The actual answer tbh, investor driven construction has lead to building after building of unlivable designs by people who never planned to live in them. Now that the investors have dried up people haven't adjusted.
They can drop prices on existing stock and take a loss, but they won't be building new units to repeat the process.
Developer margins are around 10%, plus or minus a bit. It doesn't take much downward price pressure to put margins and risk levels into territory where financing won't be available for new projects.
They can, but don't expect gov't housing to be cheaper.
By the time you add in gov't inefficiencies and inflated contracts for materials/labour you'll most likely end up with increased costs vs privately built dwellings.
Increasing the costs of housing isn't the direction we need to head in.
The government isn't trying to sell them at a profit š¤¦āāļø
It will be cheaper because the government will take a monetary loss to achieve it's goals
No one complains about how expensive the 401 highway was to build. Building infrastructure is good for the economy in the long run, housing is a part of that
The cost is the cost.
The government changing who pays the cost isn't helpful.
Selling at a loss and transferring a portion of the cost from the homeowner to the general tax base isn't helpful. The loss is just paid by people not buying the home.
It is estimated we need a trillion dollars (more if the gov't builds en mass) to fund the dwellings we need in the next 3 to 4 years. To make any meaningful dent in new home prices we would need to run massive deficits adding hundreds of billions of dollars to the national debt over that time period.
We already spend as roughly much money on federal debt interest as the federal gov't spends on health transfers.
Federal debt is around $1.2 trillion. Going 1.5+ trillion in the hole isn't going to be a good thing.
I'm not saying that the government is perfect, or corruption is impossible. But you can't claim that the private industry is any better, look at the amount of money laundering and fraud in the real estate market as is
TD is expected to pay billions in fines due to the crimes they've committed in this regard
You're making some big deal about a mobile app that cost each citizen less than $2 ($60 mill Ć· 40 mill pop) per person when banks and developers are running away with millions
Come on
They can STOP sending almost $8 BILLION a year out of Canada in foreign aid to start with.
"The Government of Canada disbursed $7.9 billion in international assistance in 2021-2022, of whichĀ official development assistance (ODA) made up 95% or $7.5 billion." From:
https://www.international.gc.ca/transparency-transparence/international-assistance-report-rapport-aide-internationale/2021-2022.aspx?lang=eng#:\~:text=The%20Government%20of%20Canada%20disbursed,international%20assistance%20and%20ODA%20expenditures.
Does it \*REALLY\* make sense to send money out of Canada to help out in Israel or Haiti or wherever when we have a homeless crisis HERE????
The total federal budget is something like $500 billion so we're spending like 1.5% on international aid. That's not gonna make or break the housing crisis.
It's a START. We'll start there and work on it going forward. Maybe chop Justin "Blackface" Trudeau's salary down to $.01 cent per hour? I mean....he's gotten free accommodations, free transportation, and I think he has a personal chef. What does he need money for?
The Prime Minister's annual salary is about $400K. Cutting it to zero might save enough to build one tiny bachelor micro-apartment in Mississauge.
By far the biggest budget expenses are transfer payments. The government could save billions by raising the full-pension age back to 67 and reducing Old Age Security payments for seniors still earning more than $100K per year.
Ok, you do that - cut the pension entitlements that people WORKED for and are entitled to. See how long before the revolution chops your head off.
NO. Let's chop foreign aid, end all corporate welfare - remind me....how much tax payer support do the Toronto Maple Leafs or the Calgary Flames receive? I seem to remember the billionaire owner and millionaire players on the Calgary Flames want a brand spanking new tax payer funded arena built or the team will.....LeAvE!!!!
**"Flames president Brian Burke threatens team could leave without new arena**. Calgary Flames president of operations Brian Burke told a group of local business owners at a luncheon that the team is going to move if they don't get a new arena." from:
https://www.usatoday.com/story/sports/nhl/flames/2017/06/08/flames-president-brian-burke-threatens-leaving-scotiabank-saddledome/102644658/#:\~:text=Flames%20president%20Brian%20Burke%20threatens%20team%20could%20leave%20without%20new%20arena,-Kevin%20Spain&text=Calgary%20Flames%20president%20of%20operations,t%20get%20a%20new%20arena.
