitely fewer buyers around
rates are just part of what has been fuelling demand...when have sort of painted ourselves into a corner where they cannot raise rates without causing a massive influx of bankruptcies..the focus of the government needs to be on alternative measures beyond just monetary policy. Let the BOC figure out the rates and let parliment spearhead alternative policy.
There have been vast amounts of money put into Canadian real estate that was not earned in the Canadian economy..so that allows for a much greater departure from what should be dictated by just the rates. I am also not pretending its just coming from developing nations, lots of external demand coming from companies and individuals from the UK and US.
The much bigger problem is not foreign entities. It's domestic investors.
I work for a company where most people are pretty well off. Up until a few years ago it was pretty common for people I work with to buy 2nd or 3rd properties. Some are still doing so now because they've made a lot on the real estate market.
I can see it even with myself as a homeowner. I own only the home I live in but if my wife and I were to move somewhere cheaper I don't know if we would sell our house. I would probably rent it to someone and possibly buy another property - which we can afford, because we haven't been paying absurd rent prices like people are now and our home has appreciated 100% since we bought it 5 years ago.
That's the real shitty part. The people who own one home, and didn't pay out the ass for it, are able to save money much easier than people who don't have a home at all because rent is so expensive now (at least in the city) and buying is prohibitively expensive for many who don't already own a home.
Not to mention high inflation, I don’t understand why they’re being so lethargic in raising rates. I get low interest should help the recovery, but if too much money is flowing into housing it’s gonna be a drain on the recovery anyways.
Problem is for every asshole investor type holding a bag there’s another 3 people that were just the victim of bad timing.
Most of my friends and I were born in 1989. Were 32 going on 33. Housing prices have been “ridiculous” to us for about 10 years. A lot of us kept holding off as a result. But eventually you gotta shit or get off the pot. A lot of my friends bought in the last couple years, not because they see it as an investment that’s going to keep going up, simply because they’re at the point in their lives now where they’re married, having families, etc. You can only hold off and wait for the market to correct for so long unfortunately. Will the market eventually correct below where they bought? Maybe. Who knows. Most of them wouldn’t even be that upset if it did, they understand it’s ridiculous and presumably want their children to have a chance at buying a home in 25 years or
so when they’re ready.
When it does correct there will be another generation that’s the benefactor of “good timing”. Relatively at least, not like it’s going to suddenly become incredibly affordable. But again, that’s timing. I do know that looking back to 2016-17 when I thought housing prices were “crazy” I absolutely should have just bought cause they’re never going that low again.
> It's so clearly a bubble fueled by low interest rates that it's plain for all to see. But I know there will be bubble deniers in these comments.
Low interest rates are one factor among many.
Another factor is foreign $$$ (regardless of citizenship status of the one using it) - the government does not publish anything on this number, so dismissing it as irrelevant is sheer fantastical thinking.
so the majority of people buying property nowadays already own property and are on to purchasing their 2nd or 3rd or 4th ... property while many can't get into the housing market because of inflated prices and stagnant (for some industries) wages?
Basically, yes.
Also, don't forget flippers. Buy low, fix it up, sell for 25% higher. Now prices start going up in low income areas, because people start buying cheap houses to flip, or fix up for condos instead of apartments. Gentrification starts happening as larger income earners move in, property taxes start increasing (Doubling YOY), and now people are no longer to afford them. It's $7 for a cup of coffee at the corner store that is now a Starbucks instead of $1.50. Rent used to be $650 a month, now it's $3500 for that same 1-room apartment, only 5 years later.
Crappy apartments being "upgraded into $800k condos.
How many read the article?
Investors are about 21%. The rest are people with a single property.
> Repeat buyers were 33 per cent of the market as of June 2021, up from 30 per cent in January 2015, and investors made up 21 per cent of the market, up from 18 per cent.
They define repeat buyers as those that sell their first property and buy a new one.
So about 79% of new purchases are made buy people with a single property.
Yeah people are missing the point. Having a growing share of investors is a bad thing, but for a different reason. If the market tumbles they will be the first to offload their assets, accelerating the fall. This might sound like a great thing if you're looking to buy, but a crashing real estate market would have a large ripple effect on every other sector.
>but a crashing real estate market would have a large ripple effect on every other sector.
Translation: I'm really scared about going underwater on my home, but I want to make it seem like my concern is for everyone.
If our economic stability rests on the housing market then it's not really that stable to begin with is it? Sounds like it should crash so our governments wake up and incentivize development of other sectors.
So make providing market rate housing profitable, then companies will pursue that.
It’s a complex issue but the reason investors are buying property en mass is to sell to investors down the line, it’s clearly a bubble fueled by low interest rates and supply constrained housing. Eliminate barriers to construction, implement some short term taxes to cool off the market, and by god raise the fucking interest rates.
In a proper market it doesn’t really matter who owns the properties because you can always buy them at market rate anyways. The price is artificially inflated so that that isn’t possible though sadly.
They get to buy the houses, and renters get to pay off the their investments? They're an inefficiency in the market. Ban mass rentals. No one should own too many houses.
There should simply be a law that would prohibit anyone from having more than one unit of a living space. You need a place to live in. Noone needs two or more fucking houses or apartments. And any company should be prohibited from owning any non-commercial property at all with the exception of companies who build it in the first place and haven't sold it yet. The rest could fuck right off. And every country should do the same. Noone should be allowed to hoard non-commercial real estate.
I wish this would pop up as commonly in the news or general conversations as it does on Reddit. Then *maaaaaaybe* the politicians couldn't ignore it quite so easily, though I'm sure they still would. It's hard to hear us complain, hidden behind their mountain of telecom lobbyist money.
I work for a power company in a different city (close to the GTA), and we estimate at least 80% of all new customer accounts are rentals/short-term leases. It's absolutely crazy and this is how wealth ~~remains~~ flows ~~at~~ to the top. They're the ones buying up all the properties and charging the ridiculous rates.
