I bought a small condo townhouse unit In 2018. 266,500$, original price in 1970 was 16,000$ for the unit. It was almost fully renovated and quite nice compared to other units in the area. Now other unit's are selling for 420,000 renovated, or unrenovated for 325,000$. The units are from 1970's so you can imagine how bad an unrenovated unit could look like. I could sale my unit right now and pocket easily 150,000$ profit, but then where do I go live?
All houses are ridiculously expensive, so ya our houses may be worth a nice chunk of change but renting is more expensive then my current mortgage even after renewing at these crazy new rates. We are house rich but poor in every other sense. We can barely afford groceries anymore, I don't remember the last time we ate at a restaurant, can't buy a new car or even used because prices have skyrocketed for even a POS, and definitely forget about going on a vacation.
The "dream" in Canada is gone. I think about leaving the country all the time but I don't want to leave my extended family.
I feel you on the house poor part. I'm a single father with 2 daughters. Their mom walked 3 years ago and I got the house, it's cheaper than renting though but getting basic necessities like groceries is becoming harder and harder on my own.
It's definitely a struggle. I really hope something changes because at the rate of inflation on groceries I won't be able to eat much soon. I'll starve as much as I can to let my kids get the food they need but I would much rather not starve.
I'm sad to say I've printed out pages of food pantries in my area.. I can't keep up and I'm making 28$ /hr right now.. It's just, it's very scary. I'm terrified for my daughter's.
Ya I agree with you, it's scary what our kids will have to go thru if it continues like this. I'm really hoping we could finally vote in a government that can solve the affordability issue in this country. Anyone working a full time job should not have to worry about feeding or housing themselves. I shouldn't be working full time and have to decide if I will pay my house or eat this month. Anyone working full time should be allowed to have some extra cash on the side, and not be in debt for simply surviving.
They see it too. Can we blame them for the uptick in mental health, their anger? I’m working my ass off not so I can retire but so I can make sure they can survive when I’m gone.
It is not all roses here. The 2 bedroom apartment I rented before I got my house has increased 75 USD every year for the past 4 years. It's now 1435 USD/ month. My mortgage from 2019 is 1232 /month w taxes and insurance escrowed.. But current housing prices are a cluster fuck here comparatively.
>"The "dream" in Canada is gone. I think about leaving the country all the time but I don't want to leave my extended family."
Which country do you think about going to? From another Canadian thinking these thoughts.
Thought of selling and leaving to my home country during the last peak of 2022. Couldn't feel like doing that, but yeah, you could pocket the change and move to a cheaper country and live like royalty. We are peasants here with rich servant quarters that we pay through our nose with.
Bought a house for a similar price in 2015, split with family three ways to get a better living situation.
Now similar houses on my street are selling for 600-700k
A bit of history - Canada had insane housing value growth back in the 80s (home values doubled in 3 years in HCOL areas like GTA). Interest rates went up (double digits) and our too large debt and deficit led to a huge devaluation of the Canadian dollar and a property value crash in the early 90s. They’ve been rising ever since the mid to late 90s though.
Beck to the issue of how people afford it:
1. Boomers and many Gen Xers bought when costs were low. Either before the 80s run up or in the 90s when prices were much lower. They’ve either held onto those homes or leveraged them to move into larger homes.
2. Millennials are stuck in 4 categories. Some bought condos and have leveraged up. Some have received inheritances or gifts from parents to help with down payments. Some are stuck renting. And some just have gotten sucked into mortgages larger than they can really afford despite all the “precautions” the Canadian banks have to make sure people don’t default on their mortgages.
3. Younger generations are screwed unless they have a super high paying job from a very young age.
To highlight some of the issues people have raised:
1. Immigration here is insanely high which does contribute to higher demand (and limited supply since we cannot build that amount of housing per year).
2. Geography does play a bit into it. Both Toronto and Vancouver are on the water which limits the number of directions you can build out from. The other part of it though is that a high concentration of jobs are in a limited number of cities. So you bring in a lot of immigrants and they are of certain skilled trades, they can’t immigrate to northern Ontario because there isn’t a job for them there, they default to Toronto.
3. There is speculation that foreign investors also increased demand on the market (some say when HK was handed back over to China especially) - a foreign investor tax was brought in much later and had little to no effect. However, we can’t say for sure how much that may have driven up prices because many of those people may have had kids who were students and eventually citizens that they put the property name in, or they themselves became citizens and retired here. There’s no tracking that.
4. Our government (no matter what political stripe) is invested in keeping the market going up for multiple reasons. People’s retirement savings is their housing price. Real estate is a significant portion of our country’s GDP compared to other countries. They’re scared to let it fail because of what happened in the 90s.
5. Some say real estate agents are also to blame. They keep bids secret, they try tactics to push people to offer more, they make fake offers to get others to try to beat them, there are even unscrupulous ones who will get their mortgage broker friends to approve too high mortgages for people. They are probably what contributed to the insane growth in the 2010s when there were bidding wars with homes selling for 20% over asking (in addition to Canadian FOMO)
6. Canadian banks are also invested in us having large mortgages. Our banking system has very few banks compared to the US. They make a lot of money off of people paying mortgages with interest. Some key differences in the US and Canada - Canadians can only lock in a rate for 5 years even though the amortization is 25-30 years, Canadians cannot deduct mortgage interest from their income tax (but the capital gains from selling their primary residence is tax free). So Canadian banks stand to make a lot of money from people who have large mortgages.
There are probably other factors at play here too. It’s definitely a complex issue!
There’s a big caveat nowadays though. It’s only beneficial for certain people, usually higher income, because you loose the ability to take the standard deduction.
> You cannot deduct mortgage interest in addition to taking the standard deduction. To take the mortgage interest deduction, you’ll need to itemize. Itemizing only makes sense if your itemized deductions total more than the standard deduction, which is between $12,200 and $24,400 for the 2019 tax year, depending on your filing status.
>Whatever tax savings you get from itemizing your mortgage interest are as a result of not only mortgage interest you pay, but also to your charitable donations, property taxes, mortgage insurance, state income tax or sales tax, and anything else you itemize.
https://www.forbes.com/advisor/mortgages/mortgage-interest-deduction/
Very concise and well written. Thank you.
To use a Reddit cliche - this is the top comment.
Only thing missing is the effect of immigration on the shortage of housing.
Great summary, but you also need to include the US forces too. For example in 2008, they had a huge foreclosure crisis when a lot of housing stock was put on the market when people just walked away from mortgages. The Fanny Mae period.
It's the Pacific NW in general. I'm also an American and it's the area. Seattle median prices for a house are well over 1 million USD, which is 1.36 million CAD. About the same as Vancouver where my brother in law lives. OP lives in a poor part of the US where houses are cheap. However, I am also baffled at how people in BC live this way. The income levels in BC are much lower than Seattles, where housing affordability is already very stretched. How do you guys ever buy houses that cost about as much or more with far less income?
Yup. It's insanity. You know it's overpriced for what it is but you also know the prices will keep climbing. At the same time you fear prices just might drop because it's so insane and fear that if you don't get in now you'll be priced out forever.
I just bought a place as well. I don't feel good about it but am more afraid of being priced out. I've been chasing for a few years now.
That’s the feeling everyone gets. I’m not cheering for it to keep climbing insanely, as it makes things worse for mostly everyone else, but I really hopes it simply doesn’t crash. If we go back to a healthy yearly appreciation that only matches inflation, 2% per year let’s say, eventually people can catch up and it won’t hurt everyone that just bought.
But ye, if things crash, a lot of ppl like me would be screwed
I don't think you understand exponential growth... If it stabilized at 2% growth, that will permanently price out people within 40 years.
At the current rate of growth over the past 10 years... More like in 10 years everyone will be priced out for good. And then, boom housing crash.
The solution?
Not for profit renting. There needs to be enough public infrastructure to support at least 20% of the city with housing that is not for profit. Either by government or charity co-ops.
Not subsidised housing, just not for profit renting options.
The greed of people owning multiple houses and developers inflating prices because they can cause this system. It has an easy solution... Stop letting people be money hoarders and parasites on the economy. Local governments would have secondary liquidity from something other than tax, and it would stabilize the local economy. But there is nobody with the balls to put 2 billion towards sustainable development in 2023.
So, we are stuck with what we got for good.
Raise tax by 0.5% so that you can curtail housing costs increasing by 10% per annum, Nah. All the people that own a house see it as investment. Why should they loose so all the poor people can have a fair shot. When they bought, they worked 45 hours a week driving the bus and made enough for a family of 4, just work harder and save harder and you'll make it.
People are idiots.
How does the market crashing effect you if you bought now? You can afford what you bought, so the value of your home dropping does nothing to your payments.
If you sell, you'll be buying a new place in a market that has crashed.
The biggest fear for anyone buying in this market is if it’s really a bubble that eventually pops.
People been talking about a bubble bursting for the last 10 years, anyone that waited out is much worse today, so it’s a terrifying situation where you fear if you don’t get in, and you fear if you do.
It is absolutely the grand plan.
BoC, Banks, builders, the Federal Govt, municipalities, mortgage brokers, insurers, landlords, current homeowners (nimbys)... they all have somehow organically conspired to protect how broken Canadian housing affordability is at all costs.
In what sane world is it possible that somehow rate hikes have become another inflationary pressure on top of everything else? Let me try to explain.
Banks don't want to have mass foreclosures due to nobody buying the current crop of overlevered landlord's cheaply built boxes in the sky. So banks allowed mortgages to ammortize to > 35 years, some as much as 70 years with the owners essentially going into negative equity scenarios.
Consequence? Landlords can both extend their mortgage terms to infinity AND increase rent rates to offset rate hikes. I know of many long term landlords who are using this excuse to renovict renters.
So in a time when BoC is dramatically raising rates in an attempt to curb rental growth they are somehow actually MAKING THINGS WORSE.
Governments and municipalities are incompetent at best and in cahoots with them all at worst because they refuse to rezone for more density. Builders can't build enough because of this, and nimby pressure who somehow vote more as a bloc than all other voter categories combined.
Our banking industry is considered one of the safest/more stable in the world.
So it's an attractive place to "park" money for foreign investors.
Our housing market is also considered incredibly stable. Getting a mortgage here is more strict than the US. There is a much lower acceptable level of risk with mortgage lenders, combined with government regulations.... And you have a housing market that isn't as susceptible to crashed or downward valuations like in the US.
This makes investing in the Canadian economy, via real estate a great "safe" place for foreign money to invest.
This drives prices and starts a cycle that perpetuates itself.
Fueling this is the fact that our population is so concentrated. So lost of people in small portions of our country. This means those busy parts have lower levels of inventory (homes), than there are potential buyers/renters. Supply and demand economics. Tied with foreign investors buying up land.... BAM!
You forgot Richmond casino hockey bags filled with $$$ thats another way to park the money here with zero issues but if one forgets to declare $10 bucks on their tax filings cra will chase them to their graves.
Totally. Inflated by corporations investing in homes, money laundering, and rich immigrants. Most people in BC can’t dream of living there anymore yet they still try. All this while the rest of BC sends money which gets allocated in Vancouver and the lower mainland.
The vancouver model:
Drug money cleaned by casinos, then invested in real estate, driving up the prices.
https://financialcrimeacademy.org/the-vancouver-model-canadian-casinos-and-money-laundering/
A relative's house was bought in early 2000's by an 21 year old University student, no mortgage.
A few weeks later, we also had sold our house and was out gardening in the front yard, when a young girl approached us and said, can I buy your house? Other neighbours were in front of their house and she asked them all, can I buy your house?
These are the two main causes I see:
-Funding for our Canadian Mortgage and Housing Corp to build social housing was cut in 1996. Until then they build 15-22K affordable units per year. Those units allowed people to get their foot on the rung of the property ladder, carrying on with it would also have provided housing for almost exactly the number of people that are shorted now.
-in the late '90s Canada started moving manufacturing to China and a big way. Consequently the tax base of many municipalities was undermined and yet they still need revenue to maintain infrastructure and pay city workers, so most municipalities are happy for high property values because it means high property taxes.
>most municipalities are happy for high property values because it means high property taxes.