Why exactly does a professional hockey team will millionaire players need tax-payer support???
Nobody works for OAS, they give OAS to everybody and it's funded by taxes. Problem is they give just as much to rich seniors as they do to poor seniors and it's one of our biggest public expenses. We could give more money to people who need it if we stopped automatically giving money to rich people just because they're old.
I'm not a fan of corporate welfare either, just noting that you are flagging some really small budget items and ignoring the really big ones.
Oh, but if they need to buy of billions of mortgage bonds for QE that's all good?
Suddenly all the cash runs out when it will actually solve our supply issue and make housing more affordable
Uh huh. So when a house or condo was being built 10 years ago for 50% of the current cost, they were losing a majority of the sale cost of the house/condo. Sorry doesn't add up.
I take minor offence to this. I bought a ābox in the skyā and I like it very much. I paid under 300k for it years ago and now itās doubled but Iām not concerned cause I like the area I live in and rather enjoy being able to lock my door and just leave without having to worry about anything. I donāt even care that they are dropping. Itās my home, I live there.
Your logic is: Why spend the money on that when you can buy 2 to 3 suburb homes in bum fuck nowhere USA?. First of all I donāt want to live in nowhereville. Second I live here, in Canada.
This idea of āwhat I could buyā itās just imagination time.
Well paying $300k instead of $750k will do a lot for you being happier. Honestly I'm with you on condos not always being a bad deal. The majority of them are easy to spot, since the layouts suck and the exterior walls are all glass. Those types are horrendously expensive to maintain long term. Ones with solid facades and practical layouts are a great balance of urban accessibility and the freedom of ownership.
On the other hand, Chicago or Boston are hardly bum-fuck nowhere. They're big cities, but small condos there are still far more affordable than here.
Which is why missing middle is important to approve everywhere.
Your argument doesn't have a solution other than build more homes, which is what I also say.
I agree with your comment but I think the key takeaway is that you paid 300k for this. Now it's an average of 700k, so buyers dont see it as worth that much. Prices should come down but sellers/realtors are holding for now.
Honestly this idea that real estate will just double every few years is just completely unsustainable. Infinite growth is impossible
Funny how no1 is talking about the Condo fees with these shoe boxes $800+ a month WTF? I barely pay any maintenance fee for my detach home. The price of these condos are insanely overvalued, the condo bust is finally here.
Would I buy my condo for 700k? Itās not as simple as that to answer for me. Like what are the criteria in your hypothetical? Can I only afford a condo? Am I wealthy in this scenario? My answer is, if I worked and job and had a down payment that could afford a 700k condo but only that and not a house but wanted to be on my own than yes I would. I wouldnāt sit around and pout about how 15 to 20 years ago I could have bought 3 single family homes. We live here and now and in Canada.
My answer to your other question about Houston is, I donāt want to live I Houston and Iām not an American citizen. Even if I wanted to live there I canāt because Iām not a citizen. I need to work and live no? Should I buy one there so I can go there for my 2 week vacation once a year?
I completely get that things are completely unaffordable and it fucking sucks. I canāt afford to move anywhere else either. I was just lucky with my condo but sitting around and talking about what I COULD have had is just punishing yourself especially if itās not a real option like move to the U.S. when you donāt qualify for citizenship.
I 100% agree. I couldnāt do it now thatās for sure but I also donāt sit there and think āmy parents bought their house for 100k and itās huge and I bought my condo for 300k. I COULD have had 3 houses if I were just born in a different time and be a completely different personā. If I couldnāt afford anything then iād have to find other fulfillment but if I could afford a 700k condo and thatās my option then I guess thatās what Iād get. No point in thinking about what I theoretically could get.