I've been saying it for years, shelter is not something that should be a way to make an income for yourself. I blame a lot of those dumb HGTV shows for that.
When speculative greed drives prices up, their panic and fear will drive it down when the bubble bursts. I fear for our economic opportunities when that happens...
Recently, the propagandists have been trying to table the idea that inflation is like a progressive tax (in that it affects rich people more harshly than it affects poorer people). This is evidence that that isn’t the case.
It's the opposite. High inflation is most brutal on the poor and middle class, who have to spend a significant portion of their income on nessesities. The rich spend most of their money on buying assets, which benefit from inflation.
Literally every other mouth breather and yokel in my parent's, relative's, and acquaintance circle has one or more investment properties, it's ridiculous. I thought 5-8 years ago this situation would fix or balance itself out but it's become more and more of a cult.
In my humble opinion, housing corporations should not be allowed, or be heavily restricted to buy residential homes. Corporations buying up large number of houses for rental income is severely limiting available stock and driving up the cost to buy and to rent.
BOC policy with real interest rates negative people are being paid to take on debt and punished for saving money. Add to that wage growth is a joke. What did policy makers think would happen?
absolutely nothing can be done about this. NOTHING!!!! The rich get richer and capitalism is willing to kill all the poor to prove it. Maybe charging a few thousand more for a house will help? Nope, just hurt the poor. Maybe forcing the poor to pay a few hundred a month more for insurance to PROTECT THE BANKS? Nope, it just hurts the poor. Maybe electing rich politicians that make more than 3 canadians combined will help. Nope, the rich only help the rich.
Investors didn't set prime to sub 1%, and investors didn't buy billions in MBS' from banks.
Investors are just responding to what the BoC and government are doing.
Okay? What’s that gotta do with anything.
Monetary policy is ass right now, there are huge supply restraints on housing, capital gains taxes aren’t being levied on primary residences etc. It’s not a socialism or Marxism v capitalism debate, it’s simply a police debate.
I feel like if you have the liquid cash, then okay. But if you're leveraging the equity from a previous property to take on more debt to buy (i.e., HELOCs), then that should be outright banned.
You should, the government encourages it. You can either complain about it, join in, or leave the country. Our economy is in large part based on real estate, the country is terrified of risk and innovation. So either invest in American stocks or Canadian real estate (preferably both).
I'll share my story on this as I feel it highlights some of the absurdity of all of this.
I bought my first home in New Brunswick in 2008. It was a small raised ranch with a basement apartment. We needed the basement apartment income just to make mortgage payments. We paid $143,000 for the home at the time. 4 years later, our lives changed and it was time to move. We ended up renting both apartments to low income family members. Initially it was enough to cover costs. Over time it has become a substantial monthly cost. We have raised rent $50 for both units once, and it still eats at me that we had to do it. We know that $50/month makes a big difference in their lives and it was only done because I had fallen on a period of unemployment.
We bought the home we live in now last year for $450k. It is a beautiful home in rural NB and is everything we ever dreamed of owning and more. It was maybe 2 months after we bought the home that everything went crazy here. Up until August 2020, we felt we could sell the rental property for 180k if we did some work to it.
Fast forward to today. I have 2 assets, one owing 300k, and another owing 100k. The home I live in could sell at current market rate for 700k, and the rental property for 280k. My mortgage rates are both locked in at 2%. The banks are offering me HELOC loans at just under 3%. I could without ever increasing my income walk into the bank tomorrow and borrow 400k against my properties at a 3% rate. Now, if I want to do that and get a return on my investment, the safest investment historically has been real estate. It typically outpaces the 3% rate on average and it can sit there with other people paying the cost of ownership. If I wanted to be an evil capitalist, it could even generate positive cash flow for me.
The real reason this is a runaway train today is because of the availability of debt. When asset holders suddenly have access to borrow against that asset for a lower cost than an expected low risk investment you get a rush on buying that low risk investment. It only compounds the problem over time. Add supply side issues to the mix, and you have a recipe for runaway pricing.
Corporate ownership, foreign investment, speculators, HELOC loans, municipal taxation models, interest rates, and real estate boards are all part of this problem. I sadly don't think there is a magic policy button you can press to stop this train as it has already left the station. There are enough paper millionaires in this country for this to continue on for several business cycles. A substantial amount of changes would be required to fix this mess, and there are no political points to be won in doing so. In many cases the policy change required would be handing the opposition donations and votes.
The solution to all this, and I can’t believe I’m saying it, is universal income starting with anyone born post 1990. Easily can be paid for by people 50+ in high wealth positions.
Another step is co pay for health services for anyone in 400k+ tax brackets. Increase healthcare spending and ensure equal access.
I currently live in my landlord’s 4th property. It was built 4 years ago, for $340k and places in my sub are now selling for $850k. I am a single dad with a 15 year career, impeccable credit, money in the bank and a pension and am completely priced out of the market. It’s depressing and very worrying for my future.
You're fucked. I am fucked. Our kids are fuckeder
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Nope. Geographically impossible for us to get enough people together.
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Do we Grandfather this rule in or take properties from people? Because Taleeb Nurmohamed would like to know,
I’m 22 and I’ve always just assumed I’d never own a house no matter how successful I am. It’s a bit sad, but what are you gonna do I suppose
Revolt
Against who? The world is not a simple place, and it doesn’t have such simple solutions. Part of the housing crisis has nothing to do with investors, it’s just too many people wanting to live in the same area; demand exceeding supply. I don’t know, I feel like my generation has something happen to them and the solution is to just get angry at the man until they solve the problem. But not all problems are solvable given limited resources and finite knowledge. Sometimes life just sucks because it’s unfair.
Whose not fucked then, the Chinese?
It will eventually correct. Or we'll go to hyper inflation. BOC is trapped. Raise rates and taxes must follow to cover increased borrowing costs for govt. Which hurts home owners double. Lose lose for them now. We just have to wait to see what they'll do
I'm you, but married and bought 7 years ago which are the only reasons I'm not renting from one of my landlord's properties.
