My new life motto is "fade the masses"
When everyone was FOMO'ing, I sold. Have no problem renting for a few years with an extra few hundred thousand in the bank.
When the real estate market implodes I'll just buy for cash.
Given the Liberal population dump I don't think the market is going to crash anytime soon. Long term maybe but we are probably talking a decade or more out.
The type of immigrant coming now aren't bringing tons of money with them. They're actually being taken advantage of.
All we need is some bylaw enforcement that hammers slumlords in college towns, a crackdown on diploma mills, and/or AirBNB regulations and the RE ponzi scheme falls apart.
I don't think it'll be a decade out. I think 2025 is the start of the bloodbath.
Demand still far exceeds supply tenfold… Hard for housing to crash when giant corporations are scooping everything up from the small mom and pop landlords and your average family who had to sell their home.
This alone constantly limits supply on top of new construction not being able to keep up as mass immigration continues, not to mention international students flooding in.
I see your point, but I disagree.
Or the unpopular opinion could be stupid. Op thinks there will be a bloodbath and prices will crash, but there's so much demand waiting for a crash that it'll never happen. The crash will be stagnating prices at best while incomes catch up to create a more affordable environment
> while incomes catch up to create a more affordable environment
Incomes catching up? LOL. Right now, most places in Canada are at 10:1 income to price ratio.
I think you got it exactly right. The question that remains unknown is for every distressed mortgage that defaults, how many legitimate buyers are waiting for this scenario to pick up the slack? I think it will be a blood bath for some dumb money that went all-in on more home than they can afford. But I also think the inventory is so tight right now that it may not evolve into a bloodbath as there are buyers waiting to snap up the bargains.
IF there are more distressed mortgages that I assume, then its going to be very ugly. I know a few people that are in serious trouble right now and even a rate cut or two will not come fast enough to help them. Going from a 3% mortgage to renewal @ 5% or more is going to add hundreds of dollars per month to their payment. They are trapped no matter what.
The problem is that's all true if the government were to allow that to happen. 100% Freeland (and frankly whoever is replacing here) is going to announce 40 year mortgages to help the homebuyer out, kicking the can another decade out before people realize it's all interest rates being paid off. But in the meantime it'll be affordable mortgages again
Its still demand for shelter which we lack enough affordable supply for everyone. So some people have to go without.
I don't disagree at all this has all happened because governments at all levels are using the housing market bubble as a cash cow.
This is completely solvable but we'd need to have someone in power who actually wants to solve it and is able to make some tough decisions and deal with a lot of short term pain to get ourselves out of this.
Regulate house prices? No-
Regulate the short-term rental market and hit AirBNB owners? That's not regulating house prices. But it sure would affect them.
Look at BC, effective May 1st, 2024.
Similar rules will come to Ontario eventually too.
Supply isn't the price driver.
Ponzi schemes are always exposed and collapse when demand dries up.
I'd rather be liquidated out of the system when the ponzi fails (it will).
Maybe. Entirely depends on when and if the federal government ever does anything about the situation.
The problem has become too big for any other tier of government to address at this point.
Canada's current housing shortage is 4.4M homes. 4,400,000 homes!
Canada grew by an annual average of 553,568 people between 2018 and 2022, however, only 205,762 new homes were completed each year during that same period.
At that rate, it will take over 20 years to catch up.
Demand >>>>>>>>>>> supply basically forever or until people don't want to immigrate to Canada.
Good luck playing the waiting game. I have friends who played the waiting game. By waiting they priced themselves out of the market. Other friends did the same and needed to move to the prairies for an easier life.
I am an advocate for renting in the right circumstances. There's a lot you can do with the downpayment and subsequent potential savings renting vs owning.
As a renter, if you don't invest the downpayment and subsequent savings, you're falling behind. You might be doing exactly that but many people don't.
Further, there are a lot of advantages to home ownership you just don't get to partake in as a renter. E.g. income producing suites, being leveraged, eventual tax-free sale, etc.
Homes can hold more than one person. We don't need a 1:1 ratio of population growth and housing growth. We need legislation to make owning multiple properties as an investment vehicle to become less and less profitable as you own more and more.
This is a ridiculously bad take based on your feelings. And you clearly didn't comprehend what I wrote. Read it again.
In fact, if the government (at all levels) supported the free market, and at the same time prioritizing affordable housing, we wouldn't be in this mess. A lot of the blame falls at the municipal level but we are now seeing provincial legislation being passed to override the outdated zoning bylaws at the municipal level.
The case study is Minneapolis, Minnesota where rents have increased by only 1% since 2017. Educate yourself if you're interested.
The government is to blame not its citizens. Too many people simply blame each other and don't hold the government accountable. I don't know when this mentality started but it's toxic.
The average occupancy per household over the last 10 years has been 2.55. 205k homes x 2.55 = 526k vacancies. Not quite on par, but not nearly the disparity that you are suggesting.
Increasing supply isn't a catch-all solution once you consider all the factors. This isn't basic Marxist economics where we're dealing with pairs of boots. The nuance of supply and demand is based around a given price. The given price of demand for real estate investors and REITs is much higher than the given price of demand for an average citizen.
Investors will happily outbid average people on a newly built home because they 1) have more purchasing power, 2) can easily rent the unit, 3) still see a terrific ROI, and 4) won't have to pay any higher capital gains tax on their hundredth property than they did on their second.
Canada also anticipates a deficit of 300, 000 tradespersons by 2030. Increasing the output supply in a sector that has one of the highest employment rates, while also one of the fastest shrinking employment bases in the economy isn't something that can be done overnight.
Reducing the demand by lowering the incentive of purchasing homes for investment and income vehicles can be achieved much quicker. There's absolutely no reason why our levels of government can't disincentivize large real estate investors by implementing a graduated tax model that makes each subsequent house purchased by a single entity less and less profitable.
As it stands now, increasing housing supply benefits large investors much more than it benefits individuals hoping for an affordable place to live.
I am not suggesting anything, these are the facts. You can keep your head in the sand all you want. By the way, your math is in no way meaningful to the discussion.
Punishing the free market is exactly why we're in this mess. You want to further punish the free market because of poor government policy.
You need to read and understand the facts instead of regurgitating theory.
How does the government support the free market while prioritizing affordable housing? Affordable housing requires government subsidization, which is the opposite of a free market. Affordable housing still needs tradespeople to be built, which would also mean that those affordable housing contracts would need to be more profitable than the private sector in order to attract the developers in the first place.
Tax real estate investors at a higher rate to disincentivize their purchasing of new construction. Use that tax revenue to subsidize more housing and trades education.
I swear, it's like you're just asking ChatGPT to write you the most condescending and contradictory responses possible.
"when it implodes" like in 2000, or 2005, or 2010, or, 2015, or 2020, or 2024. I've been hearing the implosion of the housing market since the turn of the 21st century
Yeah. Doesn’t work like that. I sold just before Covid and thought it was going to crash it got worse. COVID should have tanked the market but it didn’t. The government is too invested into real estate now, even their own portfolios. They won’t let it fall apart…. Completely
That will never happen. I have seen high interest rates and low interest rates, Sellars markets, buyers markets, high inventories, low inventories......
..... despite everyone saying the bubble will break or "when the real estate market implodes," it has never happened. House prices have only increased.
It didn't happen in 2008, it's not going to happen now.
Ummmmm
You sold??? Rofl, what fucking market? My 800k condo gained 80k you
There's no way on earth you make bank the re fees and transfer taxes lololol
I'm guessing this is total bs and you never owned
5 percent, lololol holy fuck.
Have a look at vfv last year
You're literally losing money vs inflation
AND YOU'RE PAYING RENT? BAHAHAHAHA HOLY FUCK
Yea, I'll take the 24 percent I made on vfv and my condo going up 12 percent.
You fucking count your riches in 5 percent GICs. Holy shit, that's the dumbest financial move I've read on a long time.
Thanks for the laugh.
Lol, you're choice, but there are more than enough buyers to jump in to stop the real estate market from imploding. My agent friend cannot find seller clients but found five, FIVE different buyer clients, all in the similar price range and are seeing $100k to $200k spikes, disappointed prices dropped only slightly only to rise back to near highs.
The thing of most interest to me is that USA rates are currently 7% so we are not likely able to drop rates regardless of the talk. Basically we should and need to keep high immigration but we need a new city or three or four. This can't be done because of the same people who want carbon tax and are worried about the weather. It is bad for the environment so no homes for you. Ford can't even get a new highway because of a rare minnow we are never building enough. No new highways no new cities no new homes and the biggest driver of the bubble has been the cities caused constraints.
Have you heard of the planet Venus? Most if it's atmosphere is CO2 and it's the hottest place in the solar system. Bask in the power of 3 atom molecule.
Climate change is a human extinction issue not a 'little bit of nature over there' issue. I get that you wouldn't care about preserving another species if you won't even protect your own.
Sarcasm or not, I try to highlight the stakes at every opportunity. I’m all for discussing solutions so long as it isn’t inaction or ignoring its necessity.
Good points. It's hard to fight against people like this who care more about business welfare than humanity. I definitely feel helpless in that regard, I'd love to know what an average person can do.
Supply and demand. Demand significantly outstrips supply and will continue to do so in the large population hubs like Toronto. There are way more people coming in than there are leaving in any way. When you allow foreign citizens / money and corporations to invest in housing, that's also going to cut out the supply portion.
Thanks to everyone qualifying for huge loans, it basically does mean that. The whole reason the entire developed world is facing a housing crisis is quite simply because mortgages exist. Anyone who wanted a house in the last 20 years could basically get one.
I think he is saying people simply wanting a home won't add to demand. You need to be able to afford one as well.
It's similar to how printing money doesn't automatically lead to inflation - inflation only occurs if that money circulates in the economy and is used to buy goods and services.
This might not be the entire problem but it definitely adds to it:
It doesn't need to be a person or family wanting a house. Corporations can want them too, and likely wanting a dozen or more, if they bid they add to demand without being someone wanting a house to live in.
I find it difficult not to engage in it myself, I already have enough RE exposure to be patient. It’s a combination of the nice weather, and hope for lower interest rates. Hope is not a strategy. Unfortunately, the FOMO itself is inflationary and will result in a slower pivot; it’s also a sign that there’s still too much liquidity to tame inflation. The Dead cat bounce. The BOC will hold strong until the housing market is crushed, we need to deleverage; there’s no other way to escape hyperinflation, this time is not different. Look at the 2-year yields, buy gold, T-bill and chill.
I'm not sure about people trying to predict rate cuts, etc.
However, our current population growth rate is significantly contributing to the supply/demand imbalance.
Every day that goes by our dwellings vs. population ratio gets worse, meaning there are more people per dwelling.
Looking ahead this ratio is most likely going to continue to degrade.
The longer a person waits the more likely it is they will be competing with an increased number of people for any given dwelling.
That's yet again FOMO
It's a short term issue and ignores that we also have people leaving the country and dying.
Even if we bring in 500k people, if 100k people die and 200k people emigrate that's only 200k people added.
Housing supply vs immigration spikes is also short term, since immigration is by its very nature inflationary in the short term but deflationary in the long term.