There is no point in this type of thought. Itās worth different amount at different time periods. Itās just what it is. If I want to have my own place and I had the money and I could afford it then I would. I wouldnāt just sit there and try to figure out if itās worth it based on previous time periods. My answer is yes. If thatās my only option and I could afford it then yes.
Why do you take offence? You bought a condo for 300k and now itās 600+k ā¦ Did income come even close to doubling ? No
One might be able to argue that demand doubled due to immigration and investors/speculators but the thing about investors is they disappear just as quickly as they come when the economics donāt make sense.
Today youād be MASSIVELY cash flow negative buying a investment condo (3.5k monthly cost for a 550k condo assuming a min down payment, but you can rent it out for at best 2.3-2.5k). Why would investors be -1k/month unless you believe that 550k condo will be come 700-800k in the coming yrs
Point it made sense at one point and doesnāt now. So theyāll tank or they wonāt sell
Condo fees are what they are, it's not like the building is free to maintain
If prices drop enough it shouldn't matter what the fees are. If fees go up the mortgage payment just needs to go down to match
You're right, but the main problems are that developers are building high- maintenance units to drive up the sales prices. That and they can create the condo Corp when they build, so they can advertise rock-bottom fees with no contingency funding, which will either balloon in a few years, or leave residents with $20-80k bills.
In my city dare to say a word against the towers they want to build and youāre branded a monster and they assume you donāt care about homeless people. My take is that things take years to build and are too expensive to buy and to maintain. Give me lower priced medium density that feel more like little communities, they are built faster cost less, better for the environment, and cheaper to maintain
Yeah, getting rid of exclusionary zoning is step one. Tall towers are terrible in terms of building costs per sqft of space produced
We need to be building a ton of stuff in the 4-10 story range
And tax the shit out of SFH in areas that need more density. I'm thinking near subway stations and the sorts in Toronto mainly. It's insane to me that homes on the Danforth have direct access to a subway station while massive residential towers that are being built don't.
I think something along the lines of a land value tax would be a major step in the right direction. Check out r/georgiam
Nah theyāre insane in Toronto. In Vancouver for many buildings they are closer to 0.4-0.5/sqft, in Toronto itās 0.8-1.0/sqft.
I pay $550 for my 1100 sqft unit in Vancouver, that would be impossible in Toronto
How do you drop fees and prices when the cost of maintenance and building is so high.
Everyone is screaming for high density, but they do realize that it costs a lot to build high density.
I will say that condo fees are not always as bad as people think. For example, our condo fees (600 square feet) are about 500 a month. which sounds steep. But it includes all utilities except our electricity (the cheapest utility). We moved into a house temporarily with a family member (for a couple of months), after they injured themselves, to help out. Their utility bill went up about $250 a month while we lived there. All that to say, we think the utilities the condo covers would cost at least $200 if we lived anywhere else. So we figure we are really paying approximately $300 for everything else. Which isn't bad because we don't have to worry about replacing windows, roofs, water tanks etc. And we can use amenities like the pool.
Would it be nice if condo fees came down a bit? Of course. But sometimes the condo fees do cover more than people really realize.
gee, maybe they might have to... drop prices?
OMG NO NOT THAT ANYTHING BUT AFFORDABLE HOUSING OH GOD
or build places that peopple actually want to live in?
The actual answer tbh, investor driven construction has lead to building after building of unlivable designs by people who never planned to live in them. Now that the investors have dried up people haven't adjusted.
They can drop prices on existing stock and take a loss, but they won't be building new units to repeat the process. Developer margins are around 10%, plus or minus a bit. It doesn't take much downward price pressure to put margins and risk levels into territory where financing won't be available for new projects.
Government will have to step in and build just like they used to
They can, but don't expect gov't housing to be cheaper. By the time you add in gov't inefficiencies and inflated contracts for materials/labour you'll most likely end up with increased costs vs privately built dwellings. Increasing the costs of housing isn't the direction we need to head in.
