Canada's 'housing bubble' deemed close to bursting

[suburbanite]

The problem with Canada is that we're much more like the Western European countries with all of our economic eggs in one or two urban baskets. We don't have that layer of non-alpha, but still opportunity-rich cities like the U.S. does with places like Denver, Austin, Charlotte, Salt Lake City, etc.

with Canadian oil unlikely to return to it's heyday, we really have two cities where widespread economic opportunities present themselves. Not to say you can't make a great living in Edmonton, Winnipeg, etc. but they lack a large and diverse enough economic base to attract immigration on a scale that would relieve some pressure from Toronto, Montreal, and Vancouver (immigration to Vancouver is a bit different though). Short of forcibly settling immigrants in certain places and hoping that quality jobs appear out of thin air, what do you do? People move to Canada for hope of a better life, and they're only seeing it in a few overwhelmed areas.

[rofina]

Originally Posted by Acajack

Skyrocketing housing costs only came to the fore as a major issue late in the game during the last election campaign. That's why I think a lot of people underestimate it.

I don't think we've yet seen just how big an issue this is going to become.

This is how you get populists.

Its so obvious.

Populist authoritarian's thrive in an environment of inaction.

Housing in Canada is such a prime target.

Coming up on 15 years of (deliberate) inaction by democratic governments, both conservative and liberal.

[suburbanite]

Originally Posted by rofina

This is how you get populists.

Its so obvious.

Populist authoritarian's thrive in an environment of inaction.

Housing in Canada is such a prime target.

Coming up on 15 years of (deliberate) inaction by democratic governments, both conservative and liberal.

It's a good point, but in Canada the number of active voters who benefit from the status quo likely still far outnumbers the young, disgruntled perma-renters.

[Acajack]

Originally Posted by suburbanite

It's a good point, but in Canada the number of active voters who benefit from the status quo likely still far outnumbers the young, disgruntled perma-renters.

Though don't forget that most Canadians treasure their "good guy" reputation a great deal, and that alone cuts down on the number of people who'd vote for a harder-edged populist. If only to keep up appearances.

Americans, Hungarians, Poles, Brazilians, and maybe the French (we'll see in 2022) don't give a 🞵🞵🞵🞵 about that, which is why you get...

[rofina]

Originally Posted by suburbanite

It's a good point, but in Canada the number of active voters who benefit from the status quo likely still far outnumbers the young, disgruntled perma-renters.

Agreed; for now.

The last 2 years has really put things on fast forward.

There has been articles coming online to the effect of "Recent immigrants disenfranchised with housing availability in Canada."

We just need another year or two of price increases, and on top of that return to 0% vacancy as immigrants arrive and rents increase.

[someone123]

Originally Posted by suburbanite

with Canadian oil unlikely to return to it's heyday, we really have two cities where widespread economic opportunities present themselves. Not to say you can't make a great living in Edmonton, Winnipeg, etc. but they lack a large and diverse enough economic base to attract immigration on a scale that would relieve some pressure from Toronto, Montreal, and Vancouver (immigration to Vancouver is a bit different though). Short of forcibly settling immigrants in certain places and hoping that quality jobs appear out of thin air, what do you do? People move to Canada for hope of a better life, and they're only seeing it in a few overwhelmed areas.

Lots of immigrants were moving to Edmonton, Saskatoon, London, Halifax, etc. prior to the pandemic. The era when Toronto/Montreal/Vancouver had a lock on immigration ended a number of years ago as provincial sponsorship came in. The "what can we do if everybody just wants to move to Toronto" narrative has lived on despite this changing. There is also a narrative that cities smaller than Vancouver only started growing in the pandemic era and this is off too. This trend was clearly good for a lot of places even if others like Vancouver might pretty obviously be overheated.

I think a primary question is what amount of immigration is optimal to Canada in terms of economic growth measured by true quality of life of actual live humans in Canada, regardless of country of origin. This is likely to be some substantial amount to the extent that Canada can attract and retain skilled immigrants.

There's another question of what to do about younger people and housing. If immigration really is a big windfall then it should be possible to materially help the people who aren't doing so well in this economy. If that's not possible then maybe we should question if this current system is in fact so productive.

The status quo seems to be to call people racist unless they blanket accept any immigration level, then call them snowflakes if they are upset about obviously having bad employment or housing prospects despite being more educated than the previous generation. Meanwhile the asset-rich portion of the population is doing incredibly well.

[WhipperSnapper]

Originally Posted by suburbanite

The problem with Canada is that we're much more like the Western European countries with all of our economic eggs in one or two urban baskets. We don't have that layer of non-alpha, but still opportunity-rich cities like the U.S. does with places like Denver, Austin, Charlotte, Salt Lake City, etc.

with Canadian oil unlikely to return to it's heyday, we really have two cities where widespread economic opportunities present themselves. Not to say you can't make a great living in Edmonton, Winnipeg, etc. but they lack a large and diverse enough economic base to attract immigration on a scale that would relieve some pressure from Toronto, Montreal, and Vancouver (immigration to Vancouver is a bit different though). Short of forcibly settling immigrants in certain places and hoping that quality jobs appear out of thin air, what do you do? People move to Canada for hope of a better life, and they're only seeing it in a few overwhelmed areas.

