Canada's 'housing bubble' deemed close to bursting

[hipster duck]

Originally Posted by niwell

Ok, so. Hypothetically, we open up all lands in urban areas and surrounding "protected" areas. Allow all yellow-belt builds. What's the demand? How long will it take to satiate? What part of the demand is people wanting to live and what is latent investment? Given current housing costs, to what extent will the mass of people owning real estate be willing to allow new builds to go for less? Hell, if given land for *free* what would it cost to build a new house given trades costs (which I am all too well aware of)?

I could see things going down slowly, but a complete free market solution isn't going to solve anything in the short term. Maybe it would if we did it 10 years ago but I think it's too late. Not saying we shouldn't allow a lot of this because it won't hurt but it's no silver bullet.

All of this.

With respect to the bolded part, here’s an anecdote. I suppose I live on the yellow belt. Neither my wife nor I are NIMBYs, and we have discussed the price a developer would have to offer for us to leave, and it’s about 30% more than what we think the asking price would be if we listed it. We saved up a lot of money to get this place and I’m starting to form roots in my neighbourhood. I don’t exactly want to start that all over again. If we weren’t mentally prepared to move, the developer needs to pay for us to move to a better home or a better neighbourhood.

An analogy I might make is that it would be like if you woke somebody up in a hotel room at 4am and asked them how much $ they want if they could switch rooms with you “right now”. I’d guarantee that it would be higher than what you could get when they were still checking in at the desk, if they entertain the idea at all.

[swimmer_spe]

Originally Posted by hipster duck

All of this.

With respect to the bolded part, here’s an anecdote. I suppose I live on the yellow belt. Neither my wife nor I are NIMBYs, and we have discussed the price a developer would have to offer for us to leave, and it’s about 30% more than what we think the asking price would be if we listed it. We saved up a lot of money to get this place and I’m starting to form roots in my neighbourhood. I don’t exactly want to start that all over again. If we weren’t mentally prepared to move, the developer needs to pay for us to move to a better home or a better neighbourhood.

An analogy I might make is that it would be like if you woke somebody up in a hotel room at 4am and asked them how much $ they want if they could switch rooms with you “right now”. I’d guarantee that it would be higher than what you could get when they were still checking in at the desk, if they entertain the idea at all.

You are no a NIMBY? How would you feel if that vacant land in your area was turned into a high rise?

[casper]

Originally Posted by swimmer_spe

There is no silver bullet solutions.

I would assume that if if building starts were double what they were pre covid every year for at least a decade, we might see demand plateau. You want it to be fixed faster? Freeze all immigration. That includes temporary workers. That may speed up the time it takes to plateau.

However that will increase inflation and reduce economic growth. Both will make it harder to do construction projects.

[hipster duck]

Originally Posted by swimmer_spe

You are no a NIMBY? How would you feel if that vacant land in your area was turned into a high rise?

I would be fine with it. I’m not sure what you’re getting at.

[niwell]

Originally Posted by hipster duck

All of this.

With respect to the bolded part, here’s an anecdote. I suppose I live on the yellow belt. Neither my wife nor I are NIMBYs, and we have discussed the price a developer would have to offer for us to leave, and it’s about 30% more than what we think the asking price would be if we listed it. We saved up a lot of money to get this place and I’m starting to form roots in my neighbourhood. I don’t exactly want to start that all over again. If we weren’t mentally prepared to move, the developer needs to pay for us to move to a better home or a better neighbourhood.

An analogy I might make is that it would be like if you woke somebody up in a hotel room at 4am and asked them how much $ they want if they could switch rooms with you “right now”. I’d guarantee that it would be higher than what you could get when they were still checking in at the desk, if they entertain the idea at all.

Exactly. We like to talk about this stuff in abstract terms but housing isn’t a security to be traded, people actually live in these places. My parents have a SFH near an LRT station in Calgary that’s worth far, far more than what they paid for it. But it’s their life - they are in the garden every day and extremely invested in the space. I’m sure there’s a price, but it’s not gonna be cheap.

We bought a place in Napanee which I suppose is an investment but we want to make it our second home and intend to own for the long term. Even with the relatively minimal work I’ve done already I wouldn’t want to sell for a lot more than it’s worth.

To this point I’ve noted before that it will be rentals that get redeveloped first, not SFHs. Taking a house with 3 rental apartments and converting it into 5 condos isn’t bad, but it’s not gonna be affordable.

[lio45]

Nothing “free market” is going to be affordable.

[lio45]

Originally Posted by hipster duck

All of this.

With respect to the bolded part, here’s an anecdote. I suppose I live on the yellow belt. Neither my wife nor I are NIMBYs, and we have discussed the price a developer would have to offer for us to leave, and it’s about 30% more than what we think the asking price would be if we listed it. We saved up a lot of money to get this place and I’m starting to form roots in my neighbourhood. I don’t exactly want to start that all over again. If we weren’t mentally prepared to move, the developer needs to pay for us to move to a better home or a better neighbourhood.

An analogy I might make is that it would be like if you woke somebody up in a hotel room at 4am and asked them how much $ they want if they could switch rooms with you “right now”. I’d guarantee that it would be higher than what you could get when they were still checking in at the desk, if they entertain the idea at all.

