Canada's 'housing bubble' deemed close to bursting

[whatnext]

Originally Posted by Innsertnamehere

why wouldn't they be? Please, elaborate on how you have better access to data than friggen Statistics Canada. They have literally teams of people measuring inflation.

And sure as heck don't give me some anecdote about how chicken has increased by more than 4% this year.

Also - it's important to remember that inflation is measured as an average of all Canadians - many experience higher inflation and many experience lower depending on consumer habits, income levels, etc. If you are a meat-eating renter hoping to enter the housing market in the next 12 months who drives 50,000km a year, yea, your inflation might be a bit higher than someone who only eats veggies, has owned their home for years, and walks to work. With inflation racking up higher this year, the acute ends of this spread are feeling it a lot more than normal. Doesn't mean the average is wrong.

See articles.

[ssiguy]

Originally Posted by whatnext

If you think those figures are accurate I guess....

No kidding. For the first time ever I am really losing confidence in StatsCan.

Real estate, gas, food and car prices have all soared in the last year. The only thing that hasn't is rentals but that is strictly due to many provinces not allowing rental increases during COVID. When those restrictions are lifted, renters are going to get walloped by huge rental increases as management companies try to make up for their loses.

What's more minimum wage rates have increased significantly and will continue to do so to keep up with inflation and soaring prices for basically everything. Also, other wage rates are going to begin to increase massively not only due to a shortage of labour but also as civil servants get their CoL increases which are soon to be 5%, non-government workers will demand the same and the cycle builds upon itself.

Most unions have been rather tepid about their demands from both governments, their agencies, and private business as they understand the huge financial and economic impacts of COVID. They know making demands for higher wages during this time would be met with massive negative feedback from the general public and especially those who lost their jobs. When COVID is {finally} over, their demands for much higher wages will be huge and with a shortage of labour, they will be in the driver's seat.

[Innsertnamehere]

Originally Posted by whatnext

See articles.

exactly the response I expected

Used cars are excluded as all used goods are. I'm sure StatsCan has good reason and they do account for new vehicle costs which have similarly increased in price.

As for someone calling bullshit on StatsCan's food price tracking.. some ancedotal evidence about butter prices is all they have to back it up lol. Statscan gets their food price data from major grocers who from my understanding send them data on the average price consumers actually pay for items on receipts - not advertised prices or specialist cheese prices from high end grocers.

[theman23]

That's wrong. New vehicle costs haven't increased in price the way used ones have. New vehicles are actually cheaper than used ones ATM.

[ssiguy]

I believe that StatsCan report their food prices from what the grocery's actually pay for them and not what the consumer does. In other words, they report the base price but that doesn't take into account rising wages grocer's have to pay their workers resulting in even higher prices which of course are passed off to the consumer.

This is akin to reporting real estate that if a house goes from $1 million to $1.1 million in a year but interest rates go from 1% to 5%. Statistically the home prices increased by 10% and that would be the number reported, however, those higher interest rates may increase the buyer's payments by 40%.

[theman23]

.

[rofina]

Originally Posted by whatnext

Here you go. First, the official rate isn't "half the USA's" second the methodology is questioned by reliable sources.

Why Canada’s inflation rate is likely much higher than reported
MATT LUNDY ECONOMICS REPORTER
PUBLISHED DECEMBER 16, 2021

Canada’s annual inflation rate hit 4.7 per cent in November, the highest increase since 1991. A prominent voice on Bay Street thinks the actual inflation rate is much higher.

After Wednesday’s inflation report, Derek Holt published a scathing critique of Statistics Canada, the agency that produces the numbers. Mr. Holt, the head of capital market economics at Bank of Nova Scotia, wrote that investors are getting “fake data on what’s really going on with Canadian inflation.”

The true rate? It’s likely around 6 per cent, Mr. Holt said – closing most of the gap with the U.S., where inflation jumped to a near 40-year high of 6.8 per cent.