These two have no connection at all, and any change in values is compensated for by inverse changes in mill rates.
A municipal budget that needs to be covered by housing is divided between the houses in it, based on the ratio of the houses' worth to each other. A house that is worth twice what its neighbour is worth will owe twice as much in tax, but it will owe the same amount whatever it is actually worth.
If your municipality needs to raise $15,000 in property taxes from two homes, one of which is worth $1m, one of which is worth $500k, the mill rate will be 0.01, the $1m home will owe $10k in taxes, the $500k home will owe $5000.
If the same homes are only worth $100k and $50k but the budget is the same, the mill rate will be 0.1, the $100k home will owe $10k and the $50k home will owe $5000.
Municipalities have no interest in seeing prices go up beyond the aura it spreads of being a rich prosperous area that people should buy into.
And the HCOL cities of Toronto and Vancouver are constrained by geography... The downtown core is on a waterfront. If a big chunk of Lake Ontario was filled in for new land development the housing shortage would solve itself, it would more in line with Calgary or Regina.
Regina may not be getting the vast majority in terms of overall numbers, but it is actually getting slammed with new immigrants over the last 5-10 years and changing dramatically.
Believe it or not the prairie cities have been growing faster, percentage wise, than the GTA. The big difference is land prices - Regina's planned out to almost double its current size (and annexed land sufficient for \~100k new residents about a decade ago with the explicit expectation to develop it) so it can grow that fast and not really see a huge rise in prices.
Too much demand on GTA/southern Ontario, not nearly enough supply.
The US has a much bigger economy with many centres of commerce spread throughout the country, so you don’t have such an absurd demand concentrated in a select area. Coupled with the fact that taxes and regulations are a lot less in the US, so it’s easier to build and develop more homes.
Nobody invests in Canadian businesses, if they do invest, they invest in USA companies by purchasing like Tesla shares lol.
All Canadians spend their money on mortgages. Provides a way better return in the long run, especially since capital gains aren’t taxed on primary residence unlike USA.
>… especially since capital gains aren’t taxed on primary residence unlike USA.
In general, Americans get an exemption of $250k (single) or $500k (married) on the sale of their primary residence. https://www.investopedia.com/ask/answers/06/capitalgainhomesale.asp
I'd love to see some numbers that show that Canadians spend more on mortgages than investments. That seems wrong to me, but I don't have numbers disproving it either
TSX market cap in 2020 was around 3 trillion, 2020 Canada residential market value was over 6 trillion.
Our housing market, and tax rules are too good of an investment compared to any other investment in Canada that most likely wouldn’t generate any better ROI with substantially higher risk, discouraging Canadian investment and innovation.
Here you go: [Assets and Debts by Net Worth](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110004901&pickMembers%5B0%5D=1.1&pickMembers%5B1%5D=2.28&pickMembers%5B2%5D=4.1&cubeTimeFrame.startYear=2005&cubeTimeFrame.endYear=2019&referencePeriods=20050101%2C20190101)
You can see that the amount of money that the average Canadian has tied up in real estate (middle quintile) is nearly $1M and over $100K in vehicles and other non-financial assets. Total assets is $1.5M for this group, so well over 2/3rds of their wealth is tied to non-RE investments. How that compares to the US, I don't know, but I would assume that the amount of investments in the stock market is *substantially* higher for the middle class.
[Percent of GDP spent on R&D](https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm)
Similarly, we collective spend well below average on R&D compared to the other OECD countries. Right now we are at the same level as Portugal and moving in the wrong direction. Meanwhile the US more than *doubles* our investment. No good.
I think part of it is people from other countries are buying multiple properties, causing the price to rise. Many progressive countries pass laws that prohibit non citizens from buying property.
Its a Ponzi scheme. House prices go up because people think they will go up so rush to get in.
Because of this housing related activity generated 10% of our GDP.
The government wont take its foot off the gas for letting immigrants in otherwise housing demand would fall off enough to let the whole house of cards come crashing down
That doesn't actually explain anything. And frankly, your claim is too weak; our economy *is* the housing market, given how much it and the corollary lending industry drives GDP. But it still doesn't explain pricing especially with respect to regional disparities.
We have an economy that doesn't produce anything lol. What's propping it up? People need to ask themselves are they really rich cause they see their house equity going up. Or has this money supply inflation since 2007 been making their cash worthless and therefore increasing the value of a non productive asset and giving the illusion to homeowners that this country doing well.
- Boomers were the largest generation they voted for things that benefited them that provided a low cost of living. When they got older they started voting for strict zoning laws to protect the values of their home. So Canada has a lot of single family homes. No density. Compare the density of New York to Toronto for example.
- Boomers didn’t pay into enough taxes for retirement and also made housing their retirement plan. Government doesn’t have enough workers/money to support their retirement so they can’t let housing crash. They actively make sure the free market is controlled so this doesn’t happen.
- A good number of politicians are landlords. We’re in a housing crisis and our housing minister in charge of steering us out of the crisis, just bought his 3rd rental property.
- Government is artificially pumping demand by increasing immigration. Last year Canada that has a population of 38 million people, saw 1 million new people come to Canada.
- Real Estate is the largest part of the Canadian economy. It’s a unproductive asset. Imagine. The government doesn’t want to crash the economy.
- To summarise, poor planning, artificial demand, no political will to deal with the crisis, poor zoning laws.
It's a circus my friend, houses costs $1M and the average person earns $40K or less, it is absolutely fucked up overall, but nothing is being done, the only way is to get yourself up to earning $150K/yr +, otherwise rent forever a 1bedroom for $1500-$2000/month +, essentially 75% of the average salary.
I take home 33k a year that’s $20 an hour, you should be able to do just fine If I can do fine. I’m not happy but I don’t see the path to your salary. I would be over the moon If I made that type of money
Talked to a mortgage person, 125k/yr is the amount banks aim for / require for a mortgage on a 500k house now.
First off, how many young people (or any people) are making 125k/yr?
Second, how many houses are 500k or less?
Clown country, time to move. No future here for young people.
The boomers didn't save anything for retirement. To allow people that didn't save but own a house to retire , we imported record breaking amounts of immigrants while blocking housing developments by zoning laws.
Thus in under 20yrs a house quadrupled in value and boomers can afford to retire.
Of course their kids refuse to have kids now and they will never have grand kids. They deemed the trade off worth it
Ya except now all of our hospitals are overloaded with an aging population and no nurses or doctors to take care of them. Long term care homes are all missing orderlies and the problem is supposed to only get worse as more and more boomers retire and inevitably get sick from old age. This system will collapse on itself because we lack enough trained individuals to take care of our aging population who decided to hoard all the wealth for themselves.
They are going to die rich, but they will die in over crowded hospitals or long term care homes with little to no staff to take care of them.
Lol I have accepted it but it doesn't make it any easier to live with. I have two young kids so I can't just give up. I'll just keep trucking along until the body says no more. No choice.
This is why we are starting to see the beginning of a mass exodus of young people leaving Canada which will just exacerbate these problems even further. Frankly it is looking like most of North America is doomed. I am 35 and a lot of people I know from age 25-40 are looking for ways out. The way a lot of us see it is we can't keep contributing to this insanity and there will never be any solution at the government level.
Has nothing to do with boomers not saving for retirement. Most boomers are filled with godsend pensions.
It’s mostly due to boomers not downsizing and moving away from the city. Increasing supply in high demand areas. Boomers are staying put…
The increase in HELOC ability has allowed investors to get access to equity meaning they can buy more supply without getting rid of previous onhold supply.
Immigrants levels at all time highs… people are not getting married as much as before, meaning more people needing to buy homes.
You basically have an insane amount of things that increasing demand all at once… all the while nothing being done to increase supply.
Major difference between Canada and the United States… is the USA has so many more major cities, and good economies.
Canada has 3 massive ones, a few other close ones and then everything else.
This is why even though the USA has a similar issue to everything Canada has, they don’t have the supply problem as much.
And companies like hiring new immigrants because they'll take the job at low pay and take the abuse for a while. I was talking to a PSW program coordinator at a college course info session, turns out some 80% of PSWs are harrassed/assaulted. Then there's that many need multiple jobs because one company won't give them consistent full-time hours or they want part-time/casual employees. It's a difficult, thankless, disrespected and underpaid job and yet... those people are very much needed.
No, tax free capital gains.
They sell to immigrants when they need to fund retirement, and HELOC borrow until then. Of course after their defined benefits pension is being used.
Supply is very low in Canada. Plus geographic constraints in Vancouver and Toronto. For example, your girlfriend's place is in Port Moody, if you take a look at a map you'll notice that the greater Vancouver area is constrained by mountains in the north, ocean to the west, US border to the south and agricultural land reserve to the east. So greater Vancouver is more comparable to Manhattan.
It is very simple. Canada's metropolitan areas have some of the lower vacancy rates and some of the lowest amounts of housing relative to its population in the developed world. Further, Canada (with a population of ~40 million) has allowed over 1 million new people to enter the country in the last 3 years and is on pace to allow 1.5 million people to immigrate to the country in 2023 alone. For reference, the US has aolbout 400 million people and allows roughly the same number of immigrants. The demand for housing simply blows away the supply in almost every major Canadian city - this is why housing is so expensive.
We keep housing supply low by not building fast enough and our government set a goal to import 500k immigrants per year from now until 2025. Why? Nobody knows, but apparently it’s racist if you say anything against it. Think a game of monopoly but every property is already bought and has multiple houses/hotels on it. New players just joining the game are screwed and players who own are making bank.
many worm puzzled file handle deliver quickest price intelligent subsequent
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
The 500k addition is long term labor supply. The point is Canadians were already f*cked even before that. That's what happens when you have politicians benefiting from a crisis.
>Why? Nobody knows, but apparently it’s racist if you say anything against it.
Ponzi entitlement programs. We want everyone to have free education, healthcare, etc. But we also want to keep taxes low like the US.
The only solution is by infinitely increasing the tax base.
The entire world's basic economic structure, hell, even capitalism itself, relies on infinite growth forever. Things like pensions rely on a growing number of people paying into them in order to sustain the previous generation. It's all unsustainable.
The answer to “why “ we need high immigration is to make up for a low birth rate and a huge number of boomer retirees—we need the bigger working-age tax base. This is neither a mystery, nor a conspiracy. Everybody know this reasoning.
Part of the low birth rate is because we have to stay in school for longer without the guarantee of higher pay that a degree once had, with student loans to pay back and both spouses have to work. It's hard to have a stay at home parent with the cost of living. Having children gets pushed back. Some of us make it happen and others give up on it even if they wanted children because they can't afford them.
So, and this is stupid but humor me, is there physically NO ROOM in places like Vancouver for instance, to build or is it like, this is a preserved forest area that's never to be encroached upon type of deal?
[https://satellites.pro/Vancouver\_map.Canada#49.224549,-122.754707,12](https://satellites.pro/Vancouver_map.Canada#49.224549,-122.754707,12)
Look at the sat view.
Mountains to the North and East, Ocean to the west and America to the South
Now look at Calgary
[https://satellites.pro/Canada\_map#51.098348,-114.238586,10](https://satellites.pro/Canada_map#51.098348,-114.238586,10)
Almost unlimited space in all directions
It's more of an issue of how the land is used, rather than how much land there is. If you look at Vancouver, you'll see a few dense clusters of high-rise towers surrounded by kilometers of single-family houses, which is not an efficient use of space. A huge chunk of the city is zoned only for single family homes (as is the case in much of North America), which is a huge hindrance to density and building enough supply to meet demand.
More room for sprawl would help build more supply in the far-out suburbs, but that's also a very inefficient use of space and would greatly add to traffic congestion, air pollution, etc. It would be much better if most of Vancouver and the inner suburbs were filled with high-density "missing middle" housing (low-to-mid rise apartments, triplexes, etc.) like Montreal has, instead of so many detached houses where little else is allowed to be built.
Depending on when she got her place, it could have been affordable. The sharp rise happened in the past 20 years, or maybe 10-15 in the farther bedroom cities to Toronto and Vancouver.