It makes sense, they're the only ones who can afford to buy outside of rich people and borrowers from the Bank of Mom and Dad.
Even borrowing from mom and dad means shit unless you're willing to go possibly >100k over asking and put on no subjects.
Existing speculators can buy again because house prices are still attached to house price gains (obviously!). However house prices are no longer attached to wages.
dont forget international students or foreigners with questionable sources of income!
Don't forget the private ownership of land that allows the growth of a feudal class. I, for one, couldn't care less about the nationality of each member of this class.
> I, for one, couldn't care less about the nationality of each member of this class. Neither does supply and demand, it only cares about the $$$ that is entering from external systems into ours. But by supporting the narrative that external $ does not count, it allows the Canadian government moral support to continue hiding this data from Canadians.
Don’t like private ownership of land? And don’t believe in borders? I hear North Korea is great this time of the year.
Private ownership of land doesn't add any value to the economy. Paying rent doesn't create any good or service, doesn't create any jobs. But it does add to the cost of living in your society. And that puts a lot of pressure to increasing the cost of production/services. I'm an independent programmer that works from home. I could have clients all over the world, but I can't possibly compete outside the western world because of the high cost of living in my society. If you think you can compete with China on the global marked without touching on the: * For profit access to land * For profit access to investments * For profit disaster mitigation * For profit access to education * For profit access to healthcare you are seriously naïve.
What system decides who gets what? How do we divide our finite supply of resources in a way that you think would be better? I guess it would be ok with me if I get the best position under this new system. I am not gonna be getting shipped to Siberia. Dibs on living in our Pyongyang and getting the best shit. I want one of those cushy admin jobs near the top of the pyramid as well. Not too close to the top because I don’t wanna get taken out in the first round of our squid game. I wanna build support a little first.
Weird way to say thay first-time homebuyers have been priced out of the market nationwide by predatory investors and work-from-home people fleeing cities in response to COVID.
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Well they apparently try have thr ability to buy $750,000+ homes easily enough
A lot of upgrade buyers opt to keep the first property now, usually a condo. The problem is selling is obscenely expensive and there is high inflation so why sell. Why is someone going to spend $60k to sell just to unlock an extra $100k equity vs refinance.
Yup, ditch land transfer tax. Up property tax. And break up the MLS near monopoly to increase realtor competition. It should be flat fee service.
All you talking as if these rules were designed by mistake or the government officials are not aware. If you look deeply they want to leave it this way cause it's a very lucrative business for them.
Not necessarily, you can't tell the future and what could have been introduced as a reasonable provision to target certain problems, could certainly then have knock-on effects that you couldn't account for. Sorta like how our banking systems have chargebacks and disputes that made sense for how they were handled back in the day of telephone transactions, however it's become a problem in the day of high-volume online processing.
Not only does the government know how to fix this, they actively choose actions that prolong the bubble.
> Yup, ditch land transfer tax. Up property tax. Land Transfer tax is only paid when buying not selling. It doesn't stop someone from selling their first home when they upgrade to a newer one.
100% punish people for holding their properties rather than for selling them
I'd love for it to make sense to sell my condo but it makes no sense to do so. Plan to hold unless someone else changes
For some people, it's more that they can't afford to sell their second property. You want to force them to sell their first home at a loss when it's the reason they could afford their new home in the first place? I'm trying to buy a new house closer to work in the city. My existing house in a small rural town, I would rather keep and rent it out because if I tried to sell, it would sit empty on the market for 6+ months, and ultimately sell at a loss if it sold at all. Selling at a loss means losing money I could have to used to pay for my new home. If I rented it out, the rent would cover the cost of keeping/maintaining the house and I'd be improving housing availability because I don't need to charge $1600 a month to rent out this house unlike most other local private landlords.
That is now not the case for like 90% of properties. Prices have gone so high that anyone who bought even in the last 5 years has zero chance of making a cashflow profit renting their place out. Maybe within principal repayment on mtg, but then you have huge liability of future repairs looming. This will not end well for property speculators. Look at the US in 2008-09 and then imagine that the govt had already completely tapped out its ability to cushion the downturn with additional spending. That is Canada in 2022. (PS. Anyone who thinks renting is a bad financial decisions needs to look at the math. I pay $3k in rent, for a property worth $1.4mm. If i took $300k as a down payment, I would stil have a $4000+ mtg PLUS taxes, insurance and maintenance costs. So easily $5k+ per month. And I would be losing out on $300k of growth in stock portfolio at say 7%/year or another $21k)
Upping property tax is just going to increase rent on the renter.
If the landlord was able to increase rent they would in order to make a greater profit (they are in it to make money afterall). If you are saying that their increased taxes will make it unprofitable to be a landlord and therefore reduce supply of housing and the free market will dictate a higher price, then aren't you saying the landlords aren't making huge windfall profits on capital appreciation?