His argument centres on a key omission in Canada’s report: used cars. Statscan doesn’t track prices for used vehicles, a major source of inflationary pressure over the COVID-19 pandemic.....

https://www.theglobeandmail.com/business...ate-is-likely-much-higher-than-reported/


Canada’s food inflation figures are wrong, critics say — mainly because just three grocers supply the data
Statistics Canada partners with just three chains to collect data on food inflation rates, and due to ‘corporate confidentiality,’ you can’t know who they are.
By Paul Webster Special to the Star
Sat., Oct. 23, 2021

Every week, Melanie Morrison gathers data on the prices charged by Canadian grocers for tens of thousands of products.

But these days, Morrison, who runs a company based in Saskatoon called BetterCart Analytics, is mostly interested in the price of just three of them: evaporated milk, peanut butter and plain old butter.

Based on the data she’s collected on these three products, Morrison is convinced that Statistics Canada’s efforts to track food price inflation data may require a big rethink.

Poor data collection on food prices means Canadians may be finding it much harder to put food on the table than the federal government is acknowledging, after all.

Take the federal agency’s own findings, Morrison said. In September 2019, Canadians paid an average of $2.82 for 500 grams of peanut butter, according to Statistics Canada.

In September 2020, that price had dropped to $2.69. And by September 2021, it was back at $2.82.

“I don’t see this in my data,” said Morrison. “We see a range from $3.39 to $5.59 in the current price. And at the highest, we see up to $9.99.”...

https://www.thestar.com/business/2021/10...use-the-big-grocers-supply-the-data.html

I find it so comforting, and at the same time so alarming, that the bogus inflation stats reported by StatsCan are finally being questioned with data to back it up.

This low inflation narrative has always seemed like such a joke to me.

[rofina]

Originally Posted by Innsertnamehere

exactly the response I expected

I recognize the winky face, but this is tricky to navigate.

Its turning into camps again.

The question fundamentally is; do you think the formulas and inputs for how inflation is calculated by stats can have any political (or otherwise) pressure on them to steer the outcome of the final number?

Used cars are excluded as all used goods are. I'm sure StatsCan has good reason and they do account for new vehicle costs which have similarly increased in price.

This is a good example of failure to capture reality in statistics.

The bulk of transactions is happening in the used car market, often, at above MSRP prices. The reasons is new cars are simply not available.

So this low inflation print in new cars sounds great on paper, but reality is Canadians are shelling out more than ever vehicles, that are also used.

As for someone calling bullshit on StatsCan's food price tracking.. some ancedotal evidence about butter prices is all they have to back it up lol. Statscan gets their food price data from major grocers who from my understanding send them data on the average price consumers actually pay for items on receipts - not advertised prices or specialist cheese prices from high end grocers.

Ill dig it up, but this isn't the first time, or the only firm that has began tracking its own basket of goods for food that is trending far above what StatsCan is reporting.

I think the very fact people are feeling the need to track these stats outside of StatsCan because of a loss of confidence between that StatsCan shows and their monthly bill is telling of the situation.

[casper]

Originally Posted by ssiguy

I believe that StatsCan report their food prices from what the grocery's actually pay for them and not what the consumer does. In other words, they report the base price but that doesn't take into account rising wages grocer's have to pay their workers resulting in even higher prices which of course are passed off to the consumer.

This is akin to reporting real estate that if a house goes from $1 million to $1.1 million in a year but interest rates go from 1% to 5%. Statistically the home prices increased by 10% and that would be the number reported, however, those higher interest rates may increase the buyer's payments by 40%.

I believe it is actually consumer prices. However we are talking about Loblaws, Sobeys and Metro. All three of them have been putting significant pressure on suppliers to limit increases. Smaller retailers don't have the same influence.