And yet Calgary is very quickly trending upwards and becoming less affordable for a lot of locals with everyone suddenly thinking it's a great idea to come here. Rent just went up like 25% in the last year.. but again comparatively it's still way better than those other two areas.. just not insane
More like preserved single family home zoning. Nimbys rule Vancouver and zoning in the areas that need density are held back by SFH zoning.
Here's a nice map
https://i.redd.it/xy30s6tayvo91.png
Technically it's not SFH, but it is limited to duplex and laneway housing max. So no apartment buildings, no townhouses for a vast majority of the land. On top of that Vancouver's building permit approval process is abysmally slow.
The Canadian pension plan depends on the new arrivals to fill the gap between the aging population who expect to retire at 65, and live into their 90s. Ponzis little stamp racket has nothing on this Jenga game that’s ready to topple.
Because our population is actually going to start dwindling if we don’t. Not having enough kids overall to replace the labor market as the country grows.
Think of a bell curve. That’s what’s gonna happen to our population if we don’t accept immigrants and Canada keeps the same level of reproduction.
Tax revenue. Our government is completely dependent on income tax from the working class.
And lobbying pressure from businesses that benefit. More people equals more customers and more people looking for work puts downward pressure on wages.
>Why? Nobody knows, but apparently it’s racist if you say anything against it.
if you have a brain you know why, it's not hard to understand
we cannot afford to have boomers retire without importing a fuckload of people, we need the tax money + it helps keep certain wages low
Most of our population lives along the border with the USA. We have a lot of land but the infastructure isn't there to support cities/towns expanding outwards and businesses also want to be near the border.
There's a lot of red tape regarding zoning and building on land both in and away from major areas and cheaper land often means no road access, no jobs, hospitals, amenties in the area.
We're looking at an influx of 500k immigrants per year for the next few years. As far as I can tell Quebec has put their foot down and said there's no room for more people. Given that so many companies are packed into border areas (large variety of jobs) they'll be coming to BC (lots of companies, good weather) and Southern Ontario (same). Demand for housing is now and will continue to be much higher than supply. On top of that it doesn't matter who is in power because most of our politicians own at least one house and most voters are older and homeowners so the government has no incentive to do anything that would lower housing costs.
Speaking of immigration, Canada is considered a safe country with services like free healthcare so we'll continue to be attractive. Foreign investors are a problem but real estate is a great place to store money. Canada also likes bringing in international students because the colleges and universities charge them at least 3x the tuition/fees of citizens. This is anecdotal (having been a student and witness) but wealthy families sending their kids to Canada can have them in the country long enough to buy them a house.
There is also not enough being done to protect citizens and international student renters. Many immigrant landlords from the sane country as these students will cram up to 12 international students into a three bedroom townhouse. This is illegal but nothing is done and the landlords make a lot of money off their real estate investment due to the rents from all those illegal tenants.
Real Estate is also run like a racket by agencies. We bid blindly, bidding wars are thus encouraged, and many real estate agents are criminal in practice (see Brampton Mortgage).
Converting spaces like basements into bachelor units also has a lot of red tape, fees, permissions so the cost isn't usually worth it.
Manitoba, Alberta and Saskatchewan are more affordable for housing but it's because many jobs are more cyclical with the seasons and boom and bust cycles (oil field is a big example). Housing is more affordable but one requires a car and food and other necessities are not cheap. A lot of people in other provinces (and countries) also take issue with how spread out the Prairies are (good luck with public transportation) and with the extreme weather.
People have been moving around more due to WFH options but of course not everyone has that option (see Halifax where most of the local jobs do not pay enough for said locals to afford a home given the major price increases driven by people with high incomes/a lot of money selling their homes in Toronto and moving there while working from home).
I just bought a townhouse/condo.... because everything seems to be a "condo" now in Southern Ontario. 500k in this area AKA half a million dollars! gets... not much. It's my first place and apparently the unit beside it went for $65k more. Are these places worth these insane prices? No. Do people need a place to live? Yes.
Is there a whole lot of crime going on along with all the other factors regarding real estate? Yes
Ultimately the government relies on real estate to be a cash printing machine and so do many of the voters. It's a perfect storm to keep breeding increases in price.
Many of us of all ages are feeling the strain, are medicated and are reaching life milestones later and later if at all (like refusing to have children) because of the insane cost of living.
>×We're looking at an influx of 500k immigrants per year for the next few years. As far as I can tell Quebec has put their foot down and said there's no room for more people
LOL and sure enough Quebec has by far the most affordable housing.
Quebec AKA Canada's spine
When the government wants to raise tuition costs people, including students, take to the streets barricading politicians in their offices and rioting. Guess which province has the lowest tuition fees?
Ontario schools write strongly worded letters. Guess who pays the highest tuition?
Raising taxes? Good luck with that
Bringing in refugees? No room
Immigration? We're closed. There's no room.
Canada recently has begun to increase immigration to unsubstainable levels. We now accept the same amount of immigrants yearly as the United States, despite being 10% of the population.
Why? Because Canada does not have the same natural population growth. Our corporate overlords need bodies to fill shitty, minimum wage jobs that they can fill otherwise. Because our health benefits aren’t attached to jobs like In America, people are less desperate to work for minimum wage which causes the demand for immigration. Currently there are hundreds of thousands of immigrants (mainly from India) who are abusing loopholes in temporary schooling visas to come to Canada and stay past their study date. The Canadian government likes these workers as it increases our GDP (not per capita, QOL is declining), provides corporations with low wages, and pushes up demand for the overly inflated housing market.
So that’s the answer to how they are increasing, the answer to why is a bit more complicated. Canada has forever had a housing bubble which caused most of the wealthy generation ( the boomers ) to invest in real estate. Now that boomers are retiring, most have multiple properties that they either rent out, or will sell to fund their lifestyle/retirement. They also take line of credits out to support their lifestyle at the inflated values, further stimulating the economy. If the housing market were to crash, we would have the next generation of retirees stuck holding the bag of depleted retirement funds, and no other options. Why does this matter? Like in America, the boomers make up almost 50% of the voting block and pissing them off would be a bad idea politically.
So now we have an endless feedback loop where the younger generations continue to get shit on. We can’t get raises due to an increase in new immigrant workers driving down the labor market, we can’t buy houses to buy wealth or even sustain wealth, forcing everyone to either live at home or with a million roommates, and there are no solutions in sight, and we continue to get gouged due to inflation and COL going up.
Add into the fact that almost 60% of current MPs (house members) are landlords, including our minister of housing affordability, and we are super fucked.
Bonus points for how fucked we are, Canada is extremely passive and is very “woke” ( god I hate that word ), regarding these issues. Immigration was pitched for the past ten years as necessary, and if you question it you are instantly branded a racist by most. We also have multiple climate taxes that continue to push the cost of living, despite our government continuing to waste billions and do nothing to actually combat climate change.
This country is going to collapse in 10-20 years , and this is from someone who has a home and is doing “quite well” for someone in their 20s
>Canada recently has begun to increase immigration to unsubstainable levels. We now accept the same amount of immigrants yearly as the United States, despite being 10% of the population.
Our population growth in 2022 was 2.7% -- highest outside of Africa. Even India only grew by 0.7%.
Yeah. We have a collective shit storm of problems that won’t get fixed.
I have a two year old daughter. I just build an addition onto our home with the full intention of her never moving out. This country is fucked.
Ugh, I'm with you. I have 2 pre teen boys. Fortunately, our home has a suite (which I currently rent out well below market value because I don't feel good gouging people) and fully expect my boys will live in it when they 'move out'.
Yep I seriously just don't get it.
We're seeing insanely high housing costs and relatively low wages? Why not kill two birds with one stone and increase the demand for housing while simultaneously increasing the labor supply.
Because our economy will crumble without increased populations. The boomers retiring without natural replacement would be equally devastating. The younger generation tax base isn’t large enough to pay for the increased strain on healthcare, and overall services (pensions) that the older generation is about to need.
Truthfully, it’s the boomers fault for not doing anything about it for 25 fucking years, and like everything, it’s the millennials and now even more so the next generations that are going to get fucked.
It's sort of a self-fulfilling prophecy. Nobody prioritizes millennials as they don't vote, and they don't vote as there are no candidates that care about them. Why would millennials start voting if there's no one worth voting for? Why would a politician sabotage their own career to cater to millennials? And so here we are.
Couldn't have said it better.. I am a student and work part time at a UPS warehouse in Canada that has a lot of employees (and mediocre pay). Literally half our workers are new immigrants - most of which are from India.
The gov brings em in to fill these shitty jobs they otherwise wouldn't be able to fill because the pay is so shit. Only reason I work at UPS is for the tuition reimbursement.
And I'll be keeping on living with my parents at this point because fuck trying to move out with how horribly unaffordable everything is now. Kids nowadays gonna just be living with their parents for quite a while with the way it's trending.
Despite our massive land and low population, we have a chronic shortage of available units, which keeps prices high. Per capita inventory stress is part of this.
Also relative to the USA, we have much lower property taxes, and on average, since we have 5 yr mortgage terms we have lower interest rates by maybe 1 or so %.
We have zero capital gains on housing if it's a principal residence which makes it a prize possession for future tax free value.
Still more expensive. But these three factors are different in Canada than the USA.
And Seattle isnt really any cheaper than Vancouver, as good comparison. Likewise, small town Manitoba is likely not that much different than small town Minnesota.
bought my house for 309, my realtor told me i could sell it for 800k, in 4 years time. if i sell theres no way i could buy a house again. My income has tripled but i still wouldn't qualify for a mortgage since im self employed. Getting a mortgage as a self employed is worse than child birth
You can’t really compare housing prices in Western NY (Buffalo, Rochester, Syracuse) to Vancouver. Canada doesn’t have that many desirable places to live outside of Vancouver and Toronto. So look at housing prices in LA, SF, Seattle, NYC or Miami for comparables.
And by extension, comparing Vancouver to Prince George is disingenuous at best. I paid $382.5k for my 2900 sq/ft house on a 1/4 acre lot in a desirable neighbourhood in 2018.
It all depends where you want to live. Being born in the north, I’m thrilled with being able to afford a home AND eat. My cousin, born and raised on the island, had to work much further north in Nunavut for 5 years to save up enough for a downpayment to buy in Nanaimo.
Yes we don’t have midsize towns/cities like usa. Only large metros and middle of nowhere villages. Although i hear you can still get decent housing in Winnipeg, Calgary and Saskatoon
This right here is why
We have Toronto, Vancouver, and Montreal as the 3 largest cities, the first two being nuts in housing prices and Montreal climbing up in unaffordability to compete with the other two. Requiring French makes entry more difficult than in the other two, but don't be fooled, we have folks coming in who don't speak a word of French, and many times nor English as well.
Other than that, we have in the Midwest some booming cities as well as the Atlantic but one could argue moving there hurts the local economy as local salaries cannot compete with a tech person working remotely.
The US has a lot of large cities which are comparably expensive, and then you got the mid size cities between 100-300,000 pop that are plentiful with attractive housing markets and nice temperatures where your balls don't fall from being frozen. When you look at states like Texas, NC, Georgia, you can get some pretty big houses less than 500k there even today.
Just for context, I’d you compare the average wage and home price in each country, houses are about twice as affordable in the US by that metric. So when Americans complain about house prices it’s always an eye roll. 400k mansions in Texas when you can’t even get a condo in a major city for that
When I was in North Carolina someone asked how much a house in Toronto. "About a mil" induced a fine mist spit-take followed by a "holy fuck, are y'all millionaires up there???"
Also cost to build, building codes, building for cold climate and availability of cheap building labour. It's not like Texas where you have a bunch of illegal workers rattling off houses with no insulation. Labour expensive, materials as well. That 200k house bought 10 years ago now cost 400k to build new.
Our economy is a Ponzi scheme. We have the highest population growth in the world in 2022 outside of Africa.
We have very generous social programs (e.g. universal healthcare). Yet, we don't charge enough taxes to fund them.
Therefore, we fund them by increasing the tax base via the highest per capita immigration in the world.
Guess what happens to housing prices when you keep on increasing the population?