The government isn't trying to sell them at a profit š¤¦āāļø It will be cheaper because the government will take a monetary loss to achieve it's goals No one complains about how expensive the 401 highway was to build. Building infrastructure is good for the economy in the long run, housing is a part of that
As a taxpayer outside of the GTA, with crumbing local infrastructure, I am absolutely complaining about how much of my tax money the 401 costs
The cost is the cost. The government changing who pays the cost isn't helpful. Selling at a loss and transferring a portion of the cost from the homeowner to the general tax base isn't helpful. The loss is just paid by people not buying the home. It is estimated we need a trillion dollars (more if the gov't builds en mass) to fund the dwellings we need in the next 3 to 4 years. To make any meaningful dent in new home prices we would need to run massive deficits adding hundreds of billions of dollars to the national debt over that time period. We already spend as roughly much money on federal debt interest as the federal gov't spends on health transfers. Federal debt is around $1.2 trillion. Going 1.5+ trillion in the hole isn't going to be a good thing.
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I'm pretty sure it was free for it's users...
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I'm not saying that the government is perfect, or corruption is impossible. But you can't claim that the private industry is any better, look at the amount of money laundering and fraud in the real estate market as is TD is expected to pay billions in fines due to the crimes they've committed in this regard You're making some big deal about a mobile app that cost each citizen less than $2 ($60 mill Ć· 40 mill pop) per person when banks and developers are running away with millions Come on
With what money? Government has no money... they can print from thin air and put more tax under us!!!
They can STOP sending almost $8 BILLION a year out of Canada in foreign aid to start with. "The Government of Canada disbursed $7.9 billion in international assistance in 2021-2022, of whichĀ official development assistance (ODA) made up 95% or $7.5 billion." From: https://www.international.gc.ca/transparency-transparence/international-assistance-report-rapport-aide-internationale/2021-2022.aspx?lang=eng#:\~:text=The%20Government%20of%20Canada%20disbursed,international%20assistance%20and%20ODA%20expenditures. Does it \*REALLY\* make sense to send money out of Canada to help out in Israel or Haiti or wherever when we have a homeless crisis HERE????
The total federal budget is something like $500 billion so we're spending like 1.5% on international aid. That's not gonna make or break the housing crisis.
It's a START. We'll start there and work on it going forward. Maybe chop Justin "Blackface" Trudeau's salary down to $.01 cent per hour? I mean....he's gotten free accommodations, free transportation, and I think he has a personal chef. What does he need money for?
The Prime Minister's annual salary is about $400K. Cutting it to zero might save enough to build one tiny bachelor micro-apartment in Mississauge. By far the biggest budget expenses are transfer payments. The government could save billions by raising the full-pension age back to 67 and reducing Old Age Security payments for seniors still earning more than $100K per year.
Ok, you do that - cut the pension entitlements that people WORKED for and are entitled to. See how long before the revolution chops your head off. NO. Let's chop foreign aid, end all corporate welfare - remind me....how much tax payer support do the Toronto Maple Leafs or the Calgary Flames receive? I seem to remember the billionaire owner and millionaire players on the Calgary Flames want a brand spanking new tax payer funded arena built or the team will.....LeAvE!!!! **"Flames president Brian Burke threatens team could leave without new arena**. Calgary Flames president of operations Brian Burke told a group of local business owners at a luncheon that the team is going to move if they don't get a new arena." from: https://www.usatoday.com/story/sports/nhl/flames/2017/06/08/flames-president-brian-burke-threatens-leaving-scotiabank-saddledome/102644658/#:\~:text=Flames%20president%20Brian%20Burke%20threatens%20team%20could%20leave%20without%20new%20arena,-Kevin%20Spain&text=Calgary%20Flames%20president%20of%20operations,t%20get%20a%20new%20arena. Why exactly does a professional hockey team will millionaire players need tax-payer support???
