Canada's 'housing bubble' deemed close to bursting

[Truenorth00]

Originally Posted by Berklon

^ The only way baby boomers will leave their home is in a body bag.

I know so many baby boomers and even older who just wont give up their home. They want to die there. Hell, I know some who have upgraded homes recently and a bunch of them still have a mortgage in their 70s.

Younger people better get used to renting. This will be their only way.

It's going to create some interesting political dynamics when the generations kick over. Not in the least because the Boomers need younger generations to substantially fund their healthcare and homecare. I'm foreseeing a lot of backlash coming. Don't see why younger generations won't demand that Boomers cash out that equity to fund their own care in lieu of raising taxes and debt for everybody else.

[Innsertnamehere]

people have been talking about the "boomer strain" for ages - reality is that it's already happening. Boomers are solidly in retirement age right now, even early Gen X are starting to approach retirement now too. The older boomers are almost 80 and are starting to die. we are at that "peak care level" right now, and it's generally fine.

[thewave46]

Originally Posted by Truenorth00

It's going to create some interesting political dynamics when the generations kick over. Not in the least because the Boomers need younger generations to substantially fund their healthcare and homecare. I'm foreseeing a lot of backlash coming. Don't see why younger generations won't demand that Boomers cash out that equity to fund their own care in lieu of raising taxes and debt for everybody else.

As long as the music keeps going (i.e. governments and people can borrow cheaply) there will be no change.

I don't get the immediate sense of backlash, because the population shift is more dynamic in this country. A huge generational conflict isn't at hand because Canada's immigration levels have fattened up our working age population, demographically speaking.

I find it hard to imagine a newly immigrated Canadian would view Boomers as the enemy, because that generational conflict wouldn't make much sense to them.

[Truenorth00]

Newly immigrated Canadians aren't involved in elections.

I imagine the debate will go something like this:

"We need more funding for homecare."

"But we also need funding for daycare, social housing, job transition for fossil fuel workers, etc. Why can't seniors use the equity in their homes?"

I don't think anybody is seething the thought of hurting grandma. But they won't feel obligated to pay when they have needs they perceive as pressing and they feel financially tapped out.

We're already a country that spends substantially more on seniors than young people. That, like others, will basically have to correct to a more reasonable balance in due course. Politico had a great piece a month back called, "The politics of Gerontocracy in Canada" describing this:

Consider a 2015 study that estimated Canadian governments spend between C$33,321 and C$40,152 per person age 65 and over and just C$10,406 and C$11,614 per person under age 45. Or a 2013 report that concluded Canada was among the “least intergenerationally just” countries in the OECD.

https://www.politico.com/newsletters/cor...olitics-of-gerontocracy-in-canada-795394

[Truenorth00]

I saw this tweet yesterday, that about sums it up:

Generational goals.

- Boomers: A house with a two-car garage, and a job with a pension with only a high school education.

- Gen X: A house with a university degree.

- Millennials: Basic shelter with a masters degree.

- Gen Z: A planet to live on.

https://twitter.com/StephenPunwasi/status/1404254750229647361?s=19

[thewave46]

Originally Posted by Truenorth00

Newly immigrated Canadians aren't involved in elections.

I imagine the debate will go something like this:

"We need more funding for homecare."

"But we also need funding for daycare, social housing, job transition for fossil fuel workers, etc. Why can't seniors use the equity in their homes?"

I don't think anybody is seething the thought of hurting grandma. But they won't feel obligated to pay when they have needs they perceive as pressing and they feel financially tapped out.

We're already a country that spends substantially more on seniors than young people. That, like others, will basically have to correct to a more reasonable balance in due course. Politico had a great piece a month back called, "The politics of Gerontocracy in Canada" describing this:



https://www.politico.com/newsletters/cor...olitics-of-gerontocracy-in-canada-795394

Perhaps, but I get the distinct sense that the areas with the biggest divides in affordability of housing and the most acute Millennial vs. Boomer demographic conflict aren't the same places.