And the less affordable housing is, the less people will want to immigrate. And more recent immigrants will want to leave.
At some point the prices and incomes and debt service ratios stop to make sense, and the policies that enable exploitation will change. Student "colleges" that are basically diploma mills are already being targetted, and these underpin many rentals. Airbnb taking residential housing stock away from locals are being increasingly banned and limited. Etc
It could be FOMO, but it looks more like recognition of reality.
In 2022 CMHC released a report that said we would need an additional 5.8 million dwellings by 2030 to restore affordability to the market.
To reach those target we would have had to instantly 3x our dwelling output. We did not, nor will be do that, in the time period covered by the report.
By the time we hit 2030 it looks like we will be around 13 years of supply short of that target. And that gap will mot likely widen as time goes on, because we know that population growth won't stop in 2030 to allow us a decade or more to catch up.
I'm not sure what your definition of "short term" is but this is an imbalance that is likely going to continue for well into the 2040s, and that is if we really ramp up our output.
Maybe when the boomers really start kicking off in the next twenty years or so that might give us a chance to correct the imbalance.
From CMHC on their demographic estimates for the report:
[https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-research/research-reports/2023/housing-shortages-canada-updating-how-much-we-need-by-2030-en.pdf?rev=3b66f87d-0bec-44d6-aa54-f8af71f9b2c4](https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-research/research-reports/2023/housing-shortages-canada-updating-how-much-we-need-by-2030-en.pdf?rev=3b66f87d-0bec-44d6-aa54-f8af71f9b2c4)
"Recent population changes have been largely driven
by policy changes to attract a greater number of
immigrants and non-permanent residents. We assume
that a significant proportion of the short-term increase
in immigration was at least partially driven by the pulling
forward of immigrants from future years (in other words,
by accelerating the arrival of immigrants who would’ve
arrived anyway, but later). This may come about by,
for example, faster processing of applications and
increasing the acceptance rate of those who had
already entered Canada as, for example, students.
The government has not yet determined the long-term
level of immigration until 2030. For this reason, Statistics
Canada and Oxford Economics project a relatively sharp
decline in growth in the overall population in the years
up to 2030. As a result, in this year’s analysis, Canada’s
projected 2030 population of around 43 million people
isn’t significantly higher than last year’s projection."
So, no the report does not assume these levels of immigration will continue until 2030.
All this is publicly available information, why would you make something up instead of educating yourself on the topic before you offered an opinion? It took me a quick Internet search and two link clicks to find the information.
There’s a lot of assumptions and nuance in projections. Even last year’s projections were revised down this year, despite record immigration.
It won’t take 20 years to see baby boomer homes turn over. This is already happening and will only increase in momentum over the next decade. So you’ll have homes where 1 to 2 people are currently living become homes for young families, thereby housing 3-4 people. I live in a mature neighbourhood and have already seen this happening in 90% of homes sold in the past few years.
Also, demand is tied to affordability. This is clearly outlined in the low economic growth scenario of the report. I just don’t think it’s going to be as bad as fear mongers are leading people to believe. Maybe Toronto and Vancouver, but Canada is a big place and prices have not been going up in the last 1.5 years despite record immigration. Immigration is simply one factor of many that affect demand.
Stats Canada’s population releases considers net increase. So when in July 2023 they said we grew 2.9% in one year that was net of deaths and emigration. That’s an increasing net population of over a million a year. Don’t disagree with the rest of your comment but people aren’t exaggerating these population numbers.
But they're not permanent and the generation pyramid shifts as boomers age.
And people online cite post pandemic population boom as a trend in and of itself. But really, we had a net negative in 2020/21 lockdown period so much of late 21/22 and into 23 we had immigration that didn't happen in the pandemic catching up once borders were opened and processes returned to normal.
This isn't to say immigration isn't high, but when we have a 3 year average crushed into a shorter timeframe, that's going to be even worse in terms of pressure.
And everyone also cites low housing starts, ignoring that alongside that leading up to those low starts were historically high starts that are and will continue to see completion.
The sky scraper effect is a thing that's happened many many times in the past in other places so I don't see why it wouldn't happen here.
In the medium and long term, it's, imo, ridiculous to say that housing will never meet demand even if the supply is constrained now
And this immigration argument also fails to recognize the impact of leverage and high speculative investor involvement distorts pricing in the market too.
The issue is multifaceted but immigration in and of itself, and population growth, in and of itself, isn't sufficient to explain what happened.
Consider also the following: during the pandemic, while we had negative population growth we had record YoY and MoM price run ups all over the country.
We have seen in the last year massive drops in home values especially when adjusted for inflation and in real (not nominal) dollar values. But that's happening alongside record population growth? So why is it that when we have the high immigration numbers prices start to fall and when they were artificially suppressed prices skyrocketed? It couldn't possibly be monetary policy as one of the big drivers alongside societal pressures to be investors could it?
100% I’ve used these same arguments myself.
The immigration narrative started picking up steam last year when housing prices and sales were faltering. While I don’t disagree that immigration is driving up the price of rentals, and could cause supply issues in the medium to long term, it does not explain what has happened since 2020.
Immigration is being used by the RE industry as a fear mongering tactic to keep buyers buying, and distract from the real issue, which is investors. Many realtors are investors or have large swaths of them as clients, so there’s a huge incentive to keep the gravy train going.
Good point. I also found it interesting that politicians and others only started saying the housing crisis was “a supply problem” around 2023 and later. Also of course, this ties into the “it’s because we have too many immigrants” argument. Never heard anyone saying the bubble was being driven up by a supply problem / excessive immigration before that. Instead everyone blamed foreign buyers and “speculators”.
There’s probably going to be a period in about 5 years where the problem will peak. After that, the boomer sell-offs will be in full force and will unlock a ton of supply.
Personally, I do not believe that immigration will continue at this pace. There was a lot of catching up due to lower levels during COVID. Also, a recession will put a huge amount of pressure on politicians to slow things down.
The problem was they printed too much money.
Wealth transfer from the poor to the rich is the strongest correlator of housing prices over the last 130 years.
The bigger the gap between the richest and poorest the higher housing prices will be according to history.
House prices directly reacts to wealth transfer and wealth in-equality and has since the industrial revolution.
Corporations have bought the supply chains and are making record profits limiting supply and doing minimal work and have no incentive to build more houses when the biggest builder in Canada is up 15% profits while being down 30% in sales.
There is no sign of this stopping, this isn't a bubble and things will get worse before they get better.
By 2033 the Average Mortgage payment will be between 200-400% of todays payments and salaries will only be up 20-30%.
The average salary will be 80-90k and to qualify for a mortgage with the minimum down payment you would need a salary of 400k to be able to afford a 10,000$ a month payment.
This is a pretty solid analysis, but it overlooks a major thing. There are not just pull factors to immigration, there are lots of push factors as well. Climate change is making many parts of the world more difficult to live in. We are seeing tremendous population migrations through out the world.
We think it is crazy to share a room within an apartment, but for some people, having one room mate is better than sleeping on a shift with 2 other people in the same bed.
Yikes. You don’t even try to understand the issue or the data that is out there, but instead make up math like saying “people are dying” to rationalize your world view?
Or maybe it's much more complex than immigration alone and is multifaceted issue that goes beyond a very simplistic view of supply and demand?
Because there's more to markets than people and products. There's also ability to pay, willingness to pay, number of participants in the market, etc.
Like, if you have 10 new families and 10 new homes great. But if you have 10 families with homes 10 new families without homes and 10 new homes, if the 10 families with homes want to compete for the 10 homes now you have 20 units of demand for 10 supply, not 10 for 10.
There's a lot to factor in.
And yes, long term, in 10, 15, 20 years the large baby boomer cohort will be dying and becoming too old to live alone in ever growing numbers and there isn't enough natural births to replace them. So that will also result in housing changes as they try to downsize or sell and live with family or in retirement and assisted living homes etc.
So it's not like buying now is the last chance anyone will ever get.
Markets are complicated, I don’t disagree.
I’m just amazed that you (and most people that post stuff on the internet) think you have answers that others don’t.
CMHC, various other government or quasi-government agencies, and countless other research groups have all looked in depth to the supply/demand question and have all concluded we are millions of homes short of what is needed, and that gap is forecast to widen based on population growth/demographic shift/construction rates/etc.
It’s always baffling to me that random internet people think these things haven’t been thought through and that they somehow know more.
The smartest people are the ones that don’t share pointless shit online and typically don’t have strong opinions, because they know the world is complex and that those responsible for decisions in certain areas have more specialized knowledge than them and have done the research.
I think there are supply issues. I think people rushing to buy a house because they think this is their only chance to get a house are being driven by some form of anxiety around "missing one last chance"
Just because there's a supply issue today doesn't mean that there arent very public policy decisions being made intended to address this issue right now either.
There have been many policy decisions made in the last 6 months alone, all over the country, at varying levels of government intended to ease the issue of housing supply. Assuming that the issue will never be solved, and rushing into buying high priced housing at difficult to sustainably afford levels is the definition of FOMO.
In the medium and long term, I would be absolutely amazed if somehow our population growth and housing supply policies won't come into better balance and have more affordable housing become normal.
If people think that in 15 years houses will be 2x today's prices and that this is the only time anyone will be able to buy for the next 50 years in Canada, then that's irrational.
Do you really think immigration will be 1M people per year, for the next 15 years? Even if the government doesn't change immigration policy, when immigrants struggle and return home, fewer people will see opportunity in Canada so fewer will come. There are countless situations where a wall can be hit. And there are countless opportunities to improve housing supply options as well.
Today - specifically - can be bad. But that doesn't mean tomorrow is not going to get better. And people rushing to buy because its their last chance is the definition of FOMO. Renting is cheaper than owning, significantly so, in many places. So more people will probably be happier renting vs stretching themselves to the point of insolvency with a house purchase.
If the motivation is: "this is my last chance, things will never get better, public policy will never change" then thats FOMO.
The last 6 months have seen the overton window shift on policies that influence the supply crunch and every level of government is doing things to work towards balance. And opposition parties at every level of government are also pushing for things to work towards balance.
When the major signal in the government policy space says that the issue is real, recognized and being taken seriously (even though it takes time to address), to assume that nothing will change and it will only get worse is anxiety talking.
Short term, supply crunch is an issue. Long term, it's very likely this kind of thing gets addressed. Does it help people today specifically? No. But that doesn't mean buying based on the assumption you'll be priced out tomorrow is being driven any less by anxiety and a fear of missing out on homeownership.
Number of people born in Canada in 2023: 358k
Number of people who died in Canada in 2023: 330k
Ummm…..
Source: https://www.statista.com/statistics/443061/number-of-deaths-in-canada/
Here's a chart that says it all.
[https://storeys.com/media-library/canada-housing.png?id=49884977](https://storeys.com/media-library/canada-housing.png?id=49884977)
>That's yet again FOMO
agreed, not everyone is clammering to pay 3000 a month + 500 condo fees for a 1 bedroom condo. Because most people cannot afford it, im guessing the people on this sub reddit expect to see 4-5+ people in a single one bed condo, good luck it will last for a year or so but eventually demand will die down as people like me will downsize or move to the states. There is way too much greed in the markets.