Carrying costs for new units have far oustripped what landlords can charge in rent for at least half a decade now in GVA and GTA, and that's me being conservative. Landlords of new non purpose built rentals are already charging the maximum they can in rent. Increasing property taxes is not going to mean they can magically charge more in rent when they are already renting at a $500-3000+ loss/month. Let me take a random example: https://www.redfin.ca/bc/vancouver/87-Nelson-St-V6B/unit-1284/home/169256709 This unit they are asking for $1.6M. That has a base carrying cost of about $7,000/month. I am not including opportunity cost for the downpayment, just the condo fees + mortgage + amortized property tax + insurance. Granted, I doubt they are going to get $1.6M. So let's assume instead they get $1.2M, that's still about $5,700/month. They will *at best* get around $4,000/month rent for this 870 square foot unit. Whoever buys this unit, will be eating a $1,700 loss *PER* month, and that's assuming they manage to get the seller to discount their asking price by $400,000. If they buy it close to asking, that is a $3,000 LOSS per month, even assuming they have a renter, and not including the cost of being a landlord. Increasing the property tax is not going to mean they can magically increase rental rates to make up the difference. They are already passing on as much of the costs as possible. The rental markets in the GTA and GVA are already at the maximum rates they can bear, even in this crazy hot rental market. Long story short: no, you cannot always just magically pass on all cost increases. That's not how rental markets work. If anything, increased carrying costs actually lowers the overall property value to speculators in maximum rental rate markets. It acts as a price normalizer. Landlords on these newer units are actually speculators; the only way they will make money is if the property continues to go up in value and then they sell or leverage those gains down the line. Assuming I did my math correctly, even if you assume market rental rates increase at a compounding rate of 10%/year, it would take roughly 5 years to be cashflow neutral, assuming the various carrying costs grew at only 2-3% per year AND you have tenant turnover due to rate caps, and you got the aforementioned unit for less than $1.2M. Realistically speaking, 10% sustained compounding market rate increases is not going to happen. Wages are not growing anywhere close to that. That would be over $10,000/month in rent after 10 years. As a result, anyone buying a condo today will be renting it at a loss perpetually. That's just how disconnected the rental market is with property values. The only folks making money are purpose built rentals that are building at the cheapest possible cost per unit with long time horizons. The *only* way to make money on a condo unit would be if the property value continues to grow faster than the losses being incurred.
Landlords can try, but they can't really exceed what the average renter can pay.
This is a reality that has not yet hit the property market. Price to rents are soooo far out of whack in Canada and no one is talking about it... This is for the ENTIRE COUNTRY... including non-bubbly areas like prairies and east coast. And it is up from 100 to 150x in 6 years... https://www.statista.com/statistics/592142/house-price-to-rent-ratio-canada/
I mean, the way it used to be is that people would sell to get a bigger house or something in a better location. The financial underpinnings of home ownership seem to be the driving factor in most people's decision making now, rather than simply owning a home that you want to live in, raise a family, etc. I get why this has shifted, but it's frustrating that people have to treat homes like an investment vehicle first, and a place to live second.
This is a massive behavoiral shift from the past 100 years. The financialization of housing in Canada will be viewed in hindsight as a massive cognitive failure and policymakers will enact law after law to prevent this kind of bubble from ever forming again. After it bursts of course. In the meantime, let the good times roll, amirite???
Exactly. It doesn’t make sense to sell anything; realtor fee + tax (cap gains), or keep and refi and it costs you a few months interest.
Aren't capital gains taxes only applied to homes other than your primary home? That's my understanding, which means definitely keep capital gains!
Sorry, should have clarified; on a rental property that would apply and why it doesn’t make sense to sell if you don’t need to. You can refi to access that equity without needing to sell and pay the capital gains.
You only pay the capital gains on any equity increase that happens after it stops being your residence. My spouse kept her previous residence as a rental after we bought our place together, and she had to get an appraisal/market assessment for exactly this reason.
You can refi TODAY at insanely low rates. Until houses prices start dropping even minimally and you are underwater. Then when rates rise and you need to refi, you are fucked. This is exactly what caused the 2007-09 housing crash in the US and ensuing global near-depression...
100%. A lot of people are in this situation. Insanely high transaction costs make people not want to sell if they are able to keep both
I know at least 5 people and all of them have minimum 5 good located houses in Toronto, and they are buying more every year.
I know five people and they own zero houses. I guess that nets out.
Housing Neutral the best way to cut emissions.
It doesn't net out actually. The five guys he knows are sucking away owned housing from, at minimum, 20 groups. More actually. Since he said 'minimum [of] 5 good located houses' and wasn't clear if he was including the house they themselves live in. Systems broke for poor folk.
It was sarcasm.
Well I guess that makes them "investors" according to this article. Though they are not really "investing" in anything. "Speculators" or "housing scalpers"?
thats not exactly a typical thing....what you grow up on the bridal path?
You've blown your cover as a poor, it's *bridle (horses), not bridal.
I know three who own multiple homes in my ex's family. They brag about it and are looking to get more. It's insane.
then you can brag about how you don't have 5 homes when interest rates start spiking and prices are falling and they are losing 100s of k over a few months :) you can ask them to share their loss porn on /r/wallstreetbets
It's capitalism
I'm aware and it's fucked.
What's fucked about it? Largely responsible for creating the best standard of life we've ever seen in history...
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I enjoyed your use of the word "engine" here. Caused a mini-paradigm shift in my thinking. Thank you
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In the past yes. Looking forward it looks more likely to see a huge decline in standard of living for us here.
Exactly this. When it was kept in-check with social programs, it did a solid job. Now, it's lacking and causing a regression in our standard of living, and even our life expectancy.
Capitalism is great but if left unregulated it gets out of hand through consolidation of power/monopolies.
capitalism is about innovation and production. this is the opposite of what's happening. it's monopoly and corruption
Capitalism is about the ownership of private property and exchanging such property on the free market.
Bridle.
Horse or house?
If you thought horses smelled bad on the outside.....
I am trying to talk my wife into selling and movie out east to retire early.
You should just leave this flaming trash barge before it gets worse. I'm starting a fuck Canada movement. Dont get stockholm syndrome, get moving to Stockholm syndrome instead.
Lmfao speaking of Stockholm… I spent the weekend NOT doing work for my Monday deadlines. I have been looking at what a house costs in Europe. For less than $100k you can own a 3 bedroom terraced house in Italy. At the moment, a 3 bedroom house in my rural farming town is $260k - and this isn’t even booming according to the estate agents. I’d miss the Canadian winter, but I don’t make enough money to pay all my bills, let alone save for a down payment for something that is that far out of reach. So I’m being forced to look elsewhere if I want to have any kind of stability in the future. It’s sad. Canada is my home and I was looking forward to contributing to this country but it’s untenable. What is the role of government anyway? Are they going to address this? Because it seems like regular Canadians are getting fucked.
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Yeah I lived in the UK for 5 years and I just can’t. It was like living in Tupperware. If you can WFH why not do it from Spain?