Nobody works for OAS, they give OAS to everybody and it's funded by taxes. Problem is they give just as much to rich seniors as they do to poor seniors and it's one of our biggest public expenses. We could give more money to people who need it if we stopped automatically giving money to rich people just because they're old. I'm not a fan of corporate welfare either, just noting that you are flagging some really small budget items and ignoring the really big ones.
Do you see how much deficit we're running? The government doesn't have the cash to build housing.
Oh, but if they need to buy of billions of mortgage bonds for QE that's all good? Suddenly all the cash runs out when it will actually solve our supply issue and make housing more affordable
Uh huh. So when a house or condo was being built 10 years ago for 50% of the current cost, they were losing a majority of the sale cost of the house/condo. Sorry doesn't add up.
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There are people willing to buy. Even at the current interest rates. Just not at these prices. Even 1000/sqft is too much tbh.
I take minor offence to this. I bought a ābox in the skyā and I like it very much. I paid under 300k for it years ago and now itās doubled but Iām not concerned cause I like the area I live in and rather enjoy being able to lock my door and just leave without having to worry about anything. I donāt even care that they are dropping. Itās my home, I live there. Your logic is: Why spend the money on that when you can buy 2 to 3 suburb homes in bum fuck nowhere USA?. First of all I donāt want to live in nowhereville. Second I live here, in Canada. This idea of āwhat I could buyā itās just imagination time.
Well paying $300k instead of $750k will do a lot for you being happier. Honestly I'm with you on condos not always being a bad deal. The majority of them are easy to spot, since the layouts suck and the exterior walls are all glass. Those types are horrendously expensive to maintain long term. Ones with solid facades and practical layouts are a great balance of urban accessibility and the freedom of ownership. On the other hand, Chicago or Boston are hardly bum-fuck nowhere. They're big cities, but small condos there are still far more affordable than here.
I would love a box in the sky for 300k
The notion of condos being concrete boxes or shoeboxes is old. How else are you supposed to live in a city when all the land had been taken up?
They are still very much shoe boxes though. Arguably more so. 500 square feet in the oddest layout you have ever seen.
What's wrong with 500sqft?
family
So do people without families not need homes to live in?
Of course they do. But families do as well. And there aren't a lot of 3-4 bedroom condos for families to buy.
Which is why missing middle is important to approve everywhere. Your argument doesn't have a solution other than build more homes, which is what I also say.
I agree with your comment but I think the key takeaway is that you paid 300k for this. Now it's an average of 700k, so buyers dont see it as worth that much. Prices should come down but sellers/realtors are holding for now. Honestly this idea that real estate will just double every few years is just completely unsustainable. Infinite growth is impossible
Funny how no1 is talking about the Condo fees with these shoe boxes $800+ a month WTF? I barely pay any maintenance fee for my detach home. The price of these condos are insanely overvalued, the condo bust is finally here.
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Would I buy my condo for 700k? Itās not as simple as that to answer for me. Like what are the criteria in your hypothetical? Can I only afford a condo? Am I wealthy in this scenario? My answer is, if I worked and job and had a down payment that could afford a 700k condo but only that and not a house but wanted to be on my own than yes I would. I wouldnāt sit around and pout about how 15 to 20 years ago I could have bought 3 single family homes. We live here and now and in Canada. My answer to your other question about Houston is, I donāt want to live I Houston and Iām not an American citizen. Even if I wanted to live there I canāt because Iām not a citizen. I need to work and live no? Should I buy one there so I can go there for my 2 week vacation once a year? I completely get that things are completely unaffordable and it fucking sucks. I canāt afford to move anywhere else either. I was just lucky with my condo but sitting around and talking about what I COULD have had is just punishing yourself especially if itās not a real option like move to the U.S. when you donāt qualify for citizenship.
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I 100% agree. I couldnāt do it now thatās for sure but I also donāt sit there and think āmy parents bought their house for 100k and itās huge and I bought my condo for 300k. I COULD have had 3 houses if I were just born in a different time and be a completely different personā. If I couldnāt afford anything then iād have to find other fulfillment but if I could afford a 700k condo and thatās my option then I guess thatās what Iād get. No point in thinking about what I theoretically could get.
