Canada's 'housing bubble' deemed close to bursting

[swimmer_spe]

Originally Posted by Loco101

I belong to PSAC.
It's an interesting time when my union is asking for salary increases that are below the inflation rate and my employer (government) is turning it down and offering much less. Our collective agreement expired last year so I have a feeling that the more this gets stalled, the higher the increase we will get as more inflation data comes in. My employer would have been wise to have just accepted what PSAC had asked for last year!

I hope you get it. Then I'll get it. My income increased are based off of the PSAC agreements.

I'm expecting to see a lot of unions either striking or getting very high increases.

[MolsonExport]

Originally Posted by Wigs

Please let some air out of the bubble...







Once again, this is Welland, Ontario, usually considered the least desirable city in Niagara.

when i see these shots of fugly homes in Welland, i wonder why my home isn't worth 3 million by comparison

[MolsonExport]

Originally Posted by swimmer_spe

I hope you get it. Then I'll get it. My income increased are based off of the PSAC agreements.

I'm expecting to see a lot of unions either striking or getting very high increases.

yep. The Ontario government expects us to accept their shitty wage increase cap of 1.5%? Not a snowball's chance in hell. Our collective agreement (University of Western Ontario Faculty Association) expires June 30th.

I fucking hate the brinkmanship that happens EVERY FUCKING TIME our contract expires. So much bad faith bullshittery from Central Admin, bluffing, calling the bluff, cusp of striking, legal strike position, then, even past the 11th hour some settlement (usually robbing Peter to pay Paul: salaries may rise, but benefits and expense allowances tumble).

[Acajack]

Originally Posted by Truenorth00

I didn't say nobody is doing this. Just that there's no broad statistical support of a trend of people leaving large cities. All their CMA populations are still growing. And to whatever extent there is spillover it's mostly to satellite towns and cities in the region. There's a lot more people moving from Toronto to z London or Guelph than North Bay.

.

I used to think this too but lately I've been seeing evidence of the trend some people are talking about in my family.

My family roots are all in the Maritimes but from the late 1950s up to recently a lot of people spread out mostly in Quebec and Ontario, and also a few in Western Canada and some other countries too.

In the past year or so I've seen more moves back to the Maritimes than I'd seen in the past 20-30 years. (Actually over the past 20-30 years the number of moves back was almost zero. It was all outmigration.)

And we're talking about people going to really small localities, not Moncton or Halifax.

Stuff like a retired uncle who's lived in the Quebec-Windsor corridor his entire adult life moving back to his hometown he left in the 1960s.

Or a much younger cousin who's built a life and career in a major city in the same "corridor", has his wife and kids here and built a wide circle of friends, now doing multiple job interviews in his field in his home region, and shopping around for houses there and sprucing up his house for sale here.

These aren't the only cases in my family and entourage BTW.

I think stuff like this takes some time to show up in broader statistics, but there is definitely something going on.

[lio45]

Originally Posted by MolsonExport

when i see these shots of fugly homes in Welland, i wonder why my home isn't worth 3 million by comparison

To answer your earlier "how on Earth can "ordinary Canadians" afford this?!?" question, it's fairly simple: anyone who floated up with the market can easily continue to play in it.

A middle class Canadian who owned property already can sell it (at an outrageous price) and then have the finances required to buy another ALSO at an outrageous price, while the math "works", even though it's still all completely uncoupled from local incomes and cost of living.

[lio45]

Originally Posted by Acajack

Stuff like a retired uncle who's lived in the Quebec-Windsor corridor his entire adult life moving back to his hometown he left in the 1960s.

I have one uncle who did exactly this. Pretty sure it's not rare.

The property values in my mom's hometown (on Baie des Chaleurs across NB) have been boosted a bit by returning Boomer retirees lately. I'm sure it's the same phenomenon nearly everywhere.

Spending summers in your childhood hometown in the Gaspé while spending winters on the coast of FL and this lifestyle being much more affordable than the cookie-cutter SFH you just sold in the Corridor, makes total sense for someone who's now retired.

[jamincan]

The latest episode of the podcast 99 Percent Invisible is about the missing middle of housing in Toronto. It's an interesting history of exclusionary zoning in Toronto and satisfies that oh-so-Canadian urge to hear Americans talking about us.

https://99percentinvisible.org/episode/the-missing-middle/

[travis3000]

Originally Posted by lio45

To answer your earlier "how on Earth can "ordinary Canadians" afford this?!?" question, it's fairly simple: anyone who floated up with the market can easily continue to play in it.

A middle class Canadian who owned property already can sell it (at an outrageous price) and then have the finances required to buy another ALSO at an outrageous price, while the math "works", even though it's still all completely uncoupled from local incomes and cost of living.

Bingo. 68% of all Canadians own property. When you're in the market already its easy to afford these outrageous prices. If you've sat on the sidelines or just became of age to buy a home and are watching the show then I agree prices are way out of reach.

[goodgrowth]

Originally Posted by Acajack

I used to think this too but lately I've been seeing evidence of the trend some people are talking about in my family.