The places desperate for people are desperate for people because they have quality jobs that are going unfulfilled. Immigrants are settling in Toronto, etc. because we don't really intermix with different cultures as much as we think we do or do they want to mix with European cultures. Toronto, etc. is where their community is.

Another clear sign the system is also broken when immigrants are complaining about other immigrants. Immigrants that came here to have a better life are pissed at immigrants that came here to milk the system. This is eventually where political upheaval as it relates to immigration policy will occur. Not among natives and immigrants but immigrants on immigrants. It doesn't bode well for the Trudeau government come one come all vision.

[ssiguy]

Originally Posted by Acajack

Skyrocketing housing costs only came to the fore as a major issue late in the game during the last election campaign. That's why I think a lot of people underestimate it.

I don't think we've yet seen just how big an issue this is going to become.

The ONLY reason housing has become such a national issue is because it has started to effect Toronto and Toronto sets the national agenda for everything.

BC has had a housing crisis for 20 years and not a peep from Ottawa but when it started to really effect Toronto over the last 3 years then it becomes a national emergency.

If Toronto was the only affordable city in Canada and the rest of the country was completely unaffordable, we wouldn't be having this conversation.

[Acajack]

Originally Posted by someone123

I think a primary question is what amount of immigration is optimal to Canada in terms of economic growth measured by true quality of life of actual live humans in Canada, regardless of country of origin. This is likely to be some substantial amount to the extent that Canada can attract and retain skilled immigrants.
l.

Immigration in Canada is still framed in virtuous "save the world" terms and our governments and many Canadians have generally been reluctant to ask the "but is it good for Canada and Canadians?" question with a cold, hard analysis in mind.

[whatnext]

Originally Posted by suburbanite

Real estate developers first and foremost.

It’s also a boon to owners of a Tim Hortons or McDobald’s franchise.

[MonkeyRonin]

Originally Posted by casper

Vancouver has changed it is not a city of 1M. It is a city of 2.5M with a very dense core. Expectations are significantly different and it is closer to what should be expected in a larger city globally. I have a friend who is an engineer in Paris and her husband is a fire fighter. They raise their two kids in a small thee bedroom apartment in a three story walkup. It is a nice place but compact. That is the norm in many large cities in that 2M+ size range.

Meanwhile fire fighters and engineers in Toronto and Vancouver just wish they could afford to buy a 3-bedroom apartment.

A big part of the problem is that family-sized apartment/condo units are currently too rare in Canada (with the exception of Montreal's legacy plexes) to provide a viable, more affordable alternative to the SFH. And where they do exist, they tend to be catered towards the luxury market or are so scarce as to offer no real cost savings relative to a 3-bedroom SFH.

[WhipperSnapper]

The Trudeau government's heart belongs to Quebec. I'm not sure what they can do once Montreal approaches Toronto without severely disrupting the economy and destroying their party. I'm not sure what they could of done if Toronto was Montreal and vice versa. Harper had the best chance of preventing our current predicament.

[GreaterMontréal]

Originally Posted by ssiguy

The ONLY reason housing has become such a national issue is because it has started to effect Toronto and Toronto sets the national agenda for everything.

BC has had a housing crisis for 20 years and not a peep from Ottawa but when it started to really effect Toronto over the last 3 years then it becomes a national emergency.

If Toronto was the only affordable city in Canada and the rest of the country was completely unaffordable, we wouldn't be having this conversation.

Maybe in the ROC but here in Montréal, when the housing market started heating up last year, the media didn't started to talk about it because of what was going on in Toronto. There was no housing market problem in Quebec before covid aside for the low inventory in the rental market in Montréal.

It has always been known in Montréal that Toronto and Vancouver had high housing price, but that problem was not more talked about during the last 2 years.

https://www.journaldemontreal.com/2020/06/27/covid-19-ils-fuient-la-ville
https://ici.radio-canada.ca/nouvelle/1743954/montrealais-quittent-metropole-sondage
https://www.lapresse.ca/actualites/grand...record-de-montrealais-quittent-l-ile.php

[WhipperSnapper]

Originally Posted by Acajack

Immigration in Canada is still framed in virtuous "save the world" terms and our governments and many Canadians have generally been reluctant to ask the "but is it good for Canada and Canadians?" question with a cold, hard analysis in mind.

I couldn't have said it better. We could probably do more for the world eliminating hunger and homelessness on the forefront than using immigration to save the world while homelessness and hunger persists here.

I'm not a melting pot guy. I'm not enamoured by the fruitcake either. We are taking in people that have ingrained hatred for each other and expecting that to diffuse while maintaining cultural identity. We are also taking in people that are trying to get from the nonsense at home only to find the nonsense at home has migrated here too.

[WarrenC12]

Originally Posted by casper

We should also look at this through a historical lens. When by parents purchased a house in Vancouver in 1974 they were buying a house that was a 20 minute drive out of downtown in a Canadian city of around 1M. That was affordable for a middle class couple starting out.