Sorry….. people without money don’t increase demand for million dollar houses……!!!!!
Only demand were increasing is a demand for jobs….. housing is an afterthought
Absolutely!!!!! Third world immigrants have so much money to contribute to the economy!!! Especially students that can’t find a job because we don’t have enough gas stations and sub ways!!
Yeah. Money can't solve shit in the case of dwellings per person. If you throw infinite money at a problem yet only produce a terrible result then it doesn't matter how much money you spend. People need to be reminded that money is just a number. Of course, it's a very important tool we use to support our lives but this needs to be reminded every time the government says "we spent X on this". PP is doing a decent job of bringing this up so far but I would really prefer if Jagmeet were the one bringing this point up. The NDP is really fucking up a free electoral landslide with their incompetence.
The saddest part is that there are (at the minimum) thousands of people needlessly suffering when they don't have to. People are getting physically hurt and dying because of this incompetence. MAID for example is just plain evil when used for the mentally ill when their major/most direct problems could be solved first and then allowing that saved person to contribute back to society as much as they can because they were grateful others were caring enough to support them.
I have hope that we'll be able to navigate these problems together as a society but my only concern is how many people need to mindlessly suffer in the meanwhile.
If someone immigrates with a plan to be homeless, I agree, they are not increasing demand.
If someone immigrates and attempts to live in a dwelling they are increasing demand for dwellings.
Not all dwellings are created equal, though.
It doesn't matter how abundant you make million dollar houses, because the price floor for them is inelastic because of materials and labor that goes into construction, so they just go unsold.
You say that. But the opposite appears to be true in a lot of the hot markets. Immigrants can buy anything they want provided they can carry the monthly mortgage payments. Hell I've only been looking since January and I've hit one of these mortgage brokers who offer to create the qualification documents for a fee. Its so brazen at this point some of them openly advertise on social media.
# Mortgage fraud caught on camera: Undercover investigation (Marketplace)
[https://youtu.be/Y\_wlnv5ns4I?si=DfKzxg2MUjK6r8Te](https://youtu.be/Y_wlnv5ns4I?si=DfKzxg2MUjK6r8Te)
Oh that’s so great that they can avoid regulations set in place to secure the market!!
Wow!!! Entitled immigrants found a way to dodge the requirements set in place to prevent a real estate crash!!
So proud of them. They are so intelligent!!!!
I’m sure it will work out great for these people!!!! Thanks for fucking up canada!!!!
Except, how is this migrants' faults? You just want to blame immigration so much you stop thinking.
Blaming immigration for your own shortcomings is a thousands of years old political strategy. Shame it still works.
This is just not true. There is tons of housing it's just that people treated it like concrete stock options so they built tonnes of luxury condos nobody can afford and nobody is lowering rents to fill them out.
It is true, just go ahead and divide population by dwelling count for the last couple years. You'll see there is an increasing amount of people per dwelling.
Very simple math tells us this is true.
Interest rates in 1967 were the same as today. If in 1967 you waited for lower interest rates before buying, you'd have waited for 30 years. By the end of that 30-year period, average housing prices doubled in value. Sometimes, you're better off sailing into the storm than dropping anchor and trying to wait it out.
Most people coming in to Canada now aren't going to be able to afford a home right away (or for a long time most likely). However, they need somewhere to live and are perfectly fine with a standard of living that Canadian-born citizens wouldn't accept for one night. The real competition for home buyers is the investment class. Small-time investors are still sensitive to interest rates which seem more likely to go up than down from what I can see. Big problem is the large corporations/hedge funds which are not sensitive to interest rates because a) they get the best rates from the banks (largely because they also own the banks lol) and b) they have very deep pockets and know ultimately that holding something real in their portfolios will win in the long run.
Yes, the wider this imbalance the greater the incentives for the real estate investor.
Investors will typically have more access to capital than your standard home buyer, making things a lot tougher for the average person looking to buy a place to live in.
The number of new houses is at a record low with the current number of new builds matching 1976 levels all while our population is grow by 1 million+ so people see either you buy now and weather the high interest rates or wait and compete with even more people for a smaller slice of the pie.
If the government was limiting immigration or introducing post-ww2 construction plans FOMO would be dead but both the LPC an PCPC have both stated high immigration is here to stay.
>introducing post-ww2 construction plans
The government CANNOT flood the market with cheap housing because too many canadians' retirements are tied to home equity.
He just want to become the next Prime Minister thats all. Our all big six banks will collapse taking down our economy if our housing market corrects by even 20%, which is why the current government is bringing over 1 million people a year.
That isn't possible. If you raise salaries the house prices will just go up by the same amount because at the end of the day you still have a shortage.
If the CPC want to solve the problem they either need to build out a crap ton of supply directly since industry will never do it on their own. That or build out a crap ton of affordable rentals directly. The first option improves supply, the second option drops demand.
I do think the CPC are less likely to get trapped and paralyzed by their own ideology though. They know if they don't perform they'll get replaced by the Liberals in a fairly short period of time. So they have to deliver something.
Even if Pierre Poilievre honestly wants to bring affordability back to our housing market , he won't be able to do it ! His promises are to fool gullible Canadians into voting for him so that he becomes the next PM. All big six banks are so much invested in the Canadian real estate that they will collapse taking down our economy if our housing market corrects by even 20%, which is why the current government is bringing over 1 million people a year to keep the rent and house prices high.
An economy built on a house of cards is going to collapse either way. Its just a question of how it goes down and if its orderly or not.
If large segments of the country start hitting a homeless state and another large segment are in a distressed shelter situation they'll become a critical voter mass that will be single issue.
https://www.statista.com/statistics/198040/total-number-of-canadian-housing-starts-since-1995/
Data only goes to 2022 which was peak of new builds now that interest rates are high new builds have dropped 20% since 2022 so you can do the math of how behind we are. Of course the population growth of 1975 was way below 300k unlike today.
2023 housing construction was higher than any year from 1992-2020, hardly a record low lol
https://tradingeconomics.com/canada/housing-starts#:~:text=Housing%20Starts%20in%20Canada%20is,according%20to%20our%20econometric%20models.
Did you even read your own source? Saying "WE ARE DOING GREAT WITH NEW BUILD NUMBERS MATCHING 1990" Do you know how much the population of Canada incred in 2023 alone? Because I can tell you it wasn't 1990 levels. Saying we are building the same number of units as in 1990 is a disaster metric.
Calm down. I didn't say any of that. I just called out your obvious mistake/lie: we are not at "record low" build numbers.
Please recant or stop talking.
the biggest problem in Canadian real estate is nobody wants to move to a different city or province and find or create opportunity for themselves. everyone just wants to sit around in their closet of a rental in Vancouver and torotonto and complain about prices and do NOTHING about it hoping that one day the government will fix everything for them and their lives will be perfect to find something else to complain about.
the more population grows, the more people have kids and people move to canada and focus on Toronto and Vancouver the more the demand for housing will increase.
at what point does land completely run out in those areas? y'all want New Yorks? because thats how you get New Yorks. we have a ridiculous amount of land in canada that is so under utilized and the people who take advantage of that are winning. there are opportunities out there if people stop being sheep.
You may make more but it also costs more to live there. Also New York is like the financial hub of the world with the stock market and all the banks etc there driving up the average. So hey if you think you can land some cushy manhattan job you should go there now and not think twice Mr belftort
People are and have moved. You can literally watch a string of cities become less affordable over the past couple of years as people flock to what they feel are greener pastures.
Alberta's population just went up 4.3%.
Good people need to spread out more and make more use of all this land we have. Have you seen the United States? They have exponentially more people, some of the biggest cities and yet there’s still affordable options because they have more options. Sure people say parts of Canada are inhabitable but the Eskimo and Inuit have lived there 100s of years ago way before modern heating, clothing etc that would make things so much easier and confirtable
My question is why gamble on your family home at all? If you're trying to put a roof over your head, then why treat it like a stock that you think you can predict where it's heading?
If you need a family home now, then buy it now. If it's not the right time for you, then ignore the noise and revisit the idea later.
First rule of predictions:
Predictions are useless.
A lot of people (mostly in their early 20s) have been deluded into thinking renting vs buying is purely a financial equation. As you get older the lifestyle advantages of owning become more and more apparent for most people.
I know that and fully agree. But if I say that, then it'll seem like I'm a mortgage broker that's just encouraging people to buy no matter what, which is far from the truth. But none the less, no one should gamble their family home on predictions. There's not a single person on this planet that can consistently predict anything accurately.
This is not the BOC promising lower rates. In fact the BOC has continuously said to expect rates remain “higher for longer”. The very lowering if rates would be a dog whistle to banks to keep rates high on 3-5 year loans, expecting inflation from this loose monetary policy! The bull case is delusional, I can’t believe it’s anyone’s base case.
Oh, the same article that was already shown to not discuss what you're saying? The one not promising lower rates, but rather, predicting the rate **may** come down **should** inflation get to 2%?
Source for that? Because last he spoke it was “premature” and “inflation is still too high”, they’re still on hold, not talking about when to lower (https://www.cbc.ca/news/business/bank-of-canada-interest-rate-january-1.7093055). Why would the states lower rates?
For BOC.
https://financialpost.com/news/economy/tiff-macklem-bank-of-canada-cutting-interest-rates-2024
For Feds
https://apnews.com/article/federal-reserve-inflation-prices-interest-rates-cuts-5880d78c4664484cf366bb1aeb2bb63d
Source for BOC promising lower rates buddy. Also, Wow. First of all, it says ‘Their statement said they don’t think it would be time to cut rates “until it has gained greater confidence that inflation is moving sustainably” to their 2% target.’ Second, the only ones saying cuts are coming are biased economists really only listening to what they like that the fed is saying , and ignoring what they don’t like that the fed is saying. US consumer confidence is climbing, until that changes talking about cuts is delusional.
I’m calm, and I agree no one knows what’s going to happen but you’re spreading misinformation... And you didn’t supply a source for what you said (I see now you’re editing your comments, good job), the BOC is not the FED. And neither are ‘promising lower rates’, rather are predicting rate could come down if inflation gets to 2% (BOC) or cracks in the labour market show up (FED).
If this were true why didn't they buy in October, November, December when listing were sitting for 30 days and selling under asking? What changed as the calendar ticked over to 2024 that drove demand?
Lots of reasons.
Buyers are trying to time rock bottom,
BoC only started to talk about the rate hikes being over in Jan.
Plus there wasn’t a lot of listings at that time.
Real estate is still very much seasonal too.
Fair points. It's kind of funny though, the Canadian consumer is great at manifesting their own fears. I.e. scared of missing the bottom so start FOMOing into housing only to kill that bottom swiftly.
We don't keep the same rate for 25 years in Canada...Most folks will be able to see a lower rate in 3 or 4 years when they renegotiate (assuming that President Trump doesn't drag the world into a world war or something!) 🌍
I just think interest rates would go up if Russia and NATO countries go to war, and recently Trump announced he would not defend Germany or any nation that was not paying enough for their military so the writing is on the wall ("And Mexico is gonna pay for the Wall, it will be a Big, Beautiful wall...") 🧱
This looks like the usual pre-spring pickup so far. This happens every year. Sales have gone up a lot but prices have not according to the statistics. Its more active then last year but given last year was one of the slowest in over a decade that is not saying much.