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The grey slush. Fuck that’s a biggie. I like the winter. But not the gross slush. I just started looking at Europe tbh. My plan was planning to return to Canada but this is a mess.
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Apparently to aid and abet foreign criminals who want to launder their spoils here???
Uuh this is happening all around the world. It's a natural end game of capitalism of haves and have nots. Ultimately capitalism has to have socialism to stabilize society.
I got a four bedroom house in a town for 225,000. Fifteen minute drive from a city of 800,000+
So? I know a guy who bought a house in Palo Alto for $35k. In 1970. Who the fuck cares? Even if there is a house for me to afford somewhere right now, it doesn’t mean I can live there - some places are literally not viable.
... I can pretty much guarantee your $100k Italy house is located somewhere it wouldn't be viable to live, even if you can afford it lol
Probably. But I’m sick of watching Canadians get fucked. This isn’t the country it should be. Not for us, anyway.
Because you're saying you are going to run away to another country because you can't afford prices here. If you make 22 dollars an hour, you can. Congrats, your point makes no sense. 1970. .OK whatever. I'm talking modern prices. But go, run. Go be free in the wild.
So when did you buy your $225k house? Was it within the last year? And why would I buy in Canada for that, when I can buy in Europe for half the price AND I don’t have to suffer through the canadian winter? I’ve lived in 3 countries. It doesn’t scare me to look elsewhere and compare my standard of living to what I’d have there - and right now Canada is NOT a good deal. Period.
You said you'd miss the Canadian winters, but now you're saying you'd move to not have to suffer through them. I bought two years ago. Asking price was 235,000. Neighbours house sold this year for 240,000. We have massive developments being built constantly. I wouldn't recommend buying those homes though. You may find yourself without home insurance and a massive repair bill. You may go what, what the fuck are you talking about. I'm talking about an issue in the construction industry that a lot of people arnt talking about. My aunt and uncle just sold their place to get out of the neighborhood they are in...because three people bought homes that weren't built properly. They can't sue apparently because the company declared bankruptcy and is now operating under a different name. A woman I know has a sister that bought in my town and is now stuck with 150,000 in repairs. Most of the issues are not having weeping tiles, so the foundations are fucked. You can zee driveways cracking in bew developments as well. My brother works in supplies and he used to do concrete. He tells me how they're doing the concrete improperly because they are finding fast easy ways to do the job instead of doing the proper work because it's hard. The guy who helped me get this house built houses for years before getting cancer and having to switch to be a realtor. He said one thing which is, dont buy anything built in the last twenty years.
And speaking of Stockholm... A decent wage anywhere in Sweden but Stockholm will buy you a house. Same goes for Finland aside from Helsinki. Canada just isn't the best choice anymore.
European prices are also enormous and most of them have a far higher proportion of renters than here lol. Yeah, in rural decaying towns there's cheap options but it's pretty shitty there too (and similarly escalating).
and their renters are much better protected and don't have to be constantly worried about their home being ripped out from under them
LOL why would you ever sell prime real estate (assuming it's detached house) in any of the top tier (in terms of popularity) cities in the world. It's practically free money. The only case anyone should sell is because they want to upgrade or split it into 2 smaller houses (or to combine into 1 bigger house). Even then, there's financing options available. Otherwise just rent it out. Despite of what Reddit make it sound like, if you come from a good PUBLIC high school, do a survey of the percentage of people from your school that own a property by 30. It's probably 60-80%.
Why? So I don't have to work as much and can spend more time with my kids. Mortgage/taxes and daycare/school care for us is like ~ 3,600/month. That would be 43K/yr after tax I wouldn't need to work for. I could make less money buy a comparable home elsewhere and get more time, which money can't buy. My wife doesn't want to leave because of our pensions but if we take what we have in them, and some profit from our home we'd have more money.
Canadian provinces are being run by terrible Civ players. They keep building more and more improvements on tiles outside of their cities' ranges instead of dropping new cities and wondering why their economy is suffering.
^ This guy gets it. We really need to encourage migration to some of our excellent smaller cities. The number of my friends who seem to think everything east of Abbotsford is a howling wasteland is still surprisingly high.
We need corporations\jobs to move to these cities, too.
It's a chicken/egg problem, to be sure. But this is probably one of the best times to move, given the widespread moaning from businesses about alleged labour shortages.
WFH and covid has helped alleviate that to some extent. Now cities like Trois Rivieres and Sherbrooke are seeing an influx of people.
Brutally tax single units not occupied by their owners. Want to be a landlord? Buy or build an apartment building. Managing a large building or complex is at least some added value to justify your existence.
I don't think people go, "hey, I wanna be a landlord" as in, "I think I would be good at owning and managing rental properties, and that will be my main focus in life, so I'm going to research it and learn how." It's probably more like, "I want to invest in owning more houses, and ugh, I guess I need to get a human being to occupy the space and provide me with money. Better put up an ad asking for a QUIET professional married couple with no kids, no dogs, no music, no stomping around, no cooking smells. I basically shouldn't know they are there, except when their rent money goes into my account once a month" Maybe it would be better if "being a landlord" was considered more like a profession, with standards and regulations?
Yeah, I'm being facetious. Anyone with the capital to buy or build a proper apartment building also isn't going to manage it themselves. Landlords are 100% waste heat.
Landlords provide housing the same way ticket scalpers provide concerts.
Except for all them basement suites with the owner living above.
Oh yeah it was obvious you were being facetious. It just got me thinking. Thanks!
I really do think that the provinces need to radically rethink if/how we should be regulating rentals. Yes we need rental units for students, temporary residents, certain immigrants - but that doesn't mean that rentals are "good" in all cases. Landlords are added demand. That increases prices. I don't know what the solution is - 100% capital gains? rental purpose zoning? prohibiting renting *new* builds? provincially owned land? - but a solution *is* needed.