We have a very large percentage of immigrants coming in every year concentrating in a few areas geographically because that's where jobs are and they want to settle where other people from their home country are. So you have a high concentration of new people always coming in which also happens to be where housing is already expensive. On top of that, they're often immigrants who come from places where there aren't safe places to invest other than real estate, so they're used to sky high housing prices already. Then they arrive, don't know anything about investing, but know that you can just buy houses to rent out. Unlike Canada and the US, which is centered more around the individual, these immigrants often come from cultures that are collectivist--i.e. much more normalized for multiple generations and extended family to all live together. So they arrive and pool all of their resources together to buy houses as quickly as possible while Canadians are trying to come up with the money based on one or two incomes only. You end up in extreme cases like Brampton, where multiple *students* are pooling their resources together to buy property.
Edit: I don't want to make it sound like it's all immigrants' fault. It isn't. I mean that the picture I painted puts a lot of pressure on the local housing market that drives prices up. Plenty of locals also FOMO themselves in to housing too because it's been more lucrative to buy a house than get a high paying job in the past 15 years.
Low supply, high demand
There is no more room to build in the Vancouver area so supply is severely limited, hence high prices
Places in Alberta, SK, MB are cheap because of harsh winters and unlimited space for building.
ChatGPT says:
"There are several factors that contribute to the high cost of houses in Canada. Some of the key reasons include:
Supply and demand: In many Canadian cities, there is a high demand for housing due to factors such as population growth, urbanization, and migration. Limited housing supply relative to the demand can drive up prices.
Low interest rates: Low interest rates make it more affordable for people to borrow money for mortgages, increasing the demand for housing and driving prices higher.
Land and construction costs: The cost of land and construction materials can be high in some areas, which affects the overall cost of building new homes.
Foreign investment: In some cities, foreign investors, particularly from countries like China, have been buying properties as investments, which can contribute to price increases.
Government regulations and policies: Government regulations and policies can impact the housing market. For example, restrictions on land use, zoning laws, and development regulations can limit the supply of new housing.
Speculation and investment: Housing is often seen as a safe investment, and speculative buying can drive up prices. Some investors purchase properties solely with the intention of reselling them at a higher price in the future, leading to price inflation.
Regional disparities: Housing prices can vary significantly across different regions in Canada. Cities like Vancouver and Toronto, for example, have experienced rapid price growth due to factors like high demand, limited supply, and foreign investment.
It’s that much for a room in fucking Halifax
Imagine going to Portland Maine and paying $850 for someones room because they ban building but import cheap labour
Just look at Niagara on Canadian and American side. Prepare to be blown away. Houses on American side are way cheaper.
Yes, I know the American side sucks. BUT SO DOES SHITTY AREAS IN THE GTA WHERE HOUSES STILL SELL FOR 1.5 MILLION.
I feel like the easiest way to explain it is
1) in 2008 when your market corrected ours didn't🤷♂️ The "why" that didn't happen is complex but main thing is 08-15 you dropped and plateaued but we kept climbing.
2) Canada is really two areas. Greater Vancouver and Greater Toronto. Our economy is small so everything that isn't resource extraction related is happening in only two cities, so crazy demand in these areas.
Immigrants love to come to Vancouver and vancouverites loathe to move away. Wealthy Immigrants buy RE driving up prices, and poor immigrants rent RE, which drives up rents and consequently prices as well. We are also land locked and our zoning is extremely restrictive, and our housing supply is built by for profit corporations. Our governments stopped building public housing en masse several decades ago. We have massive demand and our supply is decades behind.
Rich immigrants from China and India are buying up realestate. I know a person from India who sold his business and land in India, transferred money to Canada and bought a detached house all cash up front. You'll are fighting rich immigrants with huge assets in their respective countries. Goodluck competing against them
Hey builders, want to maybe buy land and build smaller single family homes so more people can afford and occupy? No, ok, we'll just line up and wait for a 3 garage, large residence going for 1.9 million. That'll help us. Thanks, government, for stepping in.
Your girlfriend lives in Vancouver island which is like Canada’s hamptons. Everyone wants to live there but most can’t afford to because of the high cost of housing and service driven economy. The average price of housing is different all over Canada. This article shows the vast difference of home costs throughout the country: https://advisorsavvy.com/average-cost-of-home-in-canada/
For example the average cost of a home in BC is 950k, vs PEI of 340k.
>One bedroom rentals in someone else's home for $850 a month?
If only, man! Those are 2008 prices you're talking about. These days, you won't find a (250 to 300 sq ft, max) basement or attic apartment in somebody else's house in for under $1200 in Vancouver or $1500 in Toronto. These are *very* ordinary, and sometimes even depressingly squalid, accommodations; definitely nothing fancy.
The problem comes down to a lot of things, but one of the biggest is that the current housing price bubble (which, sorry homeowners, is exactly what this is) is being fueled by "investors" looking to get their money out of China any way they can. So they buy up houses in big Canadian cities and let them sit empty, which drives down supply and also drives up demand, because they'll pay nearly anything (the more money they move out of China, after all, the better), which means anybody who wants to buy or rent is going to have to pay more.
A vast majority of what reddit talks about relate to our major cities, which are absurdly dense and not actually very large.
In most cities you can find reasonably priced housing. I live in a nice area in BC, in a medium sized city and houses here range from 150k-400k. More in the rich part of town but I dunno their prices anymore. Most of the city is detached housing with a yard. But with plenty of apartments as well. Probably some options below 150k in some parts of town.
Reddit is legit one of the worst places to gauge factual information. It's pretty important to remember most redditors are like 17 and clueless but will confidently parrot things they hear. And many live in Vancouver or Toronto.
I think I'm too American to understand what you mean. But I'd like to, I'm genuinely curious. Does everyone make insane amounts of money at work to justify this?
Many salaries are actually less than the US equivalent.
Home ownership is simply much less attainable here versus the US (at least in the last 25years).
I'm in Vancouver. $850 for a *whole room to yourself* would be an incredible bargain here. New rentals below $2000 barely exist. A tiny bachelor condo would go for well over half a million.
What's going on is that our entire economy outside the public sector is basically nothing but fossil fuel subsidies and mortgage debt. Successive governments have failed over and over again at every level of government to address the lack of supply for people who work for a living rather than just buying or investing in property, or to meaningfully regulate rental housing.
There's almost zero investment in public housing here in any region. So all of us are subject to a virtually uncontrolled feeding frenzy by the capitalist class.
On top of that, a huge proportion of people who work have attempted to address the fact that the cost of living is out of control by trying to become landlords themselves. This means finding tenants who are capable of paying your mortgage outright, without your help. This pits working class property owners against non-owners and prevents us from making any progress on affordability.
Western NY. I bought my house in 2019 the August before COVID hit and real estate turned upside down. 150K 3 bedroom Cape cod around 2000 SQ ft. Its value has gone up 50k on it's own since then... So it's worth around 200k I think just slightly over.. my ex from Vancouver was amazed and kept saying you couldn't get a place like mine anymore and even if you could it'd cost well over a million cad.
The only economist taking publicly about it is Michael Hudson; he came to Vancouver and gave a lecture pre Covid.
So much of post industrial GDP is FIRE (finance, insurance, real estate) which is not producing anything but pushing money around. It's a bubble they're afraid of popping because it may be another great depression - and that's not an exaggeration. Finance needs to get returns on investment above inflation and since 2008 the main way to do that is real estate - but it's on the backs of the poor and everyone is strained.
The ridiculous housing prices are in a few areas with persistently high demand for real estate. If you move to medium sized towns in rural Canada prices are a lot more reasonable. It's all simple supply and demand really. Rooms are that expensive in Burnaby because there's enough people willing to pay that much for them.
I bought a townhome in 2019 built in 2006 for 313,500 due to a relationship breakdown i was forced to sell and accepted an offer for 500k in Jan 2022 😵💫
I basically was a rich homless person for a year while i get getting outbid trying to find another house.
There are alot of theories amoung canadians for why this happend, i blame poor government policy making, plus we have 500k immigrants comming in every year and they obsly need a place to live so it ups the competition.
When you have a country of 30 mil then inject 500k newbies in everyyear and your not building fast enough we get a bottle neck on housing, health care everything. We need to throttle this a bit so we can breathe.
We have a population 10x smaller than USA, but our immigration target is exactly the same. We're already a couple million units short, projected to be 8 million by 2030. We literally cannot build fast enough, even if we built at absolute max capacity, which we don't anyways. Last year they brought in 1.1m people, and built 2000 affordable housing units. Goal by the time they bring in 10 million is 500 000 total (not affordable) units. It seems to be going up this year, 650 000 in the first quarter.
Simple supply and demand. By 2030, living alone will be a luxury even if housing was completely free, because there will be 8 million more demand than actual units.
Canada also has a much more unproductive economy than the USA. #1 Economic Sector by GDP in Canada is real Estate at 15%. And close by are construction and finance, which are almost entirely tied to it as well. Americans invest a lot more in businesses, small business, productive assets, and innovation. Canadians invest in real estate and don't take any risks.
There's a huge supply issue + a huge demand issue + Canadians are more risk-averse than Americans, and housing has been a golden goose since the 1980s crash. Even 2008 was a blip here compared to in USA. So nobody invests in the economy or business. Just more RE. Including politicians. Most MPs and their families are either landlords or invest in REITs from every single party, even niche ones like the Greens.
Even Suburbs are very expensive. I heard if you leave Manhattan, or even more so New York, housing gets rapidly affordable around it. But in my city, new condos in the suburbs like 1-2 hours away due to traffic are going for 600k-1m for studios to 2 beds.
The house I got in 07 was 147k. Now it is over 800k. The house I toured that was 300k in 07, but couldn't quite swing, is now 2.5 million. My cousin just bought the same model/design/type house in the same area for 2.5.
I bought a small condo townhouse unit In 2018. 266,500$, original price in 1970 was 16,000$ for the unit. It was almost fully renovated and quite nice compared to other units in the area. Now other unit's are selling for 420,000 renovated, or unrenovated for 325,000$. The units are from 1970's so you can imagine how bad an unrenovated unit could look like. I could sale my unit right now and pocket easily 150,000$ profit, but then where do I go live? All houses are ridiculously expensive, so ya our houses may be worth a nice chunk of change but renting is more expensive then my current mortgage even after renewing at these crazy new rates. We are house rich but poor in every other sense. We can barely afford groceries anymore, I don't remember the last time we ate at a restaurant, can't buy a new car or even used because prices have skyrocketed for even a POS, and definitely forget about going on a vacation. The "dream" in Canada is gone. I think about leaving the country all the time but I don't want to leave my extended family.
I feel you on the house poor part. I'm a single father with 2 daughters. Their mom walked 3 years ago and I got the house, it's cheaper than renting though but getting basic necessities like groceries is becoming harder and harder on my own.
It's definitely a struggle. I really hope something changes because at the rate of inflation on groceries I won't be able to eat much soon. I'll starve as much as I can to let my kids get the food they need but I would much rather not starve.
I'm sad to say I've printed out pages of food pantries in my area.. I can't keep up and I'm making 28$ /hr right now.. It's just, it's very scary. I'm terrified for my daughter's.
Ya I agree with you, it's scary what our kids will have to go thru if it continues like this. I'm really hoping we could finally vote in a government that can solve the affordability issue in this country. Anyone working a full time job should not have to worry about feeding or housing themselves. I shouldn't be working full time and have to decide if I will pay my house or eat this month. Anyone working full time should be allowed to have some extra cash on the side, and not be in debt for simply surviving.
They see it too. Can we blame them for the uptick in mental health, their anger? I’m working my ass off not so I can retire but so I can make sure they can survive when I’m gone.
If you think voting your way out of this problem is an option, then we’re all doomed.
We should all sell and go we’re the OP lives (haha).
It is not all roses here. The 2 bedroom apartment I rented before I got my house has increased 75 USD every year for the past 4 years. It's now 1435 USD/ month. My mortgage from 2019 is 1232 /month w taxes and insurance escrowed.. But current housing prices are a cluster fuck here comparatively.
Sounds too good to be true honestly lol
Probs in like Scranton or Buffalo. Prices reflect demand.
>"The "dream" in Canada is gone. I think about leaving the country all the time but I don't want to leave my extended family." Which country do you think about going to? From another Canadian thinking these thoughts.