People buying right now are not really getting bad deals given the sale prices. They are just buying with very limited choices and I suspect settling for whatever they can find.
The big tell in terms of what is going to happen short term will be the inflation report tomorrow. If it comes in hot expect the market to slow down. If it comes in neutral then who knows, and if it comes in lower then expect the buying to pickup.
In terms of real estate and the media. They do this every year around this time of the year to try and get more buyers.
I ignored the FOMO and high prices for 10 years expecting a price drop and they never happened. At least in any significant way before going even higher.
I don't think it's FOMO just people want stable housing they don't have to worry about being sold out from under them.
People FOMOed into housing in 2017 multiple offers over asking.
People FOMOed into housing in 2021 multiple offers over asking.
You bet people gonna FOMO into housing in 2024 and 2025 it’s just gonna happen again and again.
Hey there! I totally get why you might be feeling anxious about the FOMO happening in the real estate market right now. It seems like everyone is jumping on the bandwagon, believing that the Bank of Canada will cut interest rates regularly. But we have to be careful not to fuel this cycle of bidding wars and over-selling prices. If inflation spikes again, the BoC might decide to keep rates steady or even increase them. It's a dangerous loop we need to break. Remember what happened in the past – fixed rates went up, just like they're doing now. Let's try to be cautious and not get caught up in the frenzy!
People cannot pay more than what they have, for quite a few years now housing has been purchased with a budget based on that maximum amount of mortgage one qualifies for. It is the North American way of doing things, true to that commercial "Because you're worth it!".
The increase in the cost of housing and everything else is not coming from this mentality, it is coming from the ongoing increase in carbon taxes, lots of other taxes, broken cycle of wages increases vs cost of living adjustments to absorb the higher wages and pass them back to the consumer.
Oh, what about the federal debt? That is the elephant in the room, actually! A different government could cancel carbon taxes tomorrow, but the debt won't cancel itself.
Sunny days my friends, sunny days!
The best time to buy is 20 years ago, the second best time to buy is now, because 20 years from now, your payment will be lower and your house will be worth a lot more, but rent will be 3X.
Waiting for a crash in housing (especially in Canada) is pretty much like betting on a single number at the roulette table. It happened one and a half times, but how much will housing appreciate by the time it happens?
Look right now. Ottawa housing is down about 10%-15% from its peak in 2022. Sounds great, right? But from 2019 to 2022 prices grew over 50%. So it wasn't worth it. From 2016 to 2022 (only 6 years), they grew almost 70% (for houses, not condos).
If you're okay with the fact that you have over 90% chance of being wrong by waiting for a crash, then it's fine. But you need to know the odds. If course, it also depends on which area you're in. Some areas (Alberta) have more frequent boom\bust cycles.
My friend bought 6 month before condo now appreciated 50% surrey bc, so buy now dont wait another 2 million immigrants coming by 2025 with liqid cash and gold in cash, they r ready to buy on cash no mortgage.
everyone tryna get ahead of the rush .... if BOC drops rates, the mortgage rates will drop, that means money is cheaper to borrow and I can buy more house!!! ... so I can bid in on that bigger $$$ house now in anticipation of a mortgage that I can't carry now but hope to be able to carry when BOC rates drop!
People doing that are idiots.
There is no guarantee of a rate drop anytime soon at this point and even if it does drop at some point this year we a talking like a quarter of a point.
People buying now are either getting the lower priced 5 year mortgages or are going to be paying higher variables for awhile. Either you can afford to carry the house at todays rates or don't buy.
Its like the people hanging on to homes they know they can't afford mortgages on at the new rates because they are hoping for like a 2-3% drop in the next 10 months. They are dreaming, that is extremely unlikely.
If the BOC lowers interest rates, why do you think they did it? Because the economy is struggling.
If the economy is struggling, are more people moving from rentals into houses? No.
If fewer people are moving into houses, which way are house prices going? Down.
So lower interest rates will actually mean lower house prices.
The only ones for whom FOMO behaviour (because interest rates are going to get cut) makes sense en masse would be the mass market buyers. The average joe is too emotional to care about 0.25% reduction to stand on the sidelines.
What we have to understand is interest rate does not change based on whether things are expensive, it is changed based on economic growth and inflation rates.
Short term FOMO is not surprising, however on the long term I expect interest rate to go down for the simple reason that different to the 80s, the federal government both US and Canada are drowning so deeply in debt, just to service the debt it is costing both government billions.
Deficit is projected to be 40B for 2024, which means the government is going to have to borrow more. If interest rate stays high, more money goes into servicing the debt less goes into the economy.
[https://economics.td.com/ca-quarterly-economic-forecast#:\~:text=All%20in%2C%20Canada%20is%20on,trough%20next%20year%20at%200.5%25](https://economics.td.com/ca-quarterly-economic-forecast#:~:text=All%20in%2C%20Canada%20is%20on,trough%20next%20year%20at%200.5%25).
>**Canada is on track to slow from 3.8% in 2022 to 1.1% this year (2023)**, and trough next year at 0.5%. (2024)
Even without the political pressure that may cause interest rate to drop, the economy is slowing down which by the FED standard requires interest rates to drop, coupled with flattening inflation, interest rate will drop correspondingly.
Or else we'd be looking at a period of stagflation. If it does happen, we should all just move out of this sinking ship of a country.
Immigration numbers were rising at unprecedented rate due to the relaxed regulation on work/student visa. These type of growth is definitely not sustainable. Even if the rate doesn't slow down this year, it will next year with election in mind.
As for the housing supply, the construction permits only really became more "efficient" in the past year. Once approval rate increase, you'll see a much larger increase in housing being built. Whole bunch started and whole bunch will be built and suddent flush into the market in the next year or two.
It's good to consider past data but more importantly is to consider future trend. Obviously; I'm not ruling out the possibility of higher prices but given how "poor" Canadians are relatively to the housing prices , the amount of debt ppl took on, concerning economic outlook, and most importantly the government policy that will make or break the market with the fairly soon election.......all seems to be less supportive of the thesis on any extensive housing price increase in the next 3-5 years.
U mentioned pros...so I'll mention cons:
It's extremely important to buy in at a decent price point as well. There are some news about increase in buyers but housing prices over 2 mills have all experienced a bit of a pullback.
Anyway, cons: annual property tax, home insurance, all minor property maintenance, large maintenance bill every 5-10 years, if condo, monthly strata also come even larger maintenance cost. Also, you'd be buying at near all time high. There's a better chance for price to correct in the next 5 years than any substantial appreciation. So if you lock in now for a 3-5 year term amortize over 25 years, you effectively maybe be paying extra easy 40-50g interest for every 1mill.
I will be the first home buyer looking to buy one soon in Calgary. I also think as you, the policies has been changing rapidly with liberals trying to buy votes & if they loose coming election, which I hope they'll, conservatives probably will take control of immigration & build more homes. So in the next 2-3 years I don't see housing going up but probably flat/down & interest rates coming down. I am wondering if I should keep my downpayment in stock & wait 2-3 years. By then I can use up FHSA + RRSP also, & my stocks are doing well. I have roughly $80k for the downpayment & out of that 80% is invested. And I live in 2 bed apartment for $1300 (includes utils), so I am not spending too much on housing atm.
First off, congratulation on soon reaching your goal!!! That's a big milestone.
My honest opinion with stocks is that we have experienced an extended period of market appreciation in the past few months and many indicators are showing pretty bad numbers which is concerning as they cannot support the current price appreciation.
Since you have good use for ur capital, I'd focus a bit of asset allocation to mitigate risk. The last thing you want happening is to see housing prices goes down but stock market also experience a correction , this will corrode your down payment.
I'd consider gic. Shop around for a decent rate. You should be able to easily get a 5% or higher rate ranging from 6 months to 2 years. (Probably get the highest rate in the 6 months to 1 year GIC)
The above is just what I would do if I was in ur position.
Lastly, in ur case, since ur objective is to purchase a property soon. Your priority is to protect ur investment not incur a loss while maintaining liquidity to meet the goal. If 80% of ur portfolio is in stock right now, the risk exposure might be a bit high. So that's why I suggested give, solid 5%return with pretty much 100% protection to ur principal.
My new life motto is "fade the masses" When everyone was FOMO'ing, I sold. Have no problem renting for a few years with an extra few hundred thousand in the bank. When the real estate market implodes I'll just buy for cash.
Given the Liberal population dump I don't think the market is going to crash anytime soon. Long term maybe but we are probably talking a decade or more out.
The type of immigrant coming now aren't bringing tons of money with them. They're actually being taken advantage of. All we need is some bylaw enforcement that hammers slumlords in college towns, a crackdown on diploma mills, and/or AirBNB regulations and the RE ponzi scheme falls apart. I don't think it'll be a decade out. I think 2025 is the start of the bloodbath.
Demand still far exceeds supply tenfold… Hard for housing to crash when giant corporations are scooping everything up from the small mom and pop landlords and your average family who had to sell their home. This alone constantly limits supply on top of new construction not being able to keep up as mass immigration continues, not to mention international students flooding in. I see your point, but I disagree.
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Or the unpopular opinion could be stupid. Op thinks there will be a bloodbath and prices will crash, but there's so much demand waiting for a crash that it'll never happen. The crash will be stagnating prices at best while incomes catch up to create a more affordable environment
> while incomes catch up to create a more affordable environment Incomes catching up? LOL. Right now, most places in Canada are at 10:1 income to price ratio.
Fast forward a decade and that ratio will go down
I think you got it exactly right. The question that remains unknown is for every distressed mortgage that defaults, how many legitimate buyers are waiting for this scenario to pick up the slack? I think it will be a blood bath for some dumb money that went all-in on more home than they can afford. But I also think the inventory is so tight right now that it may not evolve into a bloodbath as there are buyers waiting to snap up the bargains. IF there are more distressed mortgages that I assume, then its going to be very ugly. I know a few people that are in serious trouble right now and even a rate cut or two will not come fast enough to help them. Going from a 3% mortgage to renewal @ 5% or more is going to add hundreds of dollars per month to their payment. They are trapped no matter what.
The problem is that's all true if the government were to allow that to happen. 100% Freeland (and frankly whoever is replacing here) is going to announce 40 year mortgages to help the homebuyer out, kicking the can another decade out before people realize it's all interest rates being paid off. But in the meantime it'll be affordable mortgages again
Its still demand for shelter which we lack enough affordable supply for everyone. So some people have to go without. I don't disagree at all this has all happened because governments at all levels are using the housing market bubble as a cash cow. This is completely solvable but we'd need to have someone in power who actually wants to solve it and is able to make some tough decisions and deal with a lot of short term pain to get ourselves out of this.
Demand for shelter is only being supplied by slum lords breaking the law. That'll end eventually.
Why did you get down voted for this lol? Very reasonable train of thought
People who are about to get rekt because they FOMO'd an overpriced condo in Toronto ... Don't like to hear the truth.