Fast forward to day. Most Canadian cities of around 1 M are still relatively affordable. I am thinking of places like Calgary, Edmonton, Ottawa. Toss in some of the cities that are 300,000 to 1M and it is the same. Victoria, Saskatoon, Winnipeg are still relatively affordable. Getting a small 3bedroom bungalow in any of these cities is still in reach of many.

Vancouver has changed it is not a city of 1M. It is a city of 2.5M with a very dense core. Expectations are significantly different and it is closer to what should be expected in a larger city globally. I have a friend who is an engineer in Paris and her husband is a fire fighter. They raise their two kids in a small thee bedroom apartment in a three story walkup. It is a nice place but compact. That is the norm in many large cities in that 2M+ size range.

This sums up my point much better than I could. Those kids like you (not you, but you get my point), think they should be able to get that home your parents bought in 1974 for the same middle class income today. It's impossible.

Your point about moving somewhere a similar size is perfect. People see that as "moving down", but it's just repeating what the previous generation did 50 years ago.

[GreaterMontréal]

Originally Posted by WhipperSnapper

The Trudeau government's heart belongs to Quebec. I'm not sure what they can do once Montreal approaches Toronto without severely disrupting the economy and destroying their party. I'm not sure what they could of done if Toronto was Montreal and vice versa. Harper had the best chance of preventing our current predicament.

Quebec built 68,000 housing units in 2021, including 35,000 rentals. One of the best years in history for housing construction in the province, in fact, the best year since 1987. With the population growth I don't think we will build enough housing to have a balanced market.

[GreaterMontréal]

It is a nice place but compact. That is the norm in many large cities in that 2M+ size range

It is the norm in old countries like those in Europe of in Asia, but for new countries like Canada, the USA and Australia, SFHs are the norm.

[thebasketballgeek]

Originally Posted by WhipperSnapper

I couldn't have said it better. We could probably do more for the world eliminating hunger and homelessness on the forefront than using immigration to save the world while homelessness and hunger persists here.

I’m not sure that’s true. The majority of immigrants that come to Canada immediately experience a higher quality of life because there’s a much better social net. Yes they might struggle more but the children that they raise in Canada fare far better off and effortlessly jump up income classes. All my relatives that have immigrated to Canada are firmly upper middle class or upper class. Look at any established neighborhood in Canada that has a high visible minority population and they generally have a higher median income then the rest of the city.

For example in Winnipeg the Amber Trails neighborhood has a household median income of $100k while the rest of the city is at $70k. Yet visible minorities make up 70% of the population in the area. The numbers are also similar in Bridgwater with 60% being visible minorities yet median income is also $100k.

This holds true in other Canadian cities. Markham and Brampton residents are generally wealthier then the average GTA resident, same thing with Richmond and North Van. How can we say that this is not a net benefit for the country as well as for the people themselves who immigrate here?

[esquire]

^ In fairness any new suburban area is going to have a higher than average income for the simple reason that there's nowhere for poor people to live and bring the average down. The poor immigrants and refugees are in inner city neighbourhoods like West End or North End Winnipeg.

[Nouvellecosse]

Originally Posted by Acajack

Immigration in Canada is still framed in virtuous "save the world" terms and our governments and many Canadians have generally been reluctant to ask the "but is it good for Canada and Canadians?" question with a cold, hard analysis in mind.

I haven't personally noticed that myself other than with refugees which are a small proportion of total immigrants. I do hear both pro and anti immigration stances, but the most common "pro" stances I hear are along the lines of a) "diversity is our strength" ie, having a greater variety of ideas and perspectives makes us more dynamic and gives up a competitive edge, or b) immigrants are necessary to combat the aging population and stagnation due to low birth rates. When I talk to people locally, the question of places like Japan and parts of Europe come up, and the prevailing sentiment is that while they may be doing ok now, they're in for a demographic rude awakening in the coming decades while we're smart enough to use our embrace of diversity to offset this. I honestly don't recall ever hearing arguments for accepting non-refugee immigrants on the basis of helping them rather than us.

One concern I have with this thread is the narrative that wages are notably lower due to immigration which has little to no basis in evidence. It's just an intuitive sounding "truism" that is often repeated uncritically.

https://thetyee.ca/Analysis/2021/10/19/Immigration-Doesnt-Reduce-Wages/
https://fullfact.org/immigration/immigration-wages/

Rather than just fixating on who benefits from immigration, one must also consider who benefits from the use of immigrants as scapegoats. The business interests that have continually lobbied governments to push for neoliberal policies that have exasperated inequality certainly comes to mind. Perhaps the biggest correlation to wage stagnation is the drop in union rates and the overseas outsourcing of jobs.


http://www.huffingtonpost.com/2013/09/18/union-membership-middle-class-income_n_3948543.html

I've actually always found it a little amusing how the "desperate immigrants willing to work for peanuts" are so often the people blamed for taking everybody's money. Like... if you wanna know who's taking all the money, look for the people with the most money, not the least.