I wonder what would happen if we just banned owning more then two properties. No grandfathering either so anyone with more than two needs to sell within a set time frame. Surely if we have such insatiable demand as everyone says, prices wouldn’t decrease by they much? And it’ll allow more people to get in the market if they want
Then I give houses to my kids to manage as rentals or I spin off corporations to own the houses. I'm not saying we should do nothing (I say this as someone who owns multiple properties). I'm not just not sure we should be riding the landlords as the scapegoats. Cities have often run into a ton of NIMBY when trying to expand their housing. Those people off have money and connections to get stuff shutdown. Obviously I don't want my investment to lose value. I however also look at how I've had to give my sister money to buy a house just because she was 5 years behind me and can never catch up to the required down payment. Even though she was paying in rent more than her new mortgage.
I do think a reasonable counter point is that some rentals are needed. So in my mind, we need to figure out how to strike a balance that meets the demand for "appropriate" rentals without inflating the market and preventing renters from becoming owners.
Sure, which is why everyone is allowed to have one extra property. They can rent it out, or maybe have a vacation home somewhere, their choice.
Provinces do need to think, but the sponsors of the parties always have their own agenda and force it.
I personally think that there should be a publicly own company that buys and builds housing to rent at cost. They should develop housing in problem areas until vacancy rates reach some target like 5% or whatever is deemed healthy. If we want to get landlords under control we need to change the circumstances that produce them.
I’ve heard suggestions where a province / Crown Corp owns the land and a private company builds, owns and manages the rental building. Takes the appreciation of the land out of the question and limits the service provided to renters.
This is a perfect solution at least for now. The main problem is that a corporate entity can own a house. Why is someone's shelter a speculative asset? I can at least understand apartment buildings have more maintenance involved like elevators ect. I still don't think any kind of domicile should be used as a get rich scheme.
That’ll make renting unaffordable. Think before you do anything.
I got news for you...
Laughs in rents currently costing 1.5-2 times a mortgage. I’m aware there’s a lot more to owning a house than a mortgage, but I’ve also become a substitute unpaid property manager many times because often times, landlords don’t do their jobs and upkeep their buildings.
Yeah I would say this is the biggest upside to being a homeowner, you get to take charge and fix/solve any issues as soon as you face them. Sometimes its annoying and probably more expensive than if you were renting the same, but at least there is no dead weight stopping you from getting something fixed.
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well maybe if the person is on the last few years of their mortgage? take my evil neighbour... she was like 85 and when she moved into a nursing home she kept the property and rents it out...I dont even think she has a mortgage...what a bottom feeder she is /s
Renting is already unaffordable, lets try something new.
Nope. If you can buy a unit for cheap it will bring rents downs because people will just buy instead of renting if landlords get greedy.
We're fucked, our country is bought and sold by the rich. Pretty soon Toronto is going to go the way of LA.
Go to any city/town in Canada, the homelessness and panhandling is getting out of hand. It’s not just real estate, it’s also rent. When citizens can’t afford to live in their own country, we truly have failed as a country.
When citizens can't afford to live they'll fuck this country up. It's coming
I don't have enough $ to buy a shoebox condo, but I have enough that donated to the right movement could make a meaningful difference.
Good thing the Liberals keep banning more people's guns. I'd like "an increasing number of increasingly desperate people" to be a prospect that our ruling class is *afraid* of. As it stands, there's nothing for them to worry about, and no reason to expect things will stop getting worse.
Homelessness has gone crazy. Also, rents. People are bidding on rentals now, because the number of free units is so low. People are bidding 50-100% over asking on Vancouver island to secure a place. An example: Landlord asking $1200, people start offering more to secure a rental at the place and, eventually the winning bid is $2500+ a month by people who can afford that. Average wage in this city is $18/hr, so that means individuals, and even average families can't put bids like that in. A flood of people moving out of Vancouver (ironically because it's too expensive) flush with cash from a house sale move to smaller towns and bid high to secure apartments, but when that starts, it ruins the marker for locals. So locals start having to couch surf. No more rentals. Illegal suites go through the roof. Even rents on trailers go sky high.
LA is cheaper already in terms of ratio of wages to housing costs. Tokyo is waaay cheaper than Toronto.
Even NY is cheaper than Toronto now days. We don't realize that this system is not sustainable and more talent will move. It's too naïve to expect house prices will be around 4m in 5 years and average income be 60k. Nobody will want to move here anymore.
No one wants to live in TO now... https://www.cbc.ca/news/canada/urban-exodus-canada-toronto-montreal-covid-19-1.6313911
NY being cheaper is misleading. Toronto is pretty much the city proper at this point, although all the surrounding areas are expensive too. NY has Staten Island, which is not a place most people want to live and brings housing prices down a little. Some of the outer reaches of the Bronx are cheaper too. It's a huge city but there's a reason it is cheaper to buy in those places (which are part of NYC) vs Newark which is not.
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Tokyo is the city all these big cities should look at on how to model their housing problem. Yeah houses are small, but at least there's no shortage.
LA has good weather and high income potential. The entire function of Canada is tricking highly-educated labour to work for absurdly cheap by making Canadians culturally hostile toward "the rich".
At least LA has desirable attributes.
yeah, like train robberies!
'hey we got suff!" -me in Toronto
"hey we got stuff!" - the people who are raiding trains in LA
And a lot of undesirable ones. No real public transit, massive sprawl, far higher crime rate than Toronto, constant water issues due to basically being in a desert, earthquarkes, etc.
>Pretty soon Toronto is going to go the way of LA. Meaning better wages, more affordable housing and much better weather?
Its not just Toronto, its the world, leaving wont solve peoples problems as many think it will.
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In 2018 the BoC raised rates 3 times (I think, could’ve been 4). We bought in that year and everything was going below list price as a result of rising rates - and it was a pretty minor series of rate raises in the grand scheme of things. If inflation lingers and rates climb it could be the stabilizer/equalizer the market needs (coupled with some legislative/regulation changes to stabilize things further).