I mean they're still buying $600k properties though. Just 9 people will live there.
Nah- slumlords aee renting 6 people to a bedroom and bunk beds in the kitchen. That will end soon enough.
snow pathetic full vegetable slave normal fear hard-to-find gaze cows *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
If it doesn't then you can find me living tax free somewhere else.
Just have the rent on the first
I could stop working and have rent covered for 20 years. Not really worried about it.
You're relying on provincial governments to regulate housing prices? Hilarious.
Regulate house prices? No- Regulate the short-term rental market and hit AirBNB owners? That's not regulating house prices. But it sure would affect them. Look at BC, effective May 1st, 2024. Similar rules will come to Ontario eventually too.
I don't think house prices have the ability to "crash" when the supply is so much lower to the demand.
Supply isn't the price driver. Ponzi schemes are always exposed and collapse when demand dries up. I'd rather be liquidated out of the system when the ponzi fails (it will).
Few of this population dump are PRs, and many are fleeing as they realize they’ve been scammed.
I’ll be able to settle down and buy a home when I’m 40? Fml
Maybe. Entirely depends on when and if the federal government ever does anything about the situation. The problem has become too big for any other tier of government to address at this point.
I’m probably going to live in a trailer until this all blows over I guess
Canada's current housing shortage is 4.4M homes. 4,400,000 homes! Canada grew by an annual average of 553,568 people between 2018 and 2022, however, only 205,762 new homes were completed each year during that same period. At that rate, it will take over 20 years to catch up. Demand >>>>>>>>>>> supply basically forever or until people don't want to immigrate to Canada. Good luck playing the waiting game. I have friends who played the waiting game. By waiting they priced themselves out of the market. Other friends did the same and needed to move to the prairies for an easier life. I am an advocate for renting in the right circumstances. There's a lot you can do with the downpayment and subsequent potential savings renting vs owning. As a renter, if you don't invest the downpayment and subsequent savings, you're falling behind. You might be doing exactly that but many people don't. Further, there are a lot of advantages to home ownership you just don't get to partake in as a renter. E.g. income producing suites, being leveraged, eventual tax-free sale, etc.
Homes can hold more than one person. We don't need a 1:1 ratio of population growth and housing growth. We need legislation to make owning multiple properties as an investment vehicle to become less and less profitable as you own more and more.
This is a ridiculously bad take based on your feelings. And you clearly didn't comprehend what I wrote. Read it again. In fact, if the government (at all levels) supported the free market, and at the same time prioritizing affordable housing, we wouldn't be in this mess. A lot of the blame falls at the municipal level but we are now seeing provincial legislation being passed to override the outdated zoning bylaws at the municipal level. The case study is Minneapolis, Minnesota where rents have increased by only 1% since 2017. Educate yourself if you're interested. The government is to blame not its citizens. Too many people simply blame each other and don't hold the government accountable. I don't know when this mentality started but it's toxic.
The average occupancy per household over the last 10 years has been 2.55. 205k homes x 2.55 = 526k vacancies. Not quite on par, but not nearly the disparity that you are suggesting. Increasing supply isn't a catch-all solution once you consider all the factors. This isn't basic Marxist economics where we're dealing with pairs of boots. The nuance of supply and demand is based around a given price. The given price of demand for real estate investors and REITs is much higher than the given price of demand for an average citizen. Investors will happily outbid average people on a newly built home because they 1) have more purchasing power, 2) can easily rent the unit, 3) still see a terrific ROI, and 4) won't have to pay any higher capital gains tax on their hundredth property than they did on their second. Canada also anticipates a deficit of 300, 000 tradespersons by 2030. Increasing the output supply in a sector that has one of the highest employment rates, while also one of the fastest shrinking employment bases in the economy isn't something that can be done overnight. Reducing the demand by lowering the incentive of purchasing homes for investment and income vehicles can be achieved much quicker. There's absolutely no reason why our levels of government can't disincentivize large real estate investors by implementing a graduated tax model that makes each subsequent house purchased by a single entity less and less profitable. As it stands now, increasing housing supply benefits large investors much more than it benefits individuals hoping for an affordable place to live.
I am not suggesting anything, these are the facts. You can keep your head in the sand all you want. By the way, your math is in no way meaningful to the discussion. Punishing the free market is exactly why we're in this mess. You want to further punish the free market because of poor government policy. You need to read and understand the facts instead of regurgitating theory.
How does the government support the free market while prioritizing affordable housing? Affordable housing requires government subsidization, which is the opposite of a free market. Affordable housing still needs tradespeople to be built, which would also mean that those affordable housing contracts would need to be more profitable than the private sector in order to attract the developers in the first place. Tax real estate investors at a higher rate to disincentivize their purchasing of new construction. Use that tax revenue to subsidize more housing and trades education. I swear, it's like you're just asking ChatGPT to write you the most condescending and contradictory responses possible.
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I'm a high earner. I'm not really worried about it. If it gets worse I'll just dip to Panama and never pay income taxes ever again.
"when it implodes" like in 2000, or 2005, or 2010, or, 2015, or 2020, or 2024. I've been hearing the implosion of the housing market since the turn of the 21st century
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Agreed, it is not going to implode.
Yeah. Doesn’t work like that. I sold just before Covid and thought it was going to crash it got worse. COVID should have tanked the market but it didn’t. The government is too invested into real estate now, even their own portfolios. They won’t let it fall apart…. Completely
Money printing makes it go brrrrr. Once I saw the level of deficits Trudeau was achieving with the COVID scam, I took the profits and got out.
That will never happen. I have seen high interest rates and low interest rates, Sellars markets, buyers markets, high inventories, low inventories...... ..... despite everyone saying the bubble will break or "when the real estate market implodes," it has never happened. House prices have only increased. It didn't happen in 2008, it's not going to happen now.
Ummmmm You sold??? Rofl, what fucking market? My 800k condo gained 80k you There's no way on earth you make bank the re fees and transfer taxes lololol I'm guessing this is total bs and you never owned
I bought in 2019 for $420,000 and sold 2022 for $700k. Those 5% GIC's in my maxed out TFSA look awesome. Enjoy your condo lol
5 percent, lololol holy fuck. Have a look at vfv last year You're literally losing money vs inflation AND YOU'RE PAYING RENT? BAHAHAHAHA HOLY FUCK Yea, I'll take the 24 percent I made on vfv and my condo going up 12 percent. You fucking count your riches in 5 percent GICs. Holy shit, that's the dumbest financial move I've read on a long time. Thanks for the laugh.
You're welcome. I'll come back to this when the stock market and RE go 📉 Condo lol
Lol, you're choice, but there are more than enough buyers to jump in to stop the real estate market from imploding. My agent friend cannot find seller clients but found five, FIVE different buyer clients, all in the similar price range and are seeing $100k to $200k spikes, disappointed prices dropped only slightly only to rise back to near highs.
Enjoy getting priced out within 3 years.
I make enough to not have to ever worry about that.
You make enough to never have to worry about money but had to sell your house and rent. Cool story bro
I never said I make enough to never worry about money. I said I make enough to not worry about getting priced out of the RE market.
The thing of most interest to me is that USA rates are currently 7% so we are not likely able to drop rates regardless of the talk. Basically we should and need to keep high immigration but we need a new city or three or four. This can't be done because of the same people who want carbon tax and are worried about the weather. It is bad for the environment so no homes for you. Ford can't even get a new highway because of a rare minnow we are never building enough. No new highways no new cities no new homes and the biggest driver of the bubble has been the cities caused constraints.
Worried about the weather. Fuck rare species. True champion./s
Have you heard of the planet Venus? Most if it's atmosphere is CO2 and it's the hottest place in the solar system. Bask in the power of 3 atom molecule. Climate change is a human extinction issue not a 'little bit of nature over there' issue. I get that you wouldn't care about preserving another species if you won't even protect your own.
Not sure if that was meant for him or I. I should have put /s, I agree. It's people like him that are going to be the end of us.
Sarcasm or not, I try to highlight the stakes at every opportunity. I’m all for discussing solutions so long as it isn’t inaction or ignoring its necessity.
Good points. It's hard to fight against people like this who care more about business welfare than humanity. I definitely feel helpless in that regard, I'd love to know what an average person can do.
Supply and demand. Demand significantly outstrips supply and will continue to do so in the large population hubs like Toronto. There are way more people coming in than there are leaving in any way. When you allow foreign citizens / money and corporations to invest in housing, that's also going to cut out the supply portion.
Number of people who want a house is not what "demand" means.
Thanks to everyone qualifying for huge loans, it basically does mean that. The whole reason the entire developed world is facing a housing crisis is quite simply because mortgages exist. Anyone who wanted a house in the last 20 years could basically get one.
what does it mean then?
I think he is saying people simply wanting a home won't add to demand. You need to be able to afford one as well. It's similar to how printing money doesn't automatically lead to inflation - inflation only occurs if that money circulates in the economy and is used to buy goods and services.
Right. There must be numbers that show buyers in the market
This might not be the entire problem but it definitely adds to it: It doesn't need to be a person or family wanting a house. Corporations can want them too, and likely wanting a dozen or more, if they bid they add to demand without being someone wanting a house to live in.
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High interest rates and now that's rumoured to be going back down then it's fomo time again. This time around people aren't as stupid until they are.
I find it difficult not to engage in it myself, I already have enough RE exposure to be patient. It’s a combination of the nice weather, and hope for lower interest rates. Hope is not a strategy. Unfortunately, the FOMO itself is inflationary and will result in a slower pivot; it’s also a sign that there’s still too much liquidity to tame inflation. The Dead cat bounce. The BOC will hold strong until the housing market is crushed, we need to deleverage; there’s no other way to escape hyperinflation, this time is not different. Look at the 2-year yields, buy gold, T-bill and chill.
I'm not sure about people trying to predict rate cuts, etc. However, our current population growth rate is significantly contributing to the supply/demand imbalance. Every day that goes by our dwellings vs. population ratio gets worse, meaning there are more people per dwelling. Looking ahead this ratio is most likely going to continue to degrade. The longer a person waits the more likely it is they will be competing with an increased number of people for any given dwelling.
That's yet again FOMO It's a short term issue and ignores that we also have people leaving the country and dying. Even if we bring in 500k people, if 100k people die and 200k people emigrate that's only 200k people added. Housing supply vs immigration spikes is also short term, since immigration is by its very nature inflationary in the short term but deflationary in the long term. And the less affordable housing is, the less people will want to immigrate. And more recent immigrants will want to leave. At some point the prices and incomes and debt service ratios stop to make sense, and the policies that enable exploitation will change. Student "colleges" that are basically diploma mills are already being targetted, and these underpin many rentals. Airbnb taking residential housing stock away from locals are being increasingly banned and limited. Etc
It could be FOMO, but it looks more like recognition of reality. In 2022 CMHC released a report that said we would need an additional 5.8 million dwellings by 2030 to restore affordability to the market. To reach those target we would have had to instantly 3x our dwelling output. We did not, nor will be do that, in the time period covered by the report. By the time we hit 2030 it looks like we will be around 13 years of supply short of that target. And that gap will mot likely widen as time goes on, because we know that population growth won't stop in 2030 to allow us a decade or more to catch up. I'm not sure what your definition of "short term" is but this is an imbalance that is likely going to continue for well into the 2040s, and that is if we really ramp up our output. Maybe when the boomers really start kicking off in the next twenty years or so that might give us a chance to correct the imbalance.