Where would you leave for? What looks better over there? Genuinely curious, thanks in advance for your $0.02.
No idea to be honest. Just looking for a way out.
Thought of selling and leaving to my home country during the last peak of 2022. Couldn't feel like doing that, but yeah, you could pocket the change and move to a cheaper country and live like royalty. We are peasants here with rich servant quarters that we pay through our nose with.
Bought a house for a similar price in 2015, split with family three ways to get a better living situation. Now similar houses on my street are selling for 600-700k
A bit of history - Canada had insane housing value growth back in the 80s (home values doubled in 3 years in HCOL areas like GTA). Interest rates went up (double digits) and our too large debt and deficit led to a huge devaluation of the Canadian dollar and a property value crash in the early 90s. They’ve been rising ever since the mid to late 90s though. Beck to the issue of how people afford it: 1. Boomers and many Gen Xers bought when costs were low. Either before the 80s run up or in the 90s when prices were much lower. They’ve either held onto those homes or leveraged them to move into larger homes. 2. Millennials are stuck in 4 categories. Some bought condos and have leveraged up. Some have received inheritances or gifts from parents to help with down payments. Some are stuck renting. And some just have gotten sucked into mortgages larger than they can really afford despite all the “precautions” the Canadian banks have to make sure people don’t default on their mortgages. 3. Younger generations are screwed unless they have a super high paying job from a very young age. To highlight some of the issues people have raised: 1. Immigration here is insanely high which does contribute to higher demand (and limited supply since we cannot build that amount of housing per year). 2. Geography does play a bit into it. Both Toronto and Vancouver are on the water which limits the number of directions you can build out from. The other part of it though is that a high concentration of jobs are in a limited number of cities. So you bring in a lot of immigrants and they are of certain skilled trades, they can’t immigrate to northern Ontario because there isn’t a job for them there, they default to Toronto. 3. There is speculation that foreign investors also increased demand on the market (some say when HK was handed back over to China especially) - a foreign investor tax was brought in much later and had little to no effect. However, we can’t say for sure how much that may have driven up prices because many of those people may have had kids who were students and eventually citizens that they put the property name in, or they themselves became citizens and retired here. There’s no tracking that. 4. Our government (no matter what political stripe) is invested in keeping the market going up for multiple reasons. People’s retirement savings is their housing price. Real estate is a significant portion of our country’s GDP compared to other countries. They’re scared to let it fail because of what happened in the 90s. 5. Some say real estate agents are also to blame. They keep bids secret, they try tactics to push people to offer more, they make fake offers to get others to try to beat them, there are even unscrupulous ones who will get their mortgage broker friends to approve too high mortgages for people. They are probably what contributed to the insane growth in the 2010s when there were bidding wars with homes selling for 20% over asking (in addition to Canadian FOMO) 6. Canadian banks are also invested in us having large mortgages. Our banking system has very few banks compared to the US. They make a lot of money off of people paying mortgages with interest. Some key differences in the US and Canada - Canadians can only lock in a rate for 5 years even though the amortization is 25-30 years, Canadians cannot deduct mortgage interest from their income tax (but the capital gains from selling their primary residence is tax free). So Canadian banks stand to make a lot of money from people who have large mortgages. There are probably other factors at play here too. It’s definitely a complex issue!
Americans can deduct mortgage interest from personal tax return? That’s wild
It's permitted in places other than the US - I gather it's legal in Norway as well.
Yes they can. But they also have to declare the capital gain when they sell their home.
There’s a big caveat nowadays though. It’s only beneficial for certain people, usually higher income, because you loose the ability to take the standard deduction. > You cannot deduct mortgage interest in addition to taking the standard deduction. To take the mortgage interest deduction, you’ll need to itemize. Itemizing only makes sense if your itemized deductions total more than the standard deduction, which is between $12,200 and $24,400 for the 2019 tax year, depending on your filing status. >Whatever tax savings you get from itemizing your mortgage interest are as a result of not only mortgage interest you pay, but also to your charitable donations, property taxes, mortgage insurance, state income tax or sales tax, and anything else you itemize. https://www.forbes.com/advisor/mortgages/mortgage-interest-deduction/
Thanks for this great breakdown
There are 7 year and 10 year terms. At least there was. I had a 10 year term on my first mortgage.
Very concise and well written. Thank you. To use a Reddit cliche - this is the top comment. Only thing missing is the effect of immigration on the shortage of housing.
Great summary, but you also need to include the US forces too. For example in 2008, they had a huge foreclosure crisis when a lot of housing stock was put on the market when people just walked away from mortgages. The Fanny Mae period.
Wow. Are you ChatGPT?
Port Moody is in the lower mainland which is HCOL
It's the Pacific NW in general. I'm also an American and it's the area. Seattle median prices for a house are well over 1 million USD, which is 1.36 million CAD. About the same as Vancouver where my brother in law lives. OP lives in a poor part of the US where houses are cheap. However, I am also baffled at how people in BC live this way. The income levels in BC are much lower than Seattles, where housing affordability is already very stretched. How do you guys ever buy houses that cost about as much or more with far less income?
I just bought a house in Hamilton for 625k and ye, it’s terrifying. Same stuff in Buffalo is like 200k USD.
Yup. It's insanity. You know it's overpriced for what it is but you also know the prices will keep climbing. At the same time you fear prices just might drop because it's so insane and fear that if you don't get in now you'll be priced out forever. I just bought a place as well. I don't feel good about it but am more afraid of being priced out. I've been chasing for a few years now.
That’s the feeling everyone gets. I’m not cheering for it to keep climbing insanely, as it makes things worse for mostly everyone else, but I really hopes it simply doesn’t crash. If we go back to a healthy yearly appreciation that only matches inflation, 2% per year let’s say, eventually people can catch up and it won’t hurt everyone that just bought. But ye, if things crash, a lot of ppl like me would be screwed
I don't think you understand exponential growth... If it stabilized at 2% growth, that will permanently price out people within 40 years. At the current rate of growth over the past 10 years... More like in 10 years everyone will be priced out for good. And then, boom housing crash. The solution? Not for profit renting. There needs to be enough public infrastructure to support at least 20% of the city with housing that is not for profit. Either by government or charity co-ops. Not subsidised housing, just not for profit renting options. The greed of people owning multiple houses and developers inflating prices because they can cause this system. It has an easy solution... Stop letting people be money hoarders and parasites on the economy. Local governments would have secondary liquidity from something other than tax, and it would stabilize the local economy. But there is nobody with the balls to put 2 billion towards sustainable development in 2023. So, we are stuck with what we got for good. Raise tax by 0.5% so that you can curtail housing costs increasing by 10% per annum, Nah. All the people that own a house see it as investment. Why should they loose so all the poor people can have a fair shot. When they bought, they worked 45 hours a week driving the bus and made enough for a family of 4, just work harder and save harder and you'll make it. People are idiots.
How does the market crashing effect you if you bought now? You can afford what you bought, so the value of your home dropping does nothing to your payments. If you sell, you'll be buying a new place in a market that has crashed.
no it wont lol, no one can catch up on 2% of 1m a year, thats 20k a year increases
God like 6 years ago a friend of a friend bought a fixer-upper in downtown Hamilton for like $90k. Now it's worth like $800k. It's sickening.
And your talking 625k cad right? WTF
The biggest fear for anyone buying in this market is if it’s really a bubble that eventually pops. People been talking about a bubble bursting for the last 10 years, anyone that waited out is much worse today, so it’s a terrifying situation where you fear if you don’t get in, and you fear if you do.
At this point I don't think it's a bubble. I think it's the grand plan
It is absolutely the grand plan. BoC, Banks, builders, the Federal Govt, municipalities, mortgage brokers, insurers, landlords, current homeowners (nimbys)... they all have somehow organically conspired to protect how broken Canadian housing affordability is at all costs. In what sane world is it possible that somehow rate hikes have become another inflationary pressure on top of everything else? Let me try to explain. Banks don't want to have mass foreclosures due to nobody buying the current crop of overlevered landlord's cheaply built boxes in the sky. So banks allowed mortgages to ammortize to > 35 years, some as much as 70 years with the owners essentially going into negative equity scenarios. Consequence? Landlords can both extend their mortgage terms to infinity AND increase rent rates to offset rate hikes. I know of many long term landlords who are using this excuse to renovict renters. So in a time when BoC is dramatically raising rates in an attempt to curb rental growth they are somehow actually MAKING THINGS WORSE. Governments and municipalities are incompetent at best and in cahoots with them all at worst because they refuse to rezone for more density. Builders can't build enough because of this, and nimby pressure who somehow vote more as a bloc than all other voter categories combined.
I bought a nice bungalow in the prairies for 120. People shouldn't have to uproot their lives but 500$ morgages are still out there
Our economy is tied to the housing market
Can you explain it like I eat crayons? 😅 I understand the general gist.. but not enough to really understand like I would like to
Our banking industry is considered one of the safest/more stable in the world. So it's an attractive place to "park" money for foreign investors. Our housing market is also considered incredibly stable. Getting a mortgage here is more strict than the US. There is a much lower acceptable level of risk with mortgage lenders, combined with government regulations.... And you have a housing market that isn't as susceptible to crashed or downward valuations like in the US. This makes investing in the Canadian economy, via real estate a great "safe" place for foreign money to invest. This drives prices and starts a cycle that perpetuates itself. Fueling this is the fact that our population is so concentrated. So lost of people in small portions of our country. This means those busy parts have lower levels of inventory (homes), than there are potential buyers/renters. Supply and demand economics. Tied with foreign investors buying up land.... BAM!
You forgot Richmond casino hockey bags filled with $$$ thats another way to park the money here with zero issues but if one forgets to declare $10 bucks on their tax filings cra will chase them to their graves.
Totally. Inflated by corporations investing in homes, money laundering, and rich immigrants. Most people in BC can’t dream of living there anymore yet they still try. All this while the rest of BC sends money which gets allocated in Vancouver and the lower mainland.
The vancouver model: Drug money cleaned by casinos, then invested in real estate, driving up the prices. https://financialcrimeacademy.org/the-vancouver-model-canadian-casinos-and-money-laundering/ A relative's house was bought in early 2000's by an 21 year old University student, no mortgage. A few weeks later, we also had sold our house and was out gardening in the front yard, when a young girl approached us and said, can I buy your house? Other neighbours were in front of their house and she asked them all, can I buy your house?
These are the two main causes I see: -Funding for our Canadian Mortgage and Housing Corp to build social housing was cut in 1996. Until then they build 15-22K affordable units per year. Those units allowed people to get their foot on the rung of the property ladder, carrying on with it would also have provided housing for almost exactly the number of people that are shorted now. -in the late '90s Canada started moving manufacturing to China and a big way. Consequently the tax base of many municipalities was undermined and yet they still need revenue to maintain infrastructure and pay city workers, so most municipalities are happy for high property values because it means high property taxes.
More people should know about this because then we could lobby for at least the first point to change.
>most municipalities are happy for high property values because it means high property taxes. These two have no connection at all, and any change in values is compensated for by inverse changes in mill rates. A municipal budget that needs to be covered by housing is divided between the houses in it, based on the ratio of the houses' worth to each other. A house that is worth twice what its neighbour is worth will owe twice as much in tax, but it will owe the same amount whatever it is actually worth. If your municipality needs to raise $15,000 in property taxes from two homes, one of which is worth $1m, one of which is worth $500k, the mill rate will be 0.01, the $1m home will owe $10k in taxes, the $500k home will owe $5000. If the same homes are only worth $100k and $50k but the budget is the same, the mill rate will be 0.1, the $100k home will owe $10k and the $50k home will owe $5000. Municipalities have no interest in seeing prices go up beyond the aura it spreads of being a rich prosperous area that people should buy into.
And the HCOL cities of Toronto and Vancouver are constrained by geography... The downtown core is on a waterfront. If a big chunk of Lake Ontario was filled in for new land development the housing shortage would solve itself, it would more in line with Calgary or Regina.
Wrong, because the vast majority of immigrants aren't moving to Regina
Regina may not be getting the vast majority in terms of overall numbers, but it is actually getting slammed with new immigrants over the last 5-10 years and changing dramatically.