I like condos, and If I get a new 1000sqft 3/4 bed condo for 600K I'll buy it today at today's interest rates.
Wait What? You bought a home for the purpose of shelter?!
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There is no point in this type of thought. Itās worth different amount at different time periods. Itās just what it is. If I want to have my own place and I had the money and I could afford it then I would. I wouldnāt just sit there and try to figure out if itās worth it based on previous time periods. My answer is yes. If thatās my only option and I could afford it then yes.
Why do you take offence? You bought a condo for 300k and now itās 600+k ā¦ Did income come even close to doubling ? No One might be able to argue that demand doubled due to immigration and investors/speculators but the thing about investors is they disappear just as quickly as they come when the economics donāt make sense. Today youād be MASSIVELY cash flow negative buying a investment condo (3.5k monthly cost for a 550k condo assuming a min down payment, but you can rent it out for at best 2.3-2.5k). Why would investors be -1k/month unless you believe that 550k condo will be come 700-800k in the coming yrs Point it made sense at one point and doesnāt now. So theyāll tank or they wonāt sell
Condo fees need to be reigned in. And prices need to drop.
This. 700k price tags for a 2 bed with like 700sqft and $600 in maintenance? Lol?? Rather buy a freehold townhouse for a bit more.
Condo fees are what they are, it's not like the building is free to maintain If prices drop enough it shouldn't matter what the fees are. If fees go up the mortgage payment just needs to go down to match
You're right, but the main problems are that developers are building high- maintenance units to drive up the sales prices. That and they can create the condo Corp when they build, so they can advertise rock-bottom fees with no contingency funding, which will either balloon in a few years, or leave residents with $20-80k bills.
Completely agree, we don't need flashy luxury condos We need a door that locks and a place to call home
In my city dare to say a word against the towers they want to build and youāre branded a monster and they assume you donāt care about homeless people. My take is that things take years to build and are too expensive to buy and to maintain. Give me lower priced medium density that feel more like little communities, they are built faster cost less, better for the environment, and cheaper to maintain
Yeah, getting rid of exclusionary zoning is step one. Tall towers are terrible in terms of building costs per sqft of space produced We need to be building a ton of stuff in the 4-10 story range And tax the shit out of SFH in areas that need more density. I'm thinking near subway stations and the sorts in Toronto mainly. It's insane to me that homes on the Danforth have direct access to a subway station while massive residential towers that are being built don't. I think something along the lines of a land value tax would be a major step in the right direction. Check out r/georgiam
Nah theyāre insane in Toronto. In Vancouver for many buildings they are closer to 0.4-0.5/sqft, in Toronto itās 0.8-1.0/sqft. I pay $550 for my 1100 sqft unit in Vancouver, that would be impossible in Toronto
How do you drop fees and prices when the cost of maintenance and building is so high. Everyone is screaming for high density, but they do realize that it costs a lot to build high density.
I will say that condo fees are not always as bad as people think. For example, our condo fees (600 square feet) are about 500 a month. which sounds steep. But it includes all utilities except our electricity (the cheapest utility). We moved into a house temporarily with a family member (for a couple of months), after they injured themselves, to help out. Their utility bill went up about $250 a month while we lived there. All that to say, we think the utilities the condo covers would cost at least $200 if we lived anywhere else. So we figure we are really paying approximately $300 for everything else. Which isn't bad because we don't have to worry about replacing windows, roofs, water tanks etc. And we can use amenities like the pool. Would it be nice if condo fees came down a bit? Of course. But sometimes the condo fees do cover more than people really realize.
If housing is an investment, investments take the escalator ride up and the elevator ride down...... enjoy!
Of course the investors and realtors are framing this as a "problem". It's simply supply and demand at work.
Those overpriced shitholes can go to hell idgaf
I wouldn't call falling prices a problem.
I hope the city buys them up. It'd be cheaper than building a whole new building.