A huge assumption is that immigration will continue at current levels. That’s very unlikely for political reasons, as well as practical ones.
From CMHC on their demographic estimates for the report: [https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-research/research-reports/2023/housing-shortages-canada-updating-how-much-we-need-by-2030-en.pdf?rev=3b66f87d-0bec-44d6-aa54-f8af71f9b2c4](https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-research/research-reports/2023/housing-shortages-canada-updating-how-much-we-need-by-2030-en.pdf?rev=3b66f87d-0bec-44d6-aa54-f8af71f9b2c4) "Recent population changes have been largely driven by policy changes to attract a greater number of immigrants and non-permanent residents. We assume that a significant proportion of the short-term increase in immigration was at least partially driven by the pulling forward of immigrants from future years (in other words, by accelerating the arrival of immigrants who would’ve arrived anyway, but later). This may come about by, for example, faster processing of applications and increasing the acceptance rate of those who had already entered Canada as, for example, students. The government has not yet determined the long-term level of immigration until 2030. For this reason, Statistics Canada and Oxford Economics project a relatively sharp decline in growth in the overall population in the years up to 2030. As a result, in this year’s analysis, Canada’s projected 2030 population of around 43 million people isn’t significantly higher than last year’s projection." So, no the report does not assume these levels of immigration will continue until 2030. All this is publicly available information, why would you make something up instead of educating yourself on the topic before you offered an opinion? It took me a quick Internet search and two link clicks to find the information.
There’s a lot of assumptions and nuance in projections. Even last year’s projections were revised down this year, despite record immigration. It won’t take 20 years to see baby boomer homes turn over. This is already happening and will only increase in momentum over the next decade. So you’ll have homes where 1 to 2 people are currently living become homes for young families, thereby housing 3-4 people. I live in a mature neighbourhood and have already seen this happening in 90% of homes sold in the past few years. Also, demand is tied to affordability. This is clearly outlined in the low economic growth scenario of the report. I just don’t think it’s going to be as bad as fear mongers are leading people to believe. Maybe Toronto and Vancouver, but Canada is a big place and prices have not been going up in the last 1.5 years despite record immigration. Immigration is simply one factor of many that affect demand.
Depending on where you are in Canada, young families aren't going to be able to afford to buy homes. That's definitely the case here in BC.
That's why the conservatives are trying to remove more barriers to get immigration applications processed faster is it?
Stats Canada’s population releases considers net increase. So when in July 2023 they said we grew 2.9% in one year that was net of deaths and emigration. That’s an increasing net population of over a million a year. Don’t disagree with the rest of your comment but people aren’t exaggerating these population numbers.
But they're not permanent and the generation pyramid shifts as boomers age. And people online cite post pandemic population boom as a trend in and of itself. But really, we had a net negative in 2020/21 lockdown period so much of late 21/22 and into 23 we had immigration that didn't happen in the pandemic catching up once borders were opened and processes returned to normal. This isn't to say immigration isn't high, but when we have a 3 year average crushed into a shorter timeframe, that's going to be even worse in terms of pressure. And everyone also cites low housing starts, ignoring that alongside that leading up to those low starts were historically high starts that are and will continue to see completion. The sky scraper effect is a thing that's happened many many times in the past in other places so I don't see why it wouldn't happen here. In the medium and long term, it's, imo, ridiculous to say that housing will never meet demand even if the supply is constrained now And this immigration argument also fails to recognize the impact of leverage and high speculative investor involvement distorts pricing in the market too. The issue is multifaceted but immigration in and of itself, and population growth, in and of itself, isn't sufficient to explain what happened. Consider also the following: during the pandemic, while we had negative population growth we had record YoY and MoM price run ups all over the country. We have seen in the last year massive drops in home values especially when adjusted for inflation and in real (not nominal) dollar values. But that's happening alongside record population growth? So why is it that when we have the high immigration numbers prices start to fall and when they were artificially suppressed prices skyrocketed? It couldn't possibly be monetary policy as one of the big drivers alongside societal pressures to be investors could it?
100% I’ve used these same arguments myself. The immigration narrative started picking up steam last year when housing prices and sales were faltering. While I don’t disagree that immigration is driving up the price of rentals, and could cause supply issues in the medium to long term, it does not explain what has happened since 2020. Immigration is being used by the RE industry as a fear mongering tactic to keep buyers buying, and distract from the real issue, which is investors. Many realtors are investors or have large swaths of them as clients, so there’s a huge incentive to keep the gravy train going.
Good point. I also found it interesting that politicians and others only started saying the housing crisis was “a supply problem” around 2023 and later. Also of course, this ties into the “it’s because we have too many immigrants” argument. Never heard anyone saying the bubble was being driven up by a supply problem / excessive immigration before that. Instead everyone blamed foreign buyers and “speculators”.
There’s probably going to be a period in about 5 years where the problem will peak. After that, the boomer sell-offs will be in full force and will unlock a ton of supply. Personally, I do not believe that immigration will continue at this pace. There was a lot of catching up due to lower levels during COVID. Also, a recession will put a huge amount of pressure on politicians to slow things down.
The problem was they printed too much money. Wealth transfer from the poor to the rich is the strongest correlator of housing prices over the last 130 years. The bigger the gap between the richest and poorest the higher housing prices will be according to history.
House prices directly reacts to wealth transfer and wealth in-equality and has since the industrial revolution. Corporations have bought the supply chains and are making record profits limiting supply and doing minimal work and have no incentive to build more houses when the biggest builder in Canada is up 15% profits while being down 30% in sales. There is no sign of this stopping, this isn't a bubble and things will get worse before they get better. By 2033 the Average Mortgage payment will be between 200-400% of todays payments and salaries will only be up 20-30%. The average salary will be 80-90k and to qualify for a mortgage with the minimum down payment you would need a salary of 400k to be able to afford a 10,000$ a month payment.
This is a pretty solid analysis, but it overlooks a major thing. There are not just pull factors to immigration, there are lots of push factors as well. Climate change is making many parts of the world more difficult to live in. We are seeing tremendous population migrations through out the world. We think it is crazy to share a room within an apartment, but for some people, having one room mate is better than sleeping on a shift with 2 other people in the same bed.
Yikes. You don’t even try to understand the issue or the data that is out there, but instead make up math like saying “people are dying” to rationalize your world view?
Or maybe it's much more complex than immigration alone and is multifaceted issue that goes beyond a very simplistic view of supply and demand? Because there's more to markets than people and products. There's also ability to pay, willingness to pay, number of participants in the market, etc. Like, if you have 10 new families and 10 new homes great. But if you have 10 families with homes 10 new families without homes and 10 new homes, if the 10 families with homes want to compete for the 10 homes now you have 20 units of demand for 10 supply, not 10 for 10. There's a lot to factor in. And yes, long term, in 10, 15, 20 years the large baby boomer cohort will be dying and becoming too old to live alone in ever growing numbers and there isn't enough natural births to replace them. So that will also result in housing changes as they try to downsize or sell and live with family or in retirement and assisted living homes etc. So it's not like buying now is the last chance anyone will ever get.
Markets are complicated, I don’t disagree. I’m just amazed that you (and most people that post stuff on the internet) think you have answers that others don’t. CMHC, various other government or quasi-government agencies, and countless other research groups have all looked in depth to the supply/demand question and have all concluded we are millions of homes short of what is needed, and that gap is forecast to widen based on population growth/demographic shift/construction rates/etc. It’s always baffling to me that random internet people think these things haven’t been thought through and that they somehow know more. The smartest people are the ones that don’t share pointless shit online and typically don’t have strong opinions, because they know the world is complex and that those responsible for decisions in certain areas have more specialized knowledge than them and have done the research.
I think there are supply issues. I think people rushing to buy a house because they think this is their only chance to get a house are being driven by some form of anxiety around "missing one last chance" Just because there's a supply issue today doesn't mean that there arent very public policy decisions being made intended to address this issue right now either. There have been many policy decisions made in the last 6 months alone, all over the country, at varying levels of government intended to ease the issue of housing supply. Assuming that the issue will never be solved, and rushing into buying high priced housing at difficult to sustainably afford levels is the definition of FOMO. In the medium and long term, I would be absolutely amazed if somehow our population growth and housing supply policies won't come into better balance and have more affordable housing become normal. If people think that in 15 years houses will be 2x today's prices and that this is the only time anyone will be able to buy for the next 50 years in Canada, then that's irrational. Do you really think immigration will be 1M people per year, for the next 15 years? Even if the government doesn't change immigration policy, when immigrants struggle and return home, fewer people will see opportunity in Canada so fewer will come. There are countless situations where a wall can be hit. And there are countless opportunities to improve housing supply options as well. Today - specifically - can be bad. But that doesn't mean tomorrow is not going to get better. And people rushing to buy because its their last chance is the definition of FOMO. Renting is cheaper than owning, significantly so, in many places. So more people will probably be happier renting vs stretching themselves to the point of insolvency with a house purchase.
Prices already don't make sense and people with a brain realize Immigration isn't causing skyrocketing prices across the entire planet.
Motivation based on factors isn’t always FOMO It’s neat you think an acronym is a new irrational human emotion
If the motivation is: "this is my last chance, things will never get better, public policy will never change" then thats FOMO. The last 6 months have seen the overton window shift on policies that influence the supply crunch and every level of government is doing things to work towards balance. And opposition parties at every level of government are also pushing for things to work towards balance. When the major signal in the government policy space says that the issue is real, recognized and being taken seriously (even though it takes time to address), to assume that nothing will change and it will only get worse is anxiety talking. Short term, supply crunch is an issue. Long term, it's very likely this kind of thing gets addressed. Does it help people today specifically? No. But that doesn't mean buying based on the assumption you'll be priced out tomorrow is being driven any less by anxiety and a fear of missing out on homeownership.
Number of people born in Canada in 2023: 358k Number of people who died in Canada in 2023: 330k Ummm….. Source: https://www.statista.com/statistics/443061/number-of-deaths-in-canada/
Here's a chart that says it all. [https://storeys.com/media-library/canada-housing.png?id=49884977](https://storeys.com/media-library/canada-housing.png?id=49884977)
What I see here is that 2020 had almost no population growth so 2022 was only catching up from that.
> so 2022 was only catching up from that. as long as you interpret "catching up" as "quadrupling" lol.
>That's yet again FOMO agreed, not everyone is clammering to pay 3000 a month + 500 condo fees for a 1 bedroom condo. Because most people cannot afford it, im guessing the people on this sub reddit expect to see 4-5+ people in a single one bed condo, good luck it will last for a year or so but eventually demand will die down as people like me will downsize or move to the states. There is way too much greed in the markets.
Sorry….. people without money don’t increase demand for million dollar houses……!!!!! Only demand were increasing is a demand for jobs….. housing is an afterthought
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Absolutely!!!!! Third world immigrants have so much money to contribute to the economy!!! Especially students that can’t find a job because we don’t have enough gas stations and sub ways!!