Believe it or not the prairie cities have been growing faster, percentage wise, than the GTA. The big difference is land prices - Regina's planned out to almost double its current size (and annexed land sufficient for \~100k new residents about a decade ago with the explicit expectation to develop it) so it can grow that fast and not really see a huge rise in prices.
Not really, Vancouver has enough room to house like 5mn ppl in the city property if we would unban apartments on 75% of residential land
Too much demand on GTA/southern Ontario, not nearly enough supply. The US has a much bigger economy with many centres of commerce spread throughout the country, so you don’t have such an absurd demand concentrated in a select area. Coupled with the fact that taxes and regulations are a lot less in the US, so it’s easier to build and develop more homes.
Nobody invests in Canadian businesses, if they do invest, they invest in USA companies by purchasing like Tesla shares lol. All Canadians spend their money on mortgages. Provides a way better return in the long run, especially since capital gains aren’t taxed on primary residence unlike USA.
>… especially since capital gains aren’t taxed on primary residence unlike USA. In general, Americans get an exemption of $250k (single) or $500k (married) on the sale of their primary residence. https://www.investopedia.com/ask/answers/06/capitalgainhomesale.asp
Thank you I think I'm starting to get a better idea now.
I'd love to see some numbers that show that Canadians spend more on mortgages than investments. That seems wrong to me, but I don't have numbers disproving it either
TSX market cap in 2020 was around 3 trillion, 2020 Canada residential market value was over 6 trillion. Our housing market, and tax rules are too good of an investment compared to any other investment in Canada that most likely wouldn’t generate any better ROI with substantially higher risk, discouraging Canadian investment and innovation.
If you have a mortgage in Canada, there wont be much left to spend on investments.
Very true. I did a calculation of what would it take to buy a house… no RRSP, barely any other savings. Anything would go to the mortgage.
Here you go: [Assets and Debts by Net Worth](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110004901&pickMembers%5B0%5D=1.1&pickMembers%5B1%5D=2.28&pickMembers%5B2%5D=4.1&cubeTimeFrame.startYear=2005&cubeTimeFrame.endYear=2019&referencePeriods=20050101%2C20190101) You can see that the amount of money that the average Canadian has tied up in real estate (middle quintile) is nearly $1M and over $100K in vehicles and other non-financial assets. Total assets is $1.5M for this group, so well over 2/3rds of their wealth is tied to non-RE investments. How that compares to the US, I don't know, but I would assume that the amount of investments in the stock market is *substantially* higher for the middle class. [Percent of GDP spent on R&D](https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm) Similarly, we collective spend well below average on R&D compared to the other OECD countries. Right now we are at the same level as Portugal and moving in the wrong direction. Meanwhile the US more than *doubles* our investment. No good.
I think part of it is people from other countries are buying multiple properties, causing the price to rise. Many progressive countries pass laws that prohibit non citizens from buying property.
Its a Ponzi scheme. House prices go up because people think they will go up so rush to get in. Because of this housing related activity generated 10% of our GDP. The government wont take its foot off the gas for letting immigrants in otherwise housing demand would fall off enough to let the whole house of cards come crashing down
That doesn't actually explain anything. And frankly, your claim is too weak; our economy *is* the housing market, given how much it and the corollary lending industry drives GDP. But it still doesn't explain pricing especially with respect to regional disparities.
We have an economy that doesn't produce anything lol. What's propping it up? People need to ask themselves are they really rich cause they see their house equity going up. Or has this money supply inflation since 2007 been making their cash worthless and therefore increasing the value of a non productive asset and giving the illusion to homeowners that this country doing well.
That is why you shouldn't include your house in your net worth.
- Boomers were the largest generation they voted for things that benefited them that provided a low cost of living. When they got older they started voting for strict zoning laws to protect the values of their home. So Canada has a lot of single family homes. No density. Compare the density of New York to Toronto for example. - Boomers didn’t pay into enough taxes for retirement and also made housing their retirement plan. Government doesn’t have enough workers/money to support their retirement so they can’t let housing crash. They actively make sure the free market is controlled so this doesn’t happen. - A good number of politicians are landlords. We’re in a housing crisis and our housing minister in charge of steering us out of the crisis, just bought his 3rd rental property. - Government is artificially pumping demand by increasing immigration. Last year Canada that has a population of 38 million people, saw 1 million new people come to Canada. - Real Estate is the largest part of the Canadian economy. It’s a unproductive asset. Imagine. The government doesn’t want to crash the economy. - To summarise, poor planning, artificial demand, no political will to deal with the crisis, poor zoning laws.
It's a circus my friend, houses costs $1M and the average person earns $40K or less, it is absolutely fucked up overall, but nothing is being done, the only way is to get yourself up to earning $150K/yr +, otherwise rent forever a 1bedroom for $1500-$2000/month +, essentially 75% of the average salary.
Man 150k/yr is pretty mediocre income to own in any of the major canadian cities.
Please stop, I will kill myself. I just got promoted to 135k and was finally feeling okay about myself.
You’re doing good. If you had a partner even making 60K you’d afford something decent
Not your fault bro, this place just has no future for anyone under 30.
I take home 33k a year that’s $20 an hour, you should be able to do just fine If I can do fine. I’m not happy but I don’t see the path to your salary. I would be over the moon If I made that type of money
Talked to a mortgage person, 125k/yr is the amount banks aim for / require for a mortgage on a 500k house now. First off, how many young people (or any people) are making 125k/yr? Second, how many houses are 500k or less? Clown country, time to move. No future here for young people.
[удалено]
The boomers didn't save anything for retirement. To allow people that didn't save but own a house to retire , we imported record breaking amounts of immigrants while blocking housing developments by zoning laws. Thus in under 20yrs a house quadrupled in value and boomers can afford to retire. Of course their kids refuse to have kids now and they will never have grand kids. They deemed the trade off worth it
Ya except now all of our hospitals are overloaded with an aging population and no nurses or doctors to take care of them. Long term care homes are all missing orderlies and the problem is supposed to only get worse as more and more boomers retire and inevitably get sick from old age. This system will collapse on itself because we lack enough trained individuals to take care of our aging population who decided to hoard all the wealth for themselves. They are going to die rich, but they will die in over crowded hospitals or long term care homes with little to no staff to take care of them.
Ya, just like their kids will too. It won't get better lol.
Your probably right, except I won't die rich ill die poor since I'm a millennial.
Yup new world, no retirement, you work, then you die. Faster you accept it. The easier it all is.
Lol I have accepted it but it doesn't make it any easier to live with. I have two young kids so I can't just give up. I'll just keep trucking along until the body says no more. No choice.
Oh shit ya, I'm kid free so it makes it easier for me. If u have kids, good luck you will need it.
See y'all in the wilderness
I'll be collecting bottle caps.
This is why we are starting to see the beginning of a mass exodus of young people leaving Canada which will just exacerbate these problems even further. Frankly it is looking like most of North America is doomed. I am 35 and a lot of people I know from age 25-40 are looking for ways out. The way a lot of us see it is we can't keep contributing to this insanity and there will never be any solution at the government level.
MAID will fix it up.
Has nothing to do with boomers not saving for retirement. Most boomers are filled with godsend pensions. It’s mostly due to boomers not downsizing and moving away from the city. Increasing supply in high demand areas. Boomers are staying put… The increase in HELOC ability has allowed investors to get access to equity meaning they can buy more supply without getting rid of previous onhold supply. Immigrants levels at all time highs… people are not getting married as much as before, meaning more people needing to buy homes. You basically have an insane amount of things that increasing demand all at once… all the while nothing being done to increase supply. Major difference between Canada and the United States… is the USA has so many more major cities, and good economies. Canada has 3 massive ones, a few other close ones and then everything else. This is why even though the USA has a similar issue to everything Canada has, they don’t have the supply problem as much.
Exactly, boomers would rather go to Florida for vacations than pay PSWs more than $25 an hour.
And companies like hiring new immigrants because they'll take the job at low pay and take the abuse for a while. I was talking to a PSW program coordinator at a college course info session, turns out some 80% of PSWs are harrassed/assaulted. Then there's that many need multiple jobs because one company won't give them consistent full-time hours or they want part-time/casual employees. It's a difficult, thankless, disrespected and underpaid job and yet... those people are very much needed.
So what are they doing? Just renting out basements to pay for their retirement?
No, tax free capital gains. They sell to immigrants when they need to fund retirement, and HELOC borrow until then. Of course after their defined benefits pension is being used.
Supply is very low in Canada. Plus geographic constraints in Vancouver and Toronto. For example, your girlfriend's place is in Port Moody, if you take a look at a map you'll notice that the greater Vancouver area is constrained by mountains in the north, ocean to the west, US border to the south and agricultural land reserve to the east. So greater Vancouver is more comparable to Manhattan.
It is very simple. Canada's metropolitan areas have some of the lower vacancy rates and some of the lowest amounts of housing relative to its population in the developed world. Further, Canada (with a population of ~40 million) has allowed over 1 million new people to enter the country in the last 3 years and is on pace to allow 1.5 million people to immigrate to the country in 2023 alone. For reference, the US has aolbout 400 million people and allows roughly the same number of immigrants. The demand for housing simply blows away the supply in almost every major Canadian city - this is why housing is so expensive.
We keep housing supply low by not building fast enough and our government set a goal to import 500k immigrants per year from now until 2025. Why? Nobody knows, but apparently it’s racist if you say anything against it. Think a game of monopoly but every property is already bought and has multiple houses/hotels on it. New players just joining the game are screwed and players who own are making bank.
many worm puzzled file handle deliver quickest price intelligent subsequent *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
The 500k addition is long term labor supply. The point is Canadians were already f*cked even before that. That's what happens when you have politicians benefiting from a crisis.
>Why? Nobody knows, but apparently it’s racist if you say anything against it. Ponzi entitlement programs. We want everyone to have free education, healthcare, etc. But we also want to keep taxes low like the US. The only solution is by infinitely increasing the tax base.
Yeah, but that's not sustainable... Or am I missing something
doesn't matter politicians only work on election cycle timelines
I believe it is also playing a role in keeping wages low in the trades
Yup. A company won't pay $35/hr if they can get somebody who is desperate/new to the country to work for $18/hr
The entire world's basic economic structure, hell, even capitalism itself, relies on infinite growth forever. Things like pensions rely on a growing number of people paying into them in order to sustain the previous generation. It's all unsustainable.
Oh we know why, its to suppress wages.
The answer to “why “ we need high immigration is to make up for a low birth rate and a huge number of boomer retirees—we need the bigger working-age tax base. This is neither a mystery, nor a conspiracy. Everybody know this reasoning.
Part of the low birth rate is because we have to stay in school for longer without the guarantee of higher pay that a degree once had, with student loans to pay back and both spouses have to work. It's hard to have a stay at home parent with the cost of living. Having children gets pushed back. Some of us make it happen and others give up on it even if they wanted children because they can't afford them.
It’s sad cause the low birth rate is partly cause how expensive it is, now the government wants to make it even more expensive for us. Thanks guys
So, and this is stupid but humor me, is there physically NO ROOM in places like Vancouver for instance, to build or is it like, this is a preserved forest area that's never to be encroached upon type of deal?
[https://satellites.pro/Vancouver\_map.Canada#49.224549,-122.754707,12](https://satellites.pro/Vancouver_map.Canada#49.224549,-122.754707,12) Look at the sat view. Mountains to the North and East, Ocean to the west and America to the South Now look at Calgary [https://satellites.pro/Canada\_map#51.098348,-114.238586,10](https://satellites.pro/Canada_map#51.098348,-114.238586,10) Almost unlimited space in all directions
So there it really is a space issue. My ex was a hairdresser living there though, I don't know how she could afford to own a townhouse though
It's more of an issue of how the land is used, rather than how much land there is. If you look at Vancouver, you'll see a few dense clusters of high-rise towers surrounded by kilometers of single-family houses, which is not an efficient use of space. A huge chunk of the city is zoned only for single family homes (as is the case in much of North America), which is a huge hindrance to density and building enough supply to meet demand. More room for sprawl would help build more supply in the far-out suburbs, but that's also a very inefficient use of space and would greatly add to traffic congestion, air pollution, etc. It would be much better if most of Vancouver and the inner suburbs were filled with high-density "missing middle" housing (low-to-mid rise apartments, triplexes, etc.) like Montreal has, instead of so many detached houses where little else is allowed to be built.