My family roots are all in the Maritimes but from the late 1950s up to recently a lot of people spread out mostly in Quebec and Ontario, and also a few in Western Canada and some other countries too.

In the past year or so I've seen more moves back to the Maritimes than I'd seen in the past 20-30 years. (Actually over the past 20-30 years the number of moves back was almost zero. It was all outmigration.)

And we're talking about people going to really small localities, not Moncton or Halifax.

Stuff like a retired uncle who's lived in the Quebec-Windsor corridor his entire adult life moving back to his hometown he left in the 1960s.

Or a much younger cousin who's built a life and career in a major city in the same "corridor", has his wife and kids here and built a wide circle of friends, now doing multiple job interviews in his field in his home region, and shopping around for houses there and sprucing up his house for sale here.

These aren't the only cases in my family and entourage BTW.

I think stuff like this takes some time to show up in broader statistics, but there is definitely something going on.

If mean if you're a homeowner in Ontario wanting to maximize your "cashout"...you sorta have to go out of province now and rural Maritimes is probably the most obvious choice.

[Innsertnamehere]

Originally Posted by someone123

We are probably in a stagflation period though where incomes for a lot of people are not keeping up. If your income grows at 2%, your mortgage is 4%, and inflation is 7%, you will have less capacity to pay off your mortgage in 5 years, not more. Your interest rate exceeds income growth and on top of that a lot of other stuff will take up more and more of your budget.

I wonder how long people will keep up the claims that living standards are improving for broad demographics in Canada. I think living standards have gone down a lot in the past couple years and there doesn't seem to be a quick recovery on the horizon.

I'm a big booster of saying quality of life has been increasing generally over the last several decades which everyone seems to disagree with - but the statistics are not lining up for that to be true for the last 2 years post-covid. Average income increases are below inflation and housing costs have far outpaced inflation.

I believe we are seeing a reset on housing costs right now which will revert it to the mean a bit, and wages will return to increasing in a few years as productivity gains continue and inflation moderates, but right now we are paying for all the lost productivity which occurred through COVID from all the government shutdowns. So yea - quality of life has decreased from 2019.

At the same time, there have been many other efficiency gains from COVID that will permeate in the long term and will likely lead to longer term income and quality of life increases. Things like remote work and ZOOM meetings were rare in 2019 but will be here to stay over the longer term and are huge productivity enhancers for quality of life.

What is happening right now is the government printed an absurd amount of money and it's now working it's way into the economy and is screwing with it in multiple ways. Once that money is spent and the economy returns to normal in a year or two, things will level off and people's incomes will start increasing in real terms again.

[lio45]

Originally Posted by travis3000

Bingo. 68% of all Canadians own property. When you're in the market already its easy to afford these outrageous prices. If you've sat on the sidelines or just became of age to buy a home and are watching the show then I agree prices are way out of reach.

Exactly. It totally sucks for whoever "missed the boat" on this, I understand that.

I resoundingly missed the boat on bitcoin, my buddy wanted to convince me to invest a spare $50k into bitcoin back when it was like $300.

I of course never bought bitcoin after that. Only a sucker (IMO) would get in at the current prices. I missed the boat on that one opportunity, that's all. Just have to content myself with finding other ones...

Any Late Millenial or Gen Z who can't afford a million-dollar Welland SFH will just have to resort to some Plan B. That's life.

[Acajack]

Originally Posted by goodgrowth

If mean if you're a homeowner in Ontario wanting to maximize your "cashout"...you sorta have to go out of province now and rural Maritimes is probably the most obvious choice.

True for some.

Cousins of mine who are planning the move or considering it aren't making big cashouts though, as they still have mortgages that they're fairly early into. They will make some money by moving to the small town Maritimes, but they'll still likely have a mortgage and of course will be working many more years given their age.

[Wigs]

Originally Posted by MolsonExport

when i see these shots of fugly homes in Welland, i wonder why my home isn't worth 3 million by comparison

Riiiight? Molson, I bet you have a nice home on a large lot compared to this garbage. I'd take a quality built 1950s bungalow or 1970s side or backsplit any day over this schlock

You should see how pathetic the interiors are, especially the narrow houses
"Oooh look a "modern" design"

The entry opens up into an abyss of buyer's remorse, or at least would be to me
The first room "all in all we're just another Brick in a wall"
https://www.realtor.ca/real-estate/24365366/233-louise-st-welland

[Truenorth00]

The narrow house trend exists entirely because of our obsession with detached houses. A lot of this stuff would be better if they just built more townhouses or large quadplexes.

Also, it speaks to the privilege of those who have been lucky enough to own property for a decade or more to look down at these folks. "Ha! Look at those poors who can't afford a large lot with a bungalow." Said by many who would also say climate change is a concern......

[someone123]

Originally Posted by Truenorth00

The narrow house trend exists entirely because of our obsession with detached houses. A lot of this stuff would be better if they just built more townhouses or large quadplexes.

Was our detached house obsession ruining the country in 1920 when we had far fewer resources than today and higher population growth? There are older American cities with vast areas of detached housing that managed to stay affordable.

I think it would be good to allow for choice in housing. Some people will prefer to spend more for detached while others will be happiest in a townhouse or apartment. And the market can price in those differences if it's functional.