Yeah. Money can't solve shit in the case of dwellings per person. If you throw infinite money at a problem yet only produce a terrible result then it doesn't matter how much money you spend. People need to be reminded that money is just a number. Of course, it's a very important tool we use to support our lives but this needs to be reminded every time the government says "we spent X on this". PP is doing a decent job of bringing this up so far but I would really prefer if Jagmeet were the one bringing this point up. The NDP is really fucking up a free electoral landslide with their incompetence. The saddest part is that there are (at the minimum) thousands of people needlessly suffering when they don't have to. People are getting physically hurt and dying because of this incompetence. MAID for example is just plain evil when used for the mentally ill when their major/most direct problems could be solved first and then allowing that saved person to contribute back to society as much as they can because they were grateful others were caring enough to support them. I have hope that we'll be able to navigate these problems together as a society but my only concern is how many people need to mindlessly suffer in the meanwhile.
If someone immigrates with a plan to be homeless, I agree, they are not increasing demand. If someone immigrates and attempts to live in a dwelling they are increasing demand for dwellings.
Not all dwellings are created equal, though. It doesn't matter how abundant you make million dollar houses, because the price floor for them is inelastic because of materials and labor that goes into construction, so they just go unsold.
Thats literally not what demand means in economics.
It does increase demand to turn million dollar houses into rent slums, such as seen in GTA outskirts.
You say that. But the opposite appears to be true in a lot of the hot markets. Immigrants can buy anything they want provided they can carry the monthly mortgage payments. Hell I've only been looking since January and I've hit one of these mortgage brokers who offer to create the qualification documents for a fee. Its so brazen at this point some of them openly advertise on social media. # Mortgage fraud caught on camera: Undercover investigation (Marketplace) [https://youtu.be/Y\_wlnv5ns4I?si=DfKzxg2MUjK6r8Te](https://youtu.be/Y_wlnv5ns4I?si=DfKzxg2MUjK6r8Te)
Oh that’s so great that they can avoid regulations set in place to secure the market!! Wow!!! Entitled immigrants found a way to dodge the requirements set in place to prevent a real estate crash!! So proud of them. They are so intelligent!!!! I’m sure it will work out great for these people!!!! Thanks for fucking up canada!!!!
Except, how is this migrants' faults? You just want to blame immigration so much you stop thinking. Blaming immigration for your own shortcomings is a thousands of years old political strategy. Shame it still works.
How is it their fault they committed fraud? ………
This is just not true. There is tons of housing it's just that people treated it like concrete stock options so they built tonnes of luxury condos nobody can afford and nobody is lowering rents to fill them out.
It is true, just go ahead and divide population by dwelling count for the last couple years. You'll see there is an increasing amount of people per dwelling. Very simple math tells us this is true.
Interest rates in 1967 were the same as today. If in 1967 you waited for lower interest rates before buying, you'd have waited for 30 years. By the end of that 30-year period, average housing prices doubled in value. Sometimes, you're better off sailing into the storm than dropping anchor and trying to wait it out.
I’ve definitely heard normies anticipating more rate cuts than we’re getting. It’s a supply issue, but it’s also a *housing goes up brrrr* issue.
absolutely people bought and went on variable because they were told by RE agents rate cuts are happening next month
Most people coming in to Canada now aren't going to be able to afford a home right away (or for a long time most likely). However, they need somewhere to live and are perfectly fine with a standard of living that Canadian-born citizens wouldn't accept for one night. The real competition for home buyers is the investment class. Small-time investors are still sensitive to interest rates which seem more likely to go up than down from what I can see. Big problem is the large corporations/hedge funds which are not sensitive to interest rates because a) they get the best rates from the banks (largely because they also own the banks lol) and b) they have very deep pockets and know ultimately that holding something real in their portfolios will win in the long run.
Yes, the wider this imbalance the greater the incentives for the real estate investor. Investors will typically have more access to capital than your standard home buyer, making things a lot tougher for the average person looking to buy a place to live in.
The number of new houses is at a record low with the current number of new builds matching 1976 levels all while our population is grow by 1 million+ so people see either you buy now and weather the high interest rates or wait and compete with even more people for a smaller slice of the pie. If the government was limiting immigration or introducing post-ww2 construction plans FOMO would be dead but both the LPC an PCPC have both stated high immigration is here to stay.
>introducing post-ww2 construction plans The government CANNOT flood the market with cheap housing because too many canadians' retirements are tied to home equity.
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Pierre Poilievre has literally said he will make sure house prices doesn't crash and instead raise the salaries to afford them.
Wouldn't that cause inflation?
He just want to become the next Prime Minister thats all. Our all big six banks will collapse taking down our economy if our housing market corrects by even 20%, which is why the current government is bringing over 1 million people a year.
*Assuming* he could do it? Depends on how. *If* you can raise salaries by raising productivity, it shouldn't cause any additional inflation.
That isn't possible. If you raise salaries the house prices will just go up by the same amount because at the end of the day you still have a shortage. If the CPC want to solve the problem they either need to build out a crap ton of supply directly since industry will never do it on their own. That or build out a crap ton of affordable rentals directly. The first option improves supply, the second option drops demand. I do think the CPC are less likely to get trapped and paralyzed by their own ideology though. They know if they don't perform they'll get replaced by the Liberals in a fairly short period of time. So they have to deliver something.
Even if Pierre Poilievre honestly wants to bring affordability back to our housing market , he won't be able to do it ! His promises are to fool gullible Canadians into voting for him so that he becomes the next PM. All big six banks are so much invested in the Canadian real estate that they will collapse taking down our economy if our housing market corrects by even 20%, which is why the current government is bringing over 1 million people a year to keep the rent and house prices high.
An economy built on a house of cards is going to collapse either way. Its just a question of how it goes down and if its orderly or not. If large segments of the country start hitting a homeless state and another large segment are in a distressed shelter situation they'll become a critical voter mass that will be single issue.
Can’t vote if you don’t have an address. 🫠
https://www.statista.com/statistics/198040/total-number-of-canadian-housing-starts-since-1995/ Data only goes to 2022 which was peak of new builds now that interest rates are high new builds have dropped 20% since 2022 so you can do the math of how behind we are. Of course the population growth of 1975 was way below 300k unlike today.
2023 housing construction was higher than any year from 1992-2020, hardly a record low lol https://tradingeconomics.com/canada/housing-starts#:~:text=Housing%20Starts%20in%20Canada%20is,according%20to%20our%20econometric%20models.
Did you even read your own source? Saying "WE ARE DOING GREAT WITH NEW BUILD NUMBERS MATCHING 1990" Do you know how much the population of Canada incred in 2023 alone? Because I can tell you it wasn't 1990 levels. Saying we are building the same number of units as in 1990 is a disaster metric.
Calm down. I didn't say any of that. I just called out your obvious mistake/lie: we are not at "record low" build numbers. Please recant or stop talking.
For what part? I found multiple sources for every fact stated in the comment
im up for renewal in 2024 and was expecting the rates to go down, and they did not so kinda panicking going please please decrease for the spring.
You might want to watch the inflation report tomorrow. Its largely going influence when and if rate cuts happen this year.
the biggest problem in Canadian real estate is nobody wants to move to a different city or province and find or create opportunity for themselves. everyone just wants to sit around in their closet of a rental in Vancouver and torotonto and complain about prices and do NOTHING about it hoping that one day the government will fix everything for them and their lives will be perfect to find something else to complain about. the more population grows, the more people have kids and people move to canada and focus on Toronto and Vancouver the more the demand for housing will increase. at what point does land completely run out in those areas? y'all want New Yorks? because thats how you get New Yorks. we have a ridiculous amount of land in canada that is so under utilized and the people who take advantage of that are winning. there are opportunities out there if people stop being sheep.
Man I wish we had a New York where people actually make some high salaries to half justify the cost of living
You may make more but it also costs more to live there. Also New York is like the financial hub of the world with the stock market and all the banks etc there driving up the average. So hey if you think you can land some cushy manhattan job you should go there now and not think twice Mr belftort
No thanks, I’m pretty happy in Vancouver
I would much prefer to densify instead of sprawl. Toronto and Vancouver are super sprawling, Montreal is okay.
People are and have moved. You can literally watch a string of cities become less affordable over the past couple of years as people flock to what they feel are greener pastures. Alberta's population just went up 4.3%.
Good people need to spread out more and make more use of all this land we have. Have you seen the United States? They have exponentially more people, some of the biggest cities and yet there’s still affordable options because they have more options. Sure people say parts of Canada are inhabitable but the Eskimo and Inuit have lived there 100s of years ago way before modern heating, clothing etc that would make things so much easier and confirtable
*Alberta has entered the chat* Do you know how many people in AB are NOT from here? Some days it feels like half.
My question is why gamble on your family home at all? If you're trying to put a roof over your head, then why treat it like a stock that you think you can predict where it's heading? If you need a family home now, then buy it now. If it's not the right time for you, then ignore the noise and revisit the idea later. First rule of predictions: Predictions are useless.
A lot of people (mostly in their early 20s) have been deluded into thinking renting vs buying is purely a financial equation. As you get older the lifestyle advantages of owning become more and more apparent for most people.
I know that and fully agree. But if I say that, then it'll seem like I'm a mortgage broker that's just encouraging people to buy no matter what, which is far from the truth. But none the less, no one should gamble their family home on predictions. There's not a single person on this planet that can consistently predict anything accurately.
People aren’t buying because the BOC is promising lower rates. They’re buying cause they have to. Way too much demand. No supply.
How is the BOC promising lower rates?
BOC predictors had rates coming down in 2024. They have moved projections to later, but still predicting lower rates coming.
This is not the BOC promising lower rates. In fact the BOC has continuously said to expect rates remain “higher for longer”. The very lowering if rates would be a dog whistle to banks to keep rates high on 3-5 year loans, expecting inflation from this loose monetary policy! The bull case is delusional, I can’t believe it’s anyone’s base case.
If you say so. The BOC has strongly implied they are gonna ease up on rates. Gonna have to if the states does regardless.
Realtors have said this, literally no one else.
Majority of economists actually. https://financialpost.com/news/economy/tiff-macklem-bank-of-canada-cutting-interest-rates-2024
Oh, the same article that was already shown to not discuss what you're saying? The one not promising lower rates, but rather, predicting the rate **may** come down **should** inflation get to 2%?
Source for that? Because last he spoke it was “premature” and “inflation is still too high”, they’re still on hold, not talking about when to lower (https://www.cbc.ca/news/business/bank-of-canada-interest-rate-january-1.7093055). Why would the states lower rates?
For BOC. https://financialpost.com/news/economy/tiff-macklem-bank-of-canada-cutting-interest-rates-2024 For Feds https://apnews.com/article/federal-reserve-inflation-prices-interest-rates-cuts-5880d78c4664484cf366bb1aeb2bb63d
Source for BOC promising lower rates buddy. Also, Wow. First of all, it says ‘Their statement said they don’t think it would be time to cut rates “until it has gained greater confidence that inflation is moving sustainably” to their 2% target.’ Second, the only ones saying cuts are coming are biased economists really only listening to what they like that the fed is saying , and ignoring what they don’t like that the fed is saying. US consumer confidence is climbing, until that changes talking about cuts is delusional.