[casper]

This is an interesting community. It is basically a bed room community for the research lab in Chalk River as well as the military base. Housing prices went up over $80k. Average cost of a house is now over $300k.

https://northrenfrewtimes.ca/news/averag..._c9eX4wCkoFZ_gWn0obtzmkqJAfqzraNh5BVTJZo

[thebasketballgeek]

Ontario, Alberta and Manitoba lead the provinces in Canada's 'chronic' housing shortage, says Scotiabank
Ontario would need to build 650,000 more homes just to get to the national average
Bianca Bharti
Jan 13, 2022

Ontario leads the provinces in a “chronic” housing shortage across the country which, if left unaddressed, will lead to higher home and rental prices that will reduce affordability nationally, according to a report by Bank of Nova Scotia.

Canada’s most populous province, along with Alberta and Manitoba, fall well below the national average of housing stock per capita, Scotiabank chief economist Jean-François Perrault said in his report Wednesday. While comparing provinces to a national average will naturally find some fall short and some exceed the mean, the results aim to show how acute the undersupply is, he said.

“Ontario very much stands out in this respect. For Ontario to have the same level of homes per capita as the average in other provinces, over 650,000 additional housing units would be required,” Perrault wrote in the report .

Among the G7, Canada has the lowest average of housing supply per capita with 424 units per 1,000 people, which places the country right behind the United States and the United Kingdom. France, by comparison, leads the G7 at 540 units per 1,000. The pandemic, which allowed households to accrue record savings, along with extraordinary monetary and fiscal stimulus, stoked the country’s hot housing market and has pushed it into frothy territory over the past two years.




Though housing starts have exceeded their pre-pandemic run rate in 2021, housing prices have continued to surge, with the national average price of a home hitting an all-time high of $720,850 in November. Given the size of the structural housing gap, the pace of construction is unlikely to meaningfully close it and expectations of strong immigration will exacerbate the pressure on housing, Perrault said.

Alberta would need to build 138,000 more units and Manitoba, 23,000 more units, to meet the national average. It’s important to note that while Ontario, Alberta and Manitoba fall short nationally, that doesn’t mean housing stocks in other provinces are adequate.

Canada, overall, would need 1.8 million more dwellings to have the same number of homes per capita as the rest of the G7. The higher-than-normal housing supply in other provinces could also be a sign of shifting migration patterns, as people move to other areas of the country, boosting the number of houses in their province of origin. Newfoundland, for example, has had its population decline by 10 per cent since the mid-1990s while housing units have increased over that time.

There are encouraging signs, such as a push at federal and provincial levels to break ground on more housing. Both Ontario and British Columbia have implemented task forces to address the issue. In the last federal budget, Prime Minister Justin Trudeau’s government outlined $2.5 billion and a reallocation of $1.3 billion to speed up and support 35,000 affordable housing units.

“While these efforts are all welcome, what will matter most at the end of the day is actual progress in increasing supply in a responsible manner,” Perrault said. “History suggests that we have not been very good as a country in achieving this. Let’s hope current initiatives mark a solid break from past performance.”

https://financialpost.com/news/economy/o...chronic-housing-shortage-says-scotiabank

[Nite]

The Myth of 1.3 Million Vacant Investor Homes in Canada
• Video Link

[Denscity]

Vancouver with the highest rent in the country according to rentals.ca.

Average 1 bedroom:

Vancouver $2167

Toronto $2013

Victoria $1565

[goodgrowth]

Some interesting things from a draft report from Ontario's housing task force:

https://www.tvo.org/article/can-doug-for...-ontarios-housing-task-force-may-ask-for

While the draft and its contents might look different two weeks from now, the recommendations seen by TVO.org would, if implemented, mean some of the most radical changes to Ontario planning law since the 1970s and would undo some of the legacy of that era’s politics, which saw greater emphasis placed on local consultation and a stronger role for communities opposing everything from new highways to apartment-tower blocks.

Those local planning politics — and the provincial rules that empower those opposed to new homes — are in the task force’s crosshairs. The report recommends that municipalities with populations over 100,000 (that is, those home to the vast majority of the province’s people and jobs) would be required to allow up to four units and four storeys on any single residential lot, matching a recent call by the Toronto Region Board of Trade. Underused or vacant commercial spaces could also be converted to residential or mixed residential-commercial uses without requiring prior municipal approval.