But our economy is doing badly in that we have a shortage of trades (huge emphasis on university as a pipeline to white collar work, immigration doesn't seem to supply the trades or perhaps immigrants just can't get credentials here easily enough), real wages are falling, and supply chains are messed up.

Then on top of this there isn't much real city building and creation of new areas that are as attractive as the old ones. Instead there are a lot of suburbs with poor quality infrastructure and heavy land use controls. We probably could have replicated a good part of today's housing cost crisis just by adding modern red tape to the books 100 years ago (no upzoning housing areas, no eliminating farmland, no eliminating wilderness... basically just don't think about building much anywhere, and if you do manage to it won't get first-class urban infrastructure for 30-50 years!). Because the new building is so bad way too many people want to pile in to a limited number of older urban areas.

[MolsonExport]

Originally Posted by Wigs

Riiiight? Molson, I bet you have a nice home on a large lot compared to this garbage. I'd take a quality built 1950s bungalow or 1970s side or backsplit any day over this schlock

You should see how pathetic the interiors are, especially the narrow houses
"Oooh look a "modern" design"

The entry opens up into an abyss of buyer's remorse, or at least would be to me
The first room "all in all we're just another Brick in a wall"
https://www.realtor.ca/real-estate/24365366/233-louise-st-welland

Not a house, but a tunnel. I have no problem with a tunnel-style house in Montreal or Brooklyn, but I fail to see the attraction of living in a tunnel-style house in Welland. Or London, Ontario for that matter. (one of the reasons why I stayed here was the extra large lot and big house that I was able to afford on a single income family salary)...those days are long gone, but I bought my current largish house (late 2013) when things were much cheaper (my first house [a side split], I purchased in 2006 for what today looks like a song). My lot is probably 6 times larger than that of the tunnel home depicted.

that house is extremely utilitarian.

[Wigs]

Originally Posted by Truenorth00

The narrow house trend exists entirely because of our obsession with detached houses. A lot of this stuff would be better if they just built more townhouses or large quadplexes.

Also, it speaks to the privilege of those who have been lucky enough to own property for a decade or more to look down at these folks. "Ha! Look at those poors who can't afford a large lot with a bungalow." Said by many who would also say climate change is a concern......

I see developer greed.

Come to Niagara, drive all over the region and then Welland and tell me these houses aren't extremely overpriced.

Niagara is also in the top 10 most expensive rental markets in the country


I agree they could build quality townhouses or tri/quad plexes, but they don't! I wish they built Chicago style 3 flats-1 unit per floor but they don't.

I now realize why some areas have design standards. These narrow houses are God awful, constructed so quickly they will look like absolute garbage in 20-25 years, probably a lot sooner

[Wigs]

Originally Posted by MolsonExport

Not a house, but a tunnel. I have no problem with a tunnel-style house in Montreal or Brooklyn, but I fail to see the attraction of living in a tunnel-style house in Welland. Or London, Ontario for that matter. (one of the reasons why I stayed here was the extra large lot and big house that I was able to afford on a single income family salary)...those days are long gone, but I bought my current largish house (late 2013) when things were much cheaper (my first house [a side split], I purchased in 2006 for what today looks like a song). My lot is probably 6 times larger than that of the tunnel home depicted.

that house is extremely utilitarian.

Molson, if these were quality brick "tunnel houses" or hell even the current look but in a walkable neighborhood I'd totally agree. But they're not.
Even Pittsburgh still knows how to build quality narrow infills.

This is utter garbage. The vinyl is already warping on some that were built a few years ago and the concrete stairs are crooked.
Many still don't have a proper driveway.

[someone123]

Originally Posted by Innsertnamehere

I'm a big booster of saying quality of life has been increasing generally over the last several decades which everyone seems to disagree with - but the statistics are not lining up for that to be true for the last 2 years post-covid. Average income increases are below inflation and housing costs have far outpaced inflation.

You have to ask: increasing for whom? If you are a property owner it has been great. If you are in the lower quintile or two I'm not sure people were better off in 2019 compared to 1999 or maybe even 1979. There's a portion of the lower middle class that got bumped downward.

People are not concerned about the average, they're concerned about those they care about who they see locked out of a middle class lifestyle. I see a lot of the younger people I know in that camp. They got zero out of the RE boom and their lives and careers were set back by covid policies (and they still got covid anyway). Many of them also feel like they have no agency; whether or not you do well around here, if you're younger, mostly comes down to whether or not your parents got a real estate windfall and want to share it with you.

Most of the statistics I see don't address the actual meat of the problem. For example a good survey would be to look at what the lifestyle is of the typical 28 year old in a given area in different decades (do you own, do you rent, do you have roommates, do you have kids, do you have a car, how long does your commute take).

[Truenorth00]

Originally Posted by someone123

Was our detached house obsession ruining the country in 1920 when we had far fewer resources than today and higher population growth? There are older American cities with vast areas of detached housing that managed to stay affordable.

You are ignoring context here. We had a very different mix of housing back then. And no cars, meant even SFD subdivisions there were built along tram lines with retail on main street. Reminder:

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