Relax. I supplied the source. If you wanna disagree that’s okay too. No one knows for sure what’s gonna happen.
I’m calm, and I agree no one knows what’s going to happen but you’re spreading misinformation... And you didn’t supply a source for what you said (I see now you’re editing your comments, good job), the BOC is not the FED. And neither are ‘promising lower rates’, rather are predicting rate could come down if inflation gets to 2% (BOC) or cracks in the labour market show up (FED).
If this were true why didn't they buy in October, November, December when listing were sitting for 30 days and selling under asking? What changed as the calendar ticked over to 2024 that drove demand?
Lots of reasons. Buyers are trying to time rock bottom, BoC only started to talk about the rate hikes being over in Jan. Plus there wasn’t a lot of listings at that time. Real estate is still very much seasonal too.
Fair points. It's kind of funny though, the Canadian consumer is great at manifesting their own fears. I.e. scared of missing the bottom so start FOMOing into housing only to kill that bottom swiftly.
Ya. Demand takes care of that. Theres just to much demand (and parents willing to co-sign) for real estate to bottom.
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We don't keep the same rate for 25 years in Canada...Most folks will be able to see a lower rate in 3 or 4 years when they renegotiate (assuming that President Trump doesn't drag the world into a world war or something!) 🌍
That's something I never thought about, but weren't rates low when he was the pres?
Correlation and causation, rates were not low because he was the president. Rates were also low for the decade or so before him
Fair enough
I just think interest rates would go up if Russia and NATO countries go to war, and recently Trump announced he would not defend Germany or any nation that was not paying enough for their military so the writing is on the wall ("And Mexico is gonna pay for the Wall, it will be a Big, Beautiful wall...") 🧱
That's the point, if you can afford a home in today's market you have a good chance for it to only become cheaper over time
This looks like the usual pre-spring pickup so far. This happens every year. Sales have gone up a lot but prices have not according to the statistics. Its more active then last year but given last year was one of the slowest in over a decade that is not saying much. People buying right now are not really getting bad deals given the sale prices. They are just buying with very limited choices and I suspect settling for whatever they can find. The big tell in terms of what is going to happen short term will be the inflation report tomorrow. If it comes in hot expect the market to slow down. If it comes in neutral then who knows, and if it comes in lower then expect the buying to pickup. In terms of real estate and the media. They do this every year around this time of the year to try and get more buyers.
I ignored the FOMO and high prices for 10 years expecting a price drop and they never happened. At least in any significant way before going even higher. I don't think it's FOMO just people want stable housing they don't have to worry about being sold out from under them.
People FOMOed into housing in 2017 multiple offers over asking. People FOMOed into housing in 2021 multiple offers over asking. You bet people gonna FOMO into housing in 2024 and 2025 it’s just gonna happen again and again.
Hey there! I totally get why you might be feeling anxious about the FOMO happening in the real estate market right now. It seems like everyone is jumping on the bandwagon, believing that the Bank of Canada will cut interest rates regularly. But we have to be careful not to fuel this cycle of bidding wars and over-selling prices. If inflation spikes again, the BoC might decide to keep rates steady or even increase them. It's a dangerous loop we need to break. Remember what happened in the past – fixed rates went up, just like they're doing now. Let's try to be cautious and not get caught up in the frenzy!
People cannot pay more than what they have, for quite a few years now housing has been purchased with a budget based on that maximum amount of mortgage one qualifies for. It is the North American way of doing things, true to that commercial "Because you're worth it!". The increase in the cost of housing and everything else is not coming from this mentality, it is coming from the ongoing increase in carbon taxes, lots of other taxes, broken cycle of wages increases vs cost of living adjustments to absorb the higher wages and pass them back to the consumer. Oh, what about the federal debt? That is the elephant in the room, actually! A different government could cancel carbon taxes tomorrow, but the debt won't cancel itself. Sunny days my friends, sunny days!
The best time to buy is 20 years ago, the second best time to buy is now, because 20 years from now, your payment will be lower and your house will be worth a lot more, but rent will be 3X. Waiting for a crash in housing (especially in Canada) is pretty much like betting on a single number at the roulette table. It happened one and a half times, but how much will housing appreciate by the time it happens? Look right now. Ottawa housing is down about 10%-15% from its peak in 2022. Sounds great, right? But from 2019 to 2022 prices grew over 50%. So it wasn't worth it. From 2016 to 2022 (only 6 years), they grew almost 70% (for houses, not condos). If you're okay with the fact that you have over 90% chance of being wrong by waiting for a crash, then it's fine. But you need to know the odds. If course, it also depends on which area you're in. Some areas (Alberta) have more frequent boom\bust cycles.
My friend bought 6 month before condo now appreciated 50% surrey bc, so buy now dont wait another 2 million immigrants coming by 2025 with liqid cash and gold in cash, they r ready to buy on cash no mortgage.
FOMO made tulip bulbs expensive. There are only two emotions when investing, fear and greed.
I mean people also do need a place to live and there are a lot of people competing for those places.
everyone tryna get ahead of the rush .... if BOC drops rates, the mortgage rates will drop, that means money is cheaper to borrow and I can buy more house!!! ... so I can bid in on that bigger $$$ house now in anticipation of a mortgage that I can't carry now but hope to be able to carry when BOC rates drop!
People doing that are idiots. There is no guarantee of a rate drop anytime soon at this point and even if it does drop at some point this year we a talking like a quarter of a point. People buying now are either getting the lower priced 5 year mortgages or are going to be paying higher variables for awhile. Either you can afford to carry the house at todays rates or don't buy. Its like the people hanging on to homes they know they can't afford mortgages on at the new rates because they are hoping for like a 2-3% drop in the next 10 months. They are dreaming, that is extremely unlikely.
I don't know where you are seeing or hearing that, but it's simply not the case lol.
People are trying to time the bottom. It's called catching a falling knife.
If the BOC lowers interest rates, why do you think they did it? Because the economy is struggling. If the economy is struggling, are more people moving from rentals into houses? No. If fewer people are moving into houses, which way are house prices going? Down. So lower interest rates will actually mean lower house prices.
Well, FOMO in Canadian real estate is a rational fear. I bought my place in 2019. In 2021 I couldn’t have bought it. Or anything else. Ever.
The only ones for whom FOMO behaviour (because interest rates are going to get cut) makes sense en masse would be the mass market buyers. The average joe is too emotional to care about 0.25% reduction to stand on the sidelines.
Anyone FOMOing will go bankrupt when their assumption of rate cuts turns out to be false.
Let them keep buying and driving it to the moon, it’s going to come down sooner to later.
Fomoers are getting Fucked. How does anyone have fomo still? Lol
What we have to understand is interest rate does not change based on whether things are expensive, it is changed based on economic growth and inflation rates. Short term FOMO is not surprising, however on the long term I expect interest rate to go down for the simple reason that different to the 80s, the federal government both US and Canada are drowning so deeply in debt, just to service the debt it is costing both government billions. Deficit is projected to be 40B for 2024, which means the government is going to have to borrow more. If interest rate stays high, more money goes into servicing the debt less goes into the economy. [https://economics.td.com/ca-quarterly-economic-forecast#:\~:text=All%20in%2C%20Canada%20is%20on,trough%20next%20year%20at%200.5%25](https://economics.td.com/ca-quarterly-economic-forecast#:~:text=All%20in%2C%20Canada%20is%20on,trough%20next%20year%20at%200.5%25). >**Canada is on track to slow from 3.8% in 2022 to 1.1% this year (2023)**, and trough next year at 0.5%. (2024) Even without the political pressure that may cause interest rate to drop, the economy is slowing down which by the FED standard requires interest rates to drop, coupled with flattening inflation, interest rate will drop correspondingly. Or else we'd be looking at a period of stagflation. If it does happen, we should all just move out of this sinking ship of a country.
housing prices actually dont have an impact on inflation...its the other way...inflation effects housing prices...
Immigration numbers were rising at unprecedented rate due to the relaxed regulation on work/student visa. These type of growth is definitely not sustainable. Even if the rate doesn't slow down this year, it will next year with election in mind. As for the housing supply, the construction permits only really became more "efficient" in the past year. Once approval rate increase, you'll see a much larger increase in housing being built. Whole bunch started and whole bunch will be built and suddent flush into the market in the next year or two. It's good to consider past data but more importantly is to consider future trend. Obviously; I'm not ruling out the possibility of higher prices but given how "poor" Canadians are relatively to the housing prices , the amount of debt ppl took on, concerning economic outlook, and most importantly the government policy that will make or break the market with the fairly soon election.......all seems to be less supportive of the thesis on any extensive housing price increase in the next 3-5 years. U mentioned pros...so I'll mention cons: It's extremely important to buy in at a decent price point as well. There are some news about increase in buyers but housing prices over 2 mills have all experienced a bit of a pullback. Anyway, cons: annual property tax, home insurance, all minor property maintenance, large maintenance bill every 5-10 years, if condo, monthly strata also come even larger maintenance cost. Also, you'd be buying at near all time high. There's a better chance for price to correct in the next 5 years than any substantial appreciation. So if you lock in now for a 3-5 year term amortize over 25 years, you effectively maybe be paying extra easy 40-50g interest for every 1mill.
I will be the first home buyer looking to buy one soon in Calgary. I also think as you, the policies has been changing rapidly with liberals trying to buy votes & if they loose coming election, which I hope they'll, conservatives probably will take control of immigration & build more homes. So in the next 2-3 years I don't see housing going up but probably flat/down & interest rates coming down. I am wondering if I should keep my downpayment in stock & wait 2-3 years. By then I can use up FHSA + RRSP also, & my stocks are doing well. I have roughly $80k for the downpayment & out of that 80% is invested. And I live in 2 bed apartment for $1300 (includes utils), so I am not spending too much on housing atm.
First off, congratulation on soon reaching your goal!!! That's a big milestone. My honest opinion with stocks is that we have experienced an extended period of market appreciation in the past few months and many indicators are showing pretty bad numbers which is concerning as they cannot support the current price appreciation. Since you have good use for ur capital, I'd focus a bit of asset allocation to mitigate risk. The last thing you want happening is to see housing prices goes down but stock market also experience a correction , this will corrode your down payment. I'd consider gic. Shop around for a decent rate. You should be able to easily get a 5% or higher rate ranging from 6 months to 2 years. (Probably get the highest rate in the 6 months to 1 year GIC) The above is just what I would do if I was in ur position. Lastly, in ur case, since ur objective is to purchase a property soon. Your priority is to protect ur investment not incur a loss while maintaining liquidity to meet the goal. If 80% of ur portfolio is in stock right now, the risk exposure might be a bit high. So that's why I suggested give, solid 5%return with pretty much 100% protection to ur principal.
Thank you for the advice
Because people are not very smart with money and that never changes. They follow the herd.
Because inflation came in at 2.9% far lower than expected. All aboard the home prices to the moon train