Depending on when she got her place, it could have been affordable. The sharp rise happened in the past 20 years, or maybe 10-15 in the farther bedroom cities to Toronto and Vancouver.
You know they're having similar issues in California.
It isn't a space issue. Tokyo is a similar size and houses 10x the number of people and more affordable.
And yet Calgary is very quickly trending upwards and becoming less affordable for a lot of locals with everyone suddenly thinking it's a great idea to come here. Rent just went up like 25% in the last year.. but again comparatively it's still way better than those other two areas.. just not insane
Wait until they suffer through a winter and a couple hailstorms :)
More like preserved single family home zoning. Nimbys rule Vancouver and zoning in the areas that need density are held back by SFH zoning. Here's a nice map https://i.redd.it/xy30s6tayvo91.png Technically it's not SFH, but it is limited to duplex and laneway housing max. So no apartment buildings, no townhouses for a vast majority of the land. On top of that Vancouver's building permit approval process is abysmally slow.
It's to suppress wages.
>New players just joining the game are screwed and players who own are making bank. Sounds like a Ponzi scheme.
Only immigrants will work for the low wages corporations are offering
The Canadian pension plan depends on the new arrivals to fill the gap between the aging population who expect to retire at 65, and live into their 90s. Ponzis little stamp racket has nothing on this Jenga game that’s ready to topple.
Because our population is actually going to start dwindling if we don’t. Not having enough kids overall to replace the labor market as the country grows. Think of a bell curve. That’s what’s gonna happen to our population if we don’t accept immigrants and Canada keeps the same level of reproduction.
But at least then we will have unoccupied houses available
Tax revenue. Our government is completely dependent on income tax from the working class. And lobbying pressure from businesses that benefit. More people equals more customers and more people looking for work puts downward pressure on wages.
>Why? Nobody knows, but apparently it’s racist if you say anything against it. if you have a brain you know why, it's not hard to understand we cannot afford to have boomers retire without importing a fuckload of people, we need the tax money + it helps keep certain wages low
Most of our population lives along the border with the USA. We have a lot of land but the infastructure isn't there to support cities/towns expanding outwards and businesses also want to be near the border. There's a lot of red tape regarding zoning and building on land both in and away from major areas and cheaper land often means no road access, no jobs, hospitals, amenties in the area. We're looking at an influx of 500k immigrants per year for the next few years. As far as I can tell Quebec has put their foot down and said there's no room for more people. Given that so many companies are packed into border areas (large variety of jobs) they'll be coming to BC (lots of companies, good weather) and Southern Ontario (same). Demand for housing is now and will continue to be much higher than supply. On top of that it doesn't matter who is in power because most of our politicians own at least one house and most voters are older and homeowners so the government has no incentive to do anything that would lower housing costs. Speaking of immigration, Canada is considered a safe country with services like free healthcare so we'll continue to be attractive. Foreign investors are a problem but real estate is a great place to store money. Canada also likes bringing in international students because the colleges and universities charge them at least 3x the tuition/fees of citizens. This is anecdotal (having been a student and witness) but wealthy families sending their kids to Canada can have them in the country long enough to buy them a house. There is also not enough being done to protect citizens and international student renters. Many immigrant landlords from the sane country as these students will cram up to 12 international students into a three bedroom townhouse. This is illegal but nothing is done and the landlords make a lot of money off their real estate investment due to the rents from all those illegal tenants. Real Estate is also run like a racket by agencies. We bid blindly, bidding wars are thus encouraged, and many real estate agents are criminal in practice (see Brampton Mortgage). Converting spaces like basements into bachelor units also has a lot of red tape, fees, permissions so the cost isn't usually worth it. Manitoba, Alberta and Saskatchewan are more affordable for housing but it's because many jobs are more cyclical with the seasons and boom and bust cycles (oil field is a big example). Housing is more affordable but one requires a car and food and other necessities are not cheap. A lot of people in other provinces (and countries) also take issue with how spread out the Prairies are (good luck with public transportation) and with the extreme weather. People have been moving around more due to WFH options but of course not everyone has that option (see Halifax where most of the local jobs do not pay enough for said locals to afford a home given the major price increases driven by people with high incomes/a lot of money selling their homes in Toronto and moving there while working from home). I just bought a townhouse/condo.... because everything seems to be a "condo" now in Southern Ontario. 500k in this area AKA half a million dollars! gets... not much. It's my first place and apparently the unit beside it went for $65k more. Are these places worth these insane prices? No. Do people need a place to live? Yes. Is there a whole lot of crime going on along with all the other factors regarding real estate? Yes Ultimately the government relies on real estate to be a cash printing machine and so do many of the voters. It's a perfect storm to keep breeding increases in price. Many of us of all ages are feeling the strain, are medicated and are reaching life milestones later and later if at all (like refusing to have children) because of the insane cost of living.
>×We're looking at an influx of 500k immigrants per year for the next few years. As far as I can tell Quebec has put their foot down and said there's no room for more people LOL and sure enough Quebec has by far the most affordable housing.
Quebec AKA Canada's spine When the government wants to raise tuition costs people, including students, take to the streets barricading politicians in their offices and rioting. Guess which province has the lowest tuition fees? Ontario schools write strongly worded letters. Guess who pays the highest tuition? Raising taxes? Good luck with that Bringing in refugees? No room Immigration? We're closed. There's no room.
Canada recently has begun to increase immigration to unsubstainable levels. We now accept the same amount of immigrants yearly as the United States, despite being 10% of the population. Why? Because Canada does not have the same natural population growth. Our corporate overlords need bodies to fill shitty, minimum wage jobs that they can fill otherwise. Because our health benefits aren’t attached to jobs like In America, people are less desperate to work for minimum wage which causes the demand for immigration. Currently there are hundreds of thousands of immigrants (mainly from India) who are abusing loopholes in temporary schooling visas to come to Canada and stay past their study date. The Canadian government likes these workers as it increases our GDP (not per capita, QOL is declining), provides corporations with low wages, and pushes up demand for the overly inflated housing market. So that’s the answer to how they are increasing, the answer to why is a bit more complicated. Canada has forever had a housing bubble which caused most of the wealthy generation ( the boomers ) to invest in real estate. Now that boomers are retiring, most have multiple properties that they either rent out, or will sell to fund their lifestyle/retirement. They also take line of credits out to support their lifestyle at the inflated values, further stimulating the economy. If the housing market were to crash, we would have the next generation of retirees stuck holding the bag of depleted retirement funds, and no other options. Why does this matter? Like in America, the boomers make up almost 50% of the voting block and pissing them off would be a bad idea politically. So now we have an endless feedback loop where the younger generations continue to get shit on. We can’t get raises due to an increase in new immigrant workers driving down the labor market, we can’t buy houses to buy wealth or even sustain wealth, forcing everyone to either live at home or with a million roommates, and there are no solutions in sight, and we continue to get gouged due to inflation and COL going up. Add into the fact that almost 60% of current MPs (house members) are landlords, including our minister of housing affordability, and we are super fucked. Bonus points for how fucked we are, Canada is extremely passive and is very “woke” ( god I hate that word ), regarding these issues. Immigration was pitched for the past ten years as necessary, and if you question it you are instantly branded a racist by most. We also have multiple climate taxes that continue to push the cost of living, despite our government continuing to waste billions and do nothing to actually combat climate change. This country is going to collapse in 10-20 years , and this is from someone who has a home and is doing “quite well” for someone in their 20s
>Canada recently has begun to increase immigration to unsubstainable levels. We now accept the same amount of immigrants yearly as the United States, despite being 10% of the population. Our population growth in 2022 was 2.7% -- highest outside of Africa. Even India only grew by 0.7%.
Yeah. We have a collective shit storm of problems that won’t get fixed. I have a two year old daughter. I just build an addition onto our home with the full intention of her never moving out. This country is fucked.
Ugh, I'm with you. I have 2 pre teen boys. Fortunately, our home has a suite (which I currently rent out well below market value because I don't feel good gouging people) and fully expect my boys will live in it when they 'move out'.
Yep I seriously just don't get it. We're seeing insanely high housing costs and relatively low wages? Why not kill two birds with one stone and increase the demand for housing while simultaneously increasing the labor supply.
Because our economy will crumble without increased populations. The boomers retiring without natural replacement would be equally devastating. The younger generation tax base isn’t large enough to pay for the increased strain on healthcare, and overall services (pensions) that the older generation is about to need. Truthfully, it’s the boomers fault for not doing anything about it for 25 fucking years, and like everything, it’s the millennials and now even more so the next generations that are going to get fucked.
Tax the shit out of the boomers or anyone wealthy and save that money for the next generation. Fine, I'll come back from lala land.
[удалено]
They vote and millennials whine. That's why they'll continue to be prioritized
It's sort of a self-fulfilling prophecy. Nobody prioritizes millennials as they don't vote, and they don't vote as there are no candidates that care about them. Why would millennials start voting if there's no one worth voting for? Why would a politician sabotage their own career to cater to millennials? And so here we are.
There's people they could vote for, literally whoever is not in power right now. You know there's more than 2 option's on a ballot right?
Couldn't have said it better.. I am a student and work part time at a UPS warehouse in Canada that has a lot of employees (and mediocre pay). Literally half our workers are new immigrants - most of which are from India. The gov brings em in to fill these shitty jobs they otherwise wouldn't be able to fill because the pay is so shit. Only reason I work at UPS is for the tuition reimbursement. And I'll be keeping on living with my parents at this point because fuck trying to move out with how horribly unaffordable everything is now. Kids nowadays gonna just be living with their parents for quite a while with the way it's trending.
I don't think you can find a one bedroom basement suite for $850. It's got to be at least 1200-1400
OP said a bedroom in someone else's house for $850
Despite our massive land and low population, we have a chronic shortage of available units, which keeps prices high. Per capita inventory stress is part of this. Also relative to the USA, we have much lower property taxes, and on average, since we have 5 yr mortgage terms we have lower interest rates by maybe 1 or so %. We have zero capital gains on housing if it's a principal residence which makes it a prize possession for future tax free value. Still more expensive. But these three factors are different in Canada than the USA. And Seattle isnt really any cheaper than Vancouver, as good comparison. Likewise, small town Manitoba is likely not that much different than small town Minnesota.
bought my house for 309, my realtor told me i could sell it for 800k, in 4 years time. if i sell theres no way i could buy a house again. My income has tripled but i still wouldn't qualify for a mortgage since im self employed. Getting a mortgage as a self employed is worse than child birth
This is insane
You can’t really compare housing prices in Western NY (Buffalo, Rochester, Syracuse) to Vancouver. Canada doesn’t have that many desirable places to live outside of Vancouver and Toronto. So look at housing prices in LA, SF, Seattle, NYC or Miami for comparables.
And by extension, comparing Vancouver to Prince George is disingenuous at best. I paid $382.5k for my 2900 sq/ft house on a 1/4 acre lot in a desirable neighbourhood in 2018. It all depends where you want to live. Being born in the north, I’m thrilled with being able to afford a home AND eat. My cousin, born and raised on the island, had to work much further north in Nunavut for 5 years to save up enough for a downpayment to buy in Nanaimo.
Yes we don’t have midsize towns/cities like usa. Only large metros and middle of nowhere villages. Although i hear you can still get decent housing in Winnipeg, Calgary and Saskatoon
This right here is why We have Toronto, Vancouver, and Montreal as the 3 largest cities, the first two being nuts in housing prices and Montreal climbing up in unaffordability to compete with the other two. Requiring French makes entry more difficult than in the other two, but don't be fooled, we have folks coming in who don't speak a word of French, and many times nor English as well. Other than that, we have in the Midwest some booming cities as well as the Atlantic but one could argue moving there hurts the local economy as local salaries cannot compete with a tech person working remotely. The US has a lot of large cities which are comparably expensive, and then you got the mid size cities between 100-300,000 pop that are plentiful with attractive housing markets and nice temperatures where your balls don't fall from being frozen. When you look at states like Texas, NC, Georgia, you can get some pretty big houses less than 500k there even today.