In Toronto's suburbs, the re-emergence of multi-generational housing is coming to pass. The ideal of the nuclear family in a detached home - a post-WWII norm - is ending and is only retained in the mindset of the descendants of the Boomers. Who are fading from history as Canada changes.

[Truenorth00]

That isn't going to change the policy argument though.

If you're a Zoomer with no dependents, trying to live on $50k a year, you're going to be asking why you have to pay higher taxes for homecare to people who have substantial wealth in their homes. And if it's intergenerational homes, there's even less reason for you to have to pay more. Their kids are inheriting the house. They should pay for that care.

This discussion is absolutely coming. And anybody who thinks whiny Millennials will be driving this, having talked to Zoomers who have it way worse.

[Innsertnamehere]

Originally Posted by Truenorth00

I saw this tweet yesterday, that about sums it up:



https://twitter.com/StephenPunwasi/status/1404254750229647361?s=19

It's such a hilariously negative take on things.

I mean I get people love to complain, but man.

[Truenorth00]

Originally Posted by Innsertnamehere

It's such a hilariously negative take on things.

I mean I get people love to complain, but man.

There's an element of truth to it.

[Innsertnamehere]

Originally Posted by Truenorth00

There's an element of truth to it.

is there though? How many people with masters degrees do you know that are struggling to access basic shelter?

Everyone I know with a masters degree can easily afford a detached 2 garage home in a GTA suburb, just as the Boomers could. Many make lifestyle choices for other kinds of housing, but it doesn't mean that option isn't there for them.

[JHikka]

Originally Posted by Truenorth00

Newly immigrated Canadians aren't involved in elections.

I don't think i've seen numbers on it but do new-immigrant Canadians ship their parents off to seniors homes at the same rate that white boomers do?

[Truenorth00]

Originally Posted by Innsertnamehere

is there though? How many people with masters degrees do you know that are struggling to access basic shelter?

It's tongue-in-cheek obviously. But it's not far off the mark in capturing the dynamics in play.

Also, I have no idea who your friends are, but I do know quite a few with graduate degrees that can't afford more than condos in Toronto. My brother for one. MBA and a graduate degree in engineering before 35, with nearly a decade of aerospace engineering experience on his resume. Non-info tech engineering jobs in Toronto just didn't pay enough, unless him and his wife wanted to move to Milton or Hamilton for a town house. They moved to Montreal for housing and sightly better pay now.

[niwell]

Most of my friends are in their mid 30s to early 40s with Master's degrees and good careers. The only ones who own property in the GTA received significant cash injections from parents or got inheritances. There's more to it than simple salary calculations, and lots of those would could technically afford it would be put in a very precarious financial situation.

[goodgrowth]

Originally Posted by Truenorth00

Newly immigrated Canadians aren't involved in elections.

I imagine the debate will go something like this:

"We need more funding for homecare."

"But we also need funding for daycare, social housing, job transition for fossil fuel workers, etc. Why can't seniors use the equity in their homes?"

I don't think anybody is seething the thought of hurting grandma. But they won't feel obligated to pay when they have needs they perceive as pressing and they feel financially tapped out.

We're already a country that spends substantially more on seniors than young people. That, like others, will basically have to correct to a more reasonable balance in due course. Politico had a great piece a month back called, "The politics of Gerontocracy in Canada" describing this:



https://www.politico.com/newsletters/cor...olitics-of-gerontocracy-in-canada-795394

Universal Pharmacare would push this even further. The idea of a bunch of seniors with net worth's exceeding a $1M getting their monthly cocktail of drugs completely subsidized just seems like more generational warfare.

Not saying Pharmacare is bad but I am skeptical of any politician that prioritizes it over fixing housing first.

[Truenorth00]

Originally Posted by niwell

Most of my friends are in their mid 30s to early 40s with Master's degrees and good careers. The only ones who own property in the GTA received significant cash injections from parents or got inheritances. There's more to it than simple salary calculations, and lots of those would could technically afford it would be put in a very precarious financial situation.