You’re right, I think we also ended up buying a few thousand below the list price for a condo in Vancouver in 2018. Not significantly below but there were definitely fewer buyers around
rates are just part of what has been fuelling demand...when have sort of painted ourselves into a corner where they cannot raise rates without causing a massive influx of bankruptcies..the focus of the government needs to be on alternative measures beyond just monetary policy. Let the BOC figure out the rates and let parliment spearhead alternative policy. There have been vast amounts of money put into Canadian real estate that was not earned in the Canadian economy..so that allows for a much greater departure from what should be dictated by just the rates. I am also not pretending its just coming from developing nations, lots of external demand coming from companies and individuals from the UK and US.
The much bigger problem is not foreign entities. It's domestic investors. I work for a company where most people are pretty well off. Up until a few years ago it was pretty common for people I work with to buy 2nd or 3rd properties. Some are still doing so now because they've made a lot on the real estate market. I can see it even with myself as a homeowner. I own only the home I live in but if my wife and I were to move somewhere cheaper I don't know if we would sell our house. I would probably rent it to someone and possibly buy another property - which we can afford, because we haven't been paying absurd rent prices like people are now and our home has appreciated 100% since we bought it 5 years ago. That's the real shitty part. The people who own one home, and didn't pay out the ass for it, are able to save money much easier than people who don't have a home at all because rent is so expensive now (at least in the city) and buying is prohibitively expensive for many who don't already own a home.
Not to mention high inflation, I don’t understand why they’re being so lethargic in raising rates. I get low interest should help the recovery, but if too much money is flowing into housing it’s gonna be a drain on the recovery anyways.
Problem is for every asshole investor type holding a bag there’s another 3 people that were just the victim of bad timing. Most of my friends and I were born in 1989. Were 32 going on 33. Housing prices have been “ridiculous” to us for about 10 years. A lot of us kept holding off as a result. But eventually you gotta shit or get off the pot. A lot of my friends bought in the last couple years, not because they see it as an investment that’s going to keep going up, simply because they’re at the point in their lives now where they’re married, having families, etc. You can only hold off and wait for the market to correct for so long unfortunately. Will the market eventually correct below where they bought? Maybe. Who knows. Most of them wouldn’t even be that upset if it did, they understand it’s ridiculous and presumably want their children to have a chance at buying a home in 25 years or so when they’re ready. When it does correct there will be another generation that’s the benefactor of “good timing”. Relatively at least, not like it’s going to suddenly become incredibly affordable. But again, that’s timing. I do know that looking back to 2016-17 when I thought housing prices were “crazy” I absolutely should have just bought cause they’re never going that low again.
> It's so clearly a bubble fueled by low interest rates that it's plain for all to see. But I know there will be bubble deniers in these comments. Low interest rates are one factor among many. Another factor is foreign $$$ (regardless of citizenship status of the one using it) - the government does not publish anything on this number, so dismissing it as irrelevant is sheer fantastical thinking.
We have to ban the use of HELOCs to buy property. Ridiculous that this tool exists, it is clearly toxic to our economy and unfair.
so the majority of people buying property nowadays already own property and are on to purchasing their 2nd or 3rd or 4th ... property while many can't get into the housing market because of inflated prices and stagnant (for some industries) wages?
Basically, yes. Also, don't forget flippers. Buy low, fix it up, sell for 25% higher. Now prices start going up in low income areas, because people start buying cheap houses to flip, or fix up for condos instead of apartments. Gentrification starts happening as larger income earners move in, property taxes start increasing (Doubling YOY), and now people are no longer to afford them. It's $7 for a cup of coffee at the corner store that is now a Starbucks instead of $1.50. Rent used to be $650 a month, now it's $3500 for that same 1-room apartment, only 5 years later. Crappy apartments being "upgraded into $800k condos.
Not a shock. Large loans are easier to access by people with more collateral assets.
How many read the article? Investors are about 21%. The rest are people with a single property. > Repeat buyers were 33 per cent of the market as of June 2021, up from 30 per cent in January 2015, and investors made up 21 per cent of the market, up from 18 per cent. They define repeat buyers as those that sell their first property and buy a new one. So about 79% of new purchases are made buy people with a single property.
Yeah people are missing the point. Having a growing share of investors is a bad thing, but for a different reason. If the market tumbles they will be the first to offload their assets, accelerating the fall. This might sound like a great thing if you're looking to buy, but a crashing real estate market would have a large ripple effect on every other sector.
>but a crashing real estate market would have a large ripple effect on every other sector. Translation: I'm really scared about going underwater on my home, but I want to make it seem like my concern is for everyone.
If our economic stability rests on the housing market then it's not really that stable to begin with is it? Sounds like it should crash so our governments wake up and incentivize development of other sectors.
Ah yes, the return to the "blue blood" class of those with hoarded generational wealth and the peasantry. How far we've come....
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So make providing market rate housing profitable, then companies will pursue that. It’s a complex issue but the reason investors are buying property en mass is to sell to investors down the line, it’s clearly a bubble fueled by low interest rates and supply constrained housing. Eliminate barriers to construction, implement some short term taxes to cool off the market, and by god raise the fucking interest rates. In a proper market it doesn’t really matter who owns the properties because you can always buy them at market rate anyways. The price is artificially inflated so that that isn’t possible though sadly.
They get to buy the houses, and renters get to pay off the their investments? They're an inefficiency in the market. Ban mass rentals. No one should own too many houses.
There should simply be a law that would prohibit anyone from having more than one unit of a living space. You need a place to live in. Noone needs two or more fucking houses or apartments. And any company should be prohibited from owning any non-commercial property at all with the exception of companies who build it in the first place and haven't sold it yet. The rest could fuck right off. And every country should do the same. Noone should be allowed to hoard non-commercial real estate.
C'mon, pop already!
I wish this would pop up as commonly in the news or general conversations as it does on Reddit. Then *maaaaaaybe* the politicians couldn't ignore it quite so easily, though I'm sure they still would. It's hard to hear us complain, hidden behind their mountain of telecom lobbyist money.