The province could also set minimum zoning standards provincewide that would prevent cities from using everything from lot size to shade impacts to control development. And projects of 10 units or fewer could be exempted from site-plan approval (an additional process many cities currently use) if they otherwise conformed with a city’s zoning and official-plan policies. The report also recommends prohibiting municipalities from mandating public consultations for such projects if they need only what are called “minor variances," meaning they're mostly in compliance with a city’s rules but need small adjustments to be approved.

[JHikka]

Originally Posted by goodgrowth

Some interesting things from a draft report from Ontario's housing task force:

The report also recommends prohibiting municipalities from mandating public consultations for such projects if they need only what are called “minor variances," meaning they're mostly in compliance with a city’s rules but need small adjustments to be approved.

Great.

[Innsertnamehere]

That is unusual to occur already as it's not a required process under the planning act. Very, very occasionally a councillor will try to put on a meeting for a minor variance application but it's very unusual.

[rofina]

Originally Posted by goodgrowth

Some interesting things from a draft report from Ontario's housing task force:

https://www.tvo.org/article/can-doug-for...-ontarios-housing-task-force-may-ask-for

The fact this has to be a top down proposal is proof of the bureaucratic nightmare our civic leaders have created.

In the Vancouver forum it always amazes me how a few very well informed members trip over themselves to justify policies built on layers upon layers of badly implemented previous bylaws.

Just because its by-law or code or whatever doesn't mean something is well thought out and not in need of a challenge.

There seems to be a major disconnect between those who are in these fields and educated in them, and those are are saying; we understand you have depth of knowledge but the outcome you are producing doesn't work regardless of your level of knowledge.

Instead of acknowledging something broken, they prefer to explain the complicated reasons for why it is so.

Get rid of the red tape, that's the bottom line.

OR

If we are saying, and the NIMBYS in all our cities overwhelmingly are, that there is too many folks moving to Cities, well slow down immigration to replacement only.

But we dont want to have that conversation, do we?

[MonkeyRonin]

Originally Posted by Innsertnamehere

That is unusual to occur already as it's not a required process under the planning act. Very, very occasionally a councillor will try to put on a meeting for a minor variance application but it's very unusual.

Not sure how familiar you are with the process already, but all minor variances are heard through the Committee of Adjustment - which allows any and all neighbours to place objections to any proposal for a minor variance. Councillors rarely get involved in this; but even still, in the face sufficiently numerous, well organized neighbourhood opposition, the Committee can and does reject applications fairly often.

[MonkeyRonin]

Originally Posted by rofina

The fact this has to be a top down proposal is proof of the bureaucratic nightmare our civic leaders have created.

In the Vancouver forum it always amazes me how a few very well informed members trip over themselves to justify policies built on layers upon layers of badly implemented previous bylaws.

In Toronto, just to add to some further confusion to the outdated zoning by-laws, most of the city actually has two separate sets of (often conflicting) bylaws - the current city-wide bylaws, and the pre-amalgamation city-specific bylaws (ie. North York, Scarborough, etc. bylaws from before 1998).

So even if you satisfy the requirements of all of the current zoning bylaws, you may still need a variance to grant you exemptions from the 25+ year old bylaws that they just never bothered to supersede!

[Innsertnamehere]

Originally Posted by MonkeyRonin

Not sure how familiar you are with the process already, but all minor variances are heard through the Committee of Adjustment - which allows any and all neighbours to place objections to any proposal for a minor variance. Councillors rarely get involved in this; but even still, in the face sufficiently numerous, well organized neighbourhood opposition, the Committee can and does reject applications fairly often.

Ah yes of course they can depute at the actual hearing but there aren't typically specific public meetings for individual files like there are for zoning by-law amendments.

Removing the public's ability to depute at CoA hearings would likely be useful and just generally make those meetings operate a whole lot more smoothly.