About the only way, anybody under 40 is buying real estate in Toronto/Golden Horseshoe and Vancouver these days. And probably going to be increasingly true in Ottawa and Montreal soon.

I have a feeling Innsertnamehere's friends aren't fully honest with him about their withdrawals from the Bank of Mom and Dad.

Heck, it's so common now. It's become a bit of a meme online. Every Toronto Life article about a struggling Millennial who succeeded in buying real estate eventually leads to a line about parental contribution. You just gotta find the line.

[thewave46]

Originally Posted by Truenorth00

That isn't going to change the policy argument though.

If you're a Zoomer with no dependents, trying to live on $50k a year, you're going to be asking why you have to pay higher taxes for homecare to people who have substantial wealth in their homes. And if it's intergenerational homes, there's even less reason for you to have to pay more. Their kids are inheriting the house. They should pay for that care.

This discussion is absolutely coming. And anybody who thinks whiny Millennials will be driving this, having talked to Zoomers who have it way worse.

Are Canada's demographics that bad, though? For somewhere like Japan, Germany or Italy, yes, I understand the issue.

For Canada? A country that's allowing 400,000 immigrants per year? Whose population pyramid is reasonably balanced compared to many other Western countries?

I think the change in Canada's demographics is going to obscure a lot of things and maybe shield us from the worst of it. I think a lot of the ideals of Western culture are going to change because Canada's going to change much faster than anybody really expects. The idea of the nuclear family in a large, inexpensive detached home with two cars in the driveway will fade, because that was never really sustainable in the first place. It was a fluke of a huge wealth bubble and gluttonous resources that couldn't last.

Strangely, I expect Canada to do quite well in the near future simply because the high expectations of descendants of the Boomers will be drowned out by the much more realistic expectations of new Canadians. Natural change really isn't driving Canada's growth these days.

[Truenorth00]

Originally Posted by goodgrowth

Universal Pharmacare would push this even further. The idea of a bunch of seniors with net worth's exceeding a $1M getting their monthly cocktail of drugs completely subsidized just seems like more generational warfare.

Not saying Pharmacare is bad but I am skeptical of any politician that prioritizes it over fixing housing first.

The thing is, it's not just one policy. Pharmacare does benefit more than seniors. The question, like everything else, is about who pays.

We have this weird idea that seniors can't be taxed or billed because they're all poor fixed income pensioners. In reality, there's a lot of millionaires who want tax breaks while sitting on substantial equity.

Moreover, allowing it to perpetuate to the next generation only makes it worse. The Boomers who do have substantial home equity pass it to their kids. And now you have a permanent inequality that could lock out a substantial portion of Millennials and Zoomers from owning homes for the rest of their lives. With probably worse outcomes for their kids.

I can't see any of this being politically tenable in the long run. The only question is whether the debate begins in 5, 10 or 20 yrs.

[le calmar]

Originally Posted by Innsertnamehere

Everyone I know with a masters degree can easily afford a detached 2 garage home in a GTA suburb, just as the Boomers could. Many make lifestyle choices for other kinds of housing, but it doesn't mean that option isn't there for them.

Not only a house, but a detached one with double garage and all, and easily to boot? I am surprised because this contrasts everything I’ve heard from my GTA friends and acquaintances.

[Truenorth00]

At least we know who has rich friends on this forum....

Or at least friends with generous parents.

[esquire]

Originally Posted by Innsertnamehere

is there though? How many people with masters degrees do you know that are struggling to access basic shelter?

Everyone I know with a masters degree can easily afford a detached 2 garage home in a GTA suburb, just as the Boomers could. Many make lifestyle choices for other kinds of housing, but it doesn't mean that option isn't there for them.

The "struggle with basic shelter" thing I can see being a problem in Toronto and Vancouver which is admittedly a significant part of the Canadian population, but it's by no means the majority. There's a big country out there.