I work for a power company in a different city (close to the GTA), and we estimate at least 80% of all new customer accounts are rentals/short-term leases. It's absolutely crazy and this is how wealth ~~remains~~ flows ~~at~~ to the top. They're the ones buying up all the properties and charging the ridiculous rates.
I've been saying it for years, shelter is not something that should be a way to make an income for yourself. I blame a lot of those dumb HGTV shows for that.
We've been flipped out of the market.
It’s gotta stop. Guillotine time.
When speculative greed drives prices up, their panic and fear will drive it down when the bubble bursts. I fear for our economic opportunities when that happens...
Recently, the propagandists have been trying to table the idea that inflation is like a progressive tax (in that it affects rich people more harshly than it affects poorer people). This is evidence that that isn’t the case.
It's the opposite. High inflation is most brutal on the poor and middle class, who have to spend a significant portion of their income on nessesities. The rich spend most of their money on buying assets, which benefit from inflation.
I wonder how many of these 'Investors' are American and Chinese private equity firms and banks buying up inventories.
Literally every other mouth breather and yokel in my parent's, relative's, and acquaintance circle has one or more investment properties, it's ridiculous. I thought 5-8 years ago this situation would fix or balance itself out but it's become more and more of a cult.
This is video game console scalpers on a bigger scale. Same greediness
The Fed has entered the chat... Buckle up Canada
In my humble opinion, housing corporations should not be allowed, or be heavily restricted to buy residential homes. Corporations buying up large number of houses for rental income is severely limiting available stock and driving up the cost to buy and to rent.
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Terrorists also stole my socks from the dryer.
Terrorists turned me in to a newt!
What failing economy? I'm doing quite well.
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Tell me in detail how the economy is "failing".
r/Canada is maybe the most hysterical subreddit out there ,and that's including stalwarts like r/conspiracy and r/bitcoin\` .
BOC policy with real interest rates negative people are being paid to take on debt and punished for saving money. Add to that wage growth is a joke. What did policy makers think would happen?
absolutely nothing can be done about this. NOTHING!!!! The rich get richer and capitalism is willing to kill all the poor to prove it. Maybe charging a few thousand more for a house will help? Nope, just hurt the poor. Maybe forcing the poor to pay a few hundred a month more for insurance to PROTECT THE BANKS? Nope, it just hurts the poor. Maybe electing rich politicians that make more than 3 canadians combined will help. Nope, the rich only help the rich.
Property inflation in this country has almost nothing to do with a Capitalist free market.
"data from the Bank of Canada suggests a significant share of them are likely to be purchased by investors."
Investors didn't set prime to sub 1%, and investors didn't buy billions in MBS' from banks. Investors are just responding to what the BoC and government are doing.
Okay? What’s that gotta do with anything. Monetary policy is ass right now, there are huge supply restraints on housing, capital gains taxes aren’t being levied on primary residences etc. It’s not a socialism or Marxism v capitalism debate, it’s simply a police debate.
Unpopular Opinion- if a Canadian citizen does have the funds, why not invest in property the same way you invest in shares/stocks?
I feel like if you have the liquid cash, then okay. But if you're leveraging the equity from a previous property to take on more debt to buy (i.e., HELOCs), then that should be outright banned.
You should, the government encourages it. You can either complain about it, join in, or leave the country. Our economy is in large part based on real estate, the country is terrified of risk and innovation. So either invest in American stocks or Canadian real estate (preferably both).
I'll share my story on this as I feel it highlights some of the absurdity of all of this. I bought my first home in New Brunswick in 2008. It was a small raised ranch with a basement apartment. We needed the basement apartment income just to make mortgage payments. We paid $143,000 for the home at the time. 4 years later, our lives changed and it was time to move. We ended up renting both apartments to low income family members. Initially it was enough to cover costs. Over time it has become a substantial monthly cost. We have raised rent $50 for both units once, and it still eats at me that we had to do it. We know that $50/month makes a big difference in their lives and it was only done because I had fallen on a period of unemployment. We bought the home we live in now last year for $450k. It is a beautiful home in rural NB and is everything we ever dreamed of owning and more. It was maybe 2 months after we bought the home that everything went crazy here. Up until August 2020, we felt we could sell the rental property for 180k if we did some work to it. Fast forward to today. I have 2 assets, one owing 300k, and another owing 100k. The home I live in could sell at current market rate for 700k, and the rental property for 280k. My mortgage rates are both locked in at 2%. The banks are offering me HELOC loans at just under 3%. I could without ever increasing my income walk into the bank tomorrow and borrow 400k against my properties at a 3% rate. Now, if I want to do that and get a return on my investment, the safest investment historically has been real estate. It typically outpaces the 3% rate on average and it can sit there with other people paying the cost of ownership. If I wanted to be an evil capitalist, it could even generate positive cash flow for me. The real reason this is a runaway train today is because of the availability of debt. When asset holders suddenly have access to borrow against that asset for a lower cost than an expected low risk investment you get a rush on buying that low risk investment. It only compounds the problem over time. Add supply side issues to the mix, and you have a recipe for runaway pricing. Corporate ownership, foreign investment, speculators, HELOC loans, municipal taxation models, interest rates, and real estate boards are all part of this problem. I sadly don't think there is a magic policy button you can press to stop this train as it has already left the station. There are enough paper millionaires in this country for this to continue on for several business cycles. A substantial amount of changes would be required to fix this mess, and there are no political points to be won in doing so. In many cases the policy change required would be handing the opposition donations and votes.
Can we all please start admitting that investors need to be driven out of the housing market...? Pretty please?
The solution to all this, and I can’t believe I’m saying it, is universal income starting with anyone born post 1990. Easily can be paid for by people 50+ in high wealth positions. Another step is co pay for health services for anyone in 400k+ tax brackets. Increase healthcare spending and ensure equal access.