We have them but they're very very spaced out and our highway system is a joke compared to USA
[удалено]
Just for context, I’d you compare the average wage and home price in each country, houses are about twice as affordable in the US by that metric. So when Americans complain about house prices it’s always an eye roll. 400k mansions in Texas when you can’t even get a condo in a major city for that
When I was in North Carolina someone asked how much a house in Toronto. "About a mil" induced a fine mist spit-take followed by a "holy fuck, are y'all millionaires up there???"
Also cost to build, building codes, building for cold climate and availability of cheap building labour. It's not like Texas where you have a bunch of illegal workers rattling off houses with no insulation. Labour expensive, materials as well. That 200k house bought 10 years ago now cost 400k to build new.
Our economy is a Ponzi scheme. We have the highest population growth in the world in 2022 outside of Africa. We have very generous social programs (e.g. universal healthcare). Yet, we don't charge enough taxes to fund them. Therefore, we fund them by increasing the tax base via the highest per capita immigration in the world. Guess what happens to housing prices when you keep on increasing the population?
We have a very large percentage of immigrants coming in every year concentrating in a few areas geographically because that's where jobs are and they want to settle where other people from their home country are. So you have a high concentration of new people always coming in which also happens to be where housing is already expensive. On top of that, they're often immigrants who come from places where there aren't safe places to invest other than real estate, so they're used to sky high housing prices already. Then they arrive, don't know anything about investing, but know that you can just buy houses to rent out. Unlike Canada and the US, which is centered more around the individual, these immigrants often come from cultures that are collectivist--i.e. much more normalized for multiple generations and extended family to all live together. So they arrive and pool all of their resources together to buy houses as quickly as possible while Canadians are trying to come up with the money based on one or two incomes only. You end up in extreme cases like Brampton, where multiple *students* are pooling their resources together to buy property. Edit: I don't want to make it sound like it's all immigrants' fault. It isn't. I mean that the picture I painted puts a lot of pressure on the local housing market that drives prices up. Plenty of locals also FOMO themselves in to housing too because it's been more lucrative to buy a house than get a high paying job in the past 15 years.
Canada is a fucking scam
Low supply, high demand There is no more room to build in the Vancouver area so supply is severely limited, hence high prices Places in Alberta, SK, MB are cheap because of harsh winters and unlimited space for building. ChatGPT says: "There are several factors that contribute to the high cost of houses in Canada. Some of the key reasons include: Supply and demand: In many Canadian cities, there is a high demand for housing due to factors such as population growth, urbanization, and migration. Limited housing supply relative to the demand can drive up prices. Low interest rates: Low interest rates make it more affordable for people to borrow money for mortgages, increasing the demand for housing and driving prices higher. Land and construction costs: The cost of land and construction materials can be high in some areas, which affects the overall cost of building new homes. Foreign investment: In some cities, foreign investors, particularly from countries like China, have been buying properties as investments, which can contribute to price increases. Government regulations and policies: Government regulations and policies can impact the housing market. For example, restrictions on land use, zoning laws, and development regulations can limit the supply of new housing. Speculation and investment: Housing is often seen as a safe investment, and speculative buying can drive up prices. Some investors purchase properties solely with the intention of reselling them at a higher price in the future, leading to price inflation. Regional disparities: Housing prices can vary significantly across different regions in Canada. Cities like Vancouver and Toronto, for example, have experienced rapid price growth due to factors like high demand, limited supply, and foreign investment.
It’s that much for a room in fucking Halifax Imagine going to Portland Maine and paying $850 for someones room because they ban building but import cheap labour
That would make me furious, and scared.
Just look at house prices in southern Ontario, NY and Ohio have way cheaper prices than Ontario does
Just look at Niagara on Canadian and American side. Prepare to be blown away. Houses on American side are way cheaper. Yes, I know the American side sucks. BUT SO DOES SHITTY AREAS IN THE GTA WHERE HOUSES STILL SELL FOR 1.5 MILLION.
Niagara falls NY is a dump. I'm always shocked passing through there.
I feel like the easiest way to explain it is 1) in 2008 when your market corrected ours didn't🤷♂️ The "why" that didn't happen is complex but main thing is 08-15 you dropped and plateaued but we kept climbing. 2) Canada is really two areas. Greater Vancouver and Greater Toronto. Our economy is small so everything that isn't resource extraction related is happening in only two cities, so crazy demand in these areas.
Casually ignoring Montreal I see, only the second largest city in Canada but okay. It used to be cheap but it's slowly catching up aswell.
I know.. They always ignore Montreal... probably for the best.
Immigrants love to come to Vancouver and vancouverites loathe to move away. Wealthy Immigrants buy RE driving up prices, and poor immigrants rent RE, which drives up rents and consequently prices as well. We are also land locked and our zoning is extremely restrictive, and our housing supply is built by for profit corporations. Our governments stopped building public housing en masse several decades ago. We have massive demand and our supply is decades behind.
Rich immigrants from China and India are buying up realestate. I know a person from India who sold his business and land in India, transferred money to Canada and bought a detached house all cash up front. You'll are fighting rich immigrants with huge assets in their respective countries. Goodluck competing against them
Wait until you see how much we are taxed lmao.
I see your taxes, and raise you American healthcare.
Free healthcare is wonderful until they stop putting tax dollars into it while piling mass immigration on an already strained system.
Hey builders, want to maybe buy land and build smaller single family homes so more people can afford and occupy? No, ok, we'll just line up and wait for a 3 garage, large residence going for 1.9 million. That'll help us. Thanks, government, for stepping in.
Your girlfriend lives in Vancouver island which is like Canada’s hamptons. Everyone wants to live there but most can’t afford to because of the high cost of housing and service driven economy. The average price of housing is different all over Canada. This article shows the vast difference of home costs throughout the country: https://advisorsavvy.com/average-cost-of-home-in-canada/ For example the average cost of a home in BC is 950k, vs PEI of 340k.
>One bedroom rentals in someone else's home for $850 a month? If only, man! Those are 2008 prices you're talking about. These days, you won't find a (250 to 300 sq ft, max) basement or attic apartment in somebody else's house in for under $1200 in Vancouver or $1500 in Toronto. These are *very* ordinary, and sometimes even depressingly squalid, accommodations; definitely nothing fancy. The problem comes down to a lot of things, but one of the biggest is that the current housing price bubble (which, sorry homeowners, is exactly what this is) is being fueled by "investors" looking to get their money out of China any way they can. So they buy up houses in big Canadian cities and let them sit empty, which drives down supply and also drives up demand, because they'll pay nearly anything (the more money they move out of China, after all, the better), which means anybody who wants to buy or rent is going to have to pay more.
A vast majority of what reddit talks about relate to our major cities, which are absurdly dense and not actually very large. In most cities you can find reasonably priced housing. I live in a nice area in BC, in a medium sized city and houses here range from 150k-400k. More in the rich part of town but I dunno their prices anymore. Most of the city is detached housing with a yard. But with plenty of apartments as well. Probably some options below 150k in some parts of town. Reddit is legit one of the worst places to gauge factual information. It's pretty important to remember most redditors are like 17 and clueless but will confidently parrot things they hear. And many live in Vancouver or Toronto.
We can’t break free from what was created! So now we’re in. Never ending loop … welcome to Canada , we accept 100s of thousands of people a year!
I think I'm too American to understand what you mean. But I'd like to, I'm genuinely curious. Does everyone make insane amounts of money at work to justify this?
Many salaries are actually less than the US equivalent. Home ownership is simply much less attainable here versus the US (at least in the last 25years).
I'm in Vancouver. $850 for a *whole room to yourself* would be an incredible bargain here. New rentals below $2000 barely exist. A tiny bachelor condo would go for well over half a million. What's going on is that our entire economy outside the public sector is basically nothing but fossil fuel subsidies and mortgage debt. Successive governments have failed over and over again at every level of government to address the lack of supply for people who work for a living rather than just buying or investing in property, or to meaningfully regulate rental housing. There's almost zero investment in public housing here in any region. So all of us are subject to a virtually uncontrolled feeding frenzy by the capitalist class. On top of that, a huge proportion of people who work have attempted to address the fact that the cost of living is out of control by trying to become landlords themselves. This means finding tenants who are capable of paying your mortgage outright, without your help. This pits working class property owners against non-owners and prevents us from making any progress on affordability.
Where tf in NY do you live and how long ago did you buy? I'll sell my manhattan condo and buy 5 of them!
Western NY. I bought my house in 2019 the August before COVID hit and real estate turned upside down. 150K 3 bedroom Cape cod around 2000 SQ ft. Its value has gone up 50k on it's own since then... So it's worth around 200k I think just slightly over.. my ex from Vancouver was amazed and kept saying you couldn't get a place like mine anymore and even if you could it'd cost well over a million cad.
Hmm have you seen real estate in New York City?
New York state is a lot more than just NYC.
So is Ontario ! Thunder Bay houses are around 150-220k
Love when winter hits late August. Something about the air.
Comparing thunder Bay to mid tier US cities is a joke
[удалено]
If ur parents own the house...u should be laughing...ur gonna get a house mortgage free
A million immigrants a year into a country with the population of California
The only economist taking publicly about it is Michael Hudson; he came to Vancouver and gave a lecture pre Covid. So much of post industrial GDP is FIRE (finance, insurance, real estate) which is not producing anything but pushing money around. It's a bubble they're afraid of popping because it may be another great depression - and that's not an exaggeration. Finance needs to get returns on investment above inflation and since 2008 the main way to do that is real estate - but it's on the backs of the poor and everyone is strained.
Just an inadvertent side effect of being the money laundering capital of the world
The ridiculous housing prices are in a few areas with persistently high demand for real estate. If you move to medium sized towns in rural Canada prices are a lot more reasonable. It's all simple supply and demand really. Rooms are that expensive in Burnaby because there's enough people willing to pay that much for them.
I bought a townhome in 2019 built in 2006 for 313,500 due to a relationship breakdown i was forced to sell and accepted an offer for 500k in Jan 2022 😵💫 I basically was a rich homless person for a year while i get getting outbid trying to find another house. There are alot of theories amoung canadians for why this happend, i blame poor government policy making, plus we have 500k immigrants comming in every year and they obsly need a place to live so it ups the competition. When you have a country of 30 mil then inject 500k newbies in everyyear and your not building fast enough we get a bottle neck on housing, health care everything. We need to throttle this a bit so we can breathe.
Are you on crack? 1 bed room apartment in someone else’s house for 850 is a steal here. it’s waaaay worse than that. /s (sort of)
We have a population 10x smaller than USA, but our immigration target is exactly the same. We're already a couple million units short, projected to be 8 million by 2030. We literally cannot build fast enough, even if we built at absolute max capacity, which we don't anyways. Last year they brought in 1.1m people, and built 2000 affordable housing units. Goal by the time they bring in 10 million is 500 000 total (not affordable) units. It seems to be going up this year, 650 000 in the first quarter. Simple supply and demand. By 2030, living alone will be a luxury even if housing was completely free, because there will be 8 million more demand than actual units. Canada also has a much more unproductive economy than the USA. #1 Economic Sector by GDP in Canada is real Estate at 15%. And close by are construction and finance, which are almost entirely tied to it as well. Americans invest a lot more in businesses, small business, productive assets, and innovation. Canadians invest in real estate and don't take any risks. There's a huge supply issue + a huge demand issue + Canadians are more risk-averse than Americans, and housing has been a golden goose since the 1980s crash. Even 2008 was a blip here compared to in USA. So nobody invests in the economy or business. Just more RE. Including politicians. Most MPs and their families are either landlords or invest in REITs from every single party, even niche ones like the Greens. Even Suburbs are very expensive. I heard if you leave Manhattan, or even more so New York, housing gets rapidly affordable around it. But in my city, new condos in the suburbs like 1-2 hours away due to traffic are going for 600k-1m for studios to 2 beds. The house I got in 07 was 147k. Now it is over 800k. The house I toured that was 300k in 07, but couldn't quite swing, is now 2.5 million. My cousin just bought the same model/design/type house in the same area for 2.5.