No need for analogies, it’s a pretty well known and very intuitive principle that when something isn’t for sale (your vehicle, the clothes you’re currently wearing, items you possess (officially “collectible” or not), etc etc etc) it’ll typically take a higher offer than actual value to convince the owner to part with it.

[lio45]

Originally Posted by niwell

Exactly. We like to talk about this stuff in abstract terms but housing isn’t a security to be traded, people actually live in these places. My parents have a SFH near an LRT station in Calgary that’s worth far, far more than what they paid for it. But it’s their life - they are in the garden every day and extremely invested in the space. I’m sure there’s a price, but it’s not gonna be cheap.

We bought a place in Napanee which I suppose is an investment but we want to make it our second home and intend to own for the long term. Even with the relatively minimal work I’ve done already I wouldn’t want to sell for a lot more than it’s worth.

To this point I’ve noted before that it will be rentals that get redeveloped first, not SFHs. Taking a house with 3 rental apartments and converting it into 5 condos isn’t bad, but it’s not gonna be affordable.

As discussed earlier, one possible way to make your parents move would be to start taxing the real estate wealth they’re unproductively sitting on.

And ALSO as discussed earlier, as long as people like your parents are a representative sample of the people who decide who wins elections in this country, that definitely ain’t happening.

[goodgrowth]

Originally Posted by lio45

Nothing “free market” is going to be affordable.

I mean...things can be more affordable. All you have to do is look at different housing markets and see there are differences.

I also think there needs to be some flexibility on what's allowed. There need to be more housing types that are more modest.

Some of the problem is though is that people don't want modest housing near them because they don't want the people who would live in modest housing near them.

If a trailer park was proposed to be built near some some middle-upper class suburb you think they would be like "howdy neighbors" lol. No they'd would have probably been marching to development hearing with their "community input".

[swimmer_spe]

Originally Posted by hipster duck

I would be fine with it. I’m not sure what you’re getting at.

You talk to the average person and they would be against it. We almost need laws that prevent NIMBYism.

[cabotp]

Originally Posted by swimmer_spe

As I listed, there are many reasons they got the name. Of the last 100 years, I feel they are the most selfless generation. Boomers, sadly, are the least. They really are the "ME" generation.

The "me" thing is just a by product of them having a much larger cohort in their generation compared to others over the past 50 years or so.

Put simply, when you have the numbers you will rule the roost.

The millennials by their sheer numbers will end up being the next "me" generation.

[swimmer_spe]

Originally Posted by cabotp

The "me" thing is just a by product of them having a much larger cohort in their generation compared to others over the past 50 years or so.

Put simply, when you have the numbers you will rule the roost.

The millennials by their sheer numbers will end up being the next "me" generation.

When a generation loses over 100,000 people to a cause, they learn how to be more selfless.

Excusing bad behaviour is not a solution to it.

[cabotp]

Originally Posted by casper

There is a call for the Bank of Canada to leave some breadcrumbs on what it plans to do. That would be a good idea.

Good to see the realization that they are moving to fast and need to pause to assess the impact of their previous rate increases. We do need smaller slower moves.

https://www.bnnbloomberg.ca/boc-could-leave-breadcrumbs-to-pause-rate-hikes-desjardins-1.1790920

The problem is if they move too slow then the pain could be far worse for far longer.

Once inflation gets ingrained into the psyche of the human population it will be very difficult to remove it. Without some serious financial pain.

[cabotp]

Originally Posted by swimmer_spe

When a generation loses over 100,000 people to a cause, they learn how to be more selfless.

Excusing bad behaviour is not a solution to it.

100,000 to what cause?

[swimmer_spe]

Originally Posted by cabotp

100,000 to what cause?

The 2 world wars.

[Nashe]

Originally Posted by swimmer_spe

The 2 world wars.

50k US boomers died in Vietnam. Most didn't even wanna be there.

[jigglysquishy]

Originally Posted by Vorkuta

50k US boomers died in Vietnam. Most didn't even wanna be there.

You know we're not American, right?

[casper]

Originally Posted by jigglysquishy

You know we're not American, right?

One of the wars we stayed out of.

One does not need to look beyond current events in Ukraine to see what can happen to a smaller count to a super power when it becomes totalitarian. Thankfully the US military and judiciary showed a great deal of discipline and rational behaviour to ensure the same did not happen in North America.

[Al Ski]

Originally Posted by goodgrowth

I mean...things can be more affordable. All you have to do is look at different housing markets and see there are differences.

I also think there needs to be some flexibility on what's allowed. There need to be more housing types that are more modest.

Some of the problem is though is that people don't want modest housing near them because they don't want the people who would live in modest housing near them.

If a trailer park was proposed to be built near some some middle-upper class suburb you think they would be like "howdy neighbors" lol. No they'd would have probably been marching to development hearing with their "community input".

The ONLY reason the housing market has gotten so out of control is because of the low low interest rates and excessive QE that has been pumped into the economy post 2008/9.

The very perpetrators of the last criminal act were left with their wealth intact and they said "Hey, let's buy distressed assets!" - the very assets they themselves distressed!

This is replicating. We never learn.

[Al Ski]

If you have no legacy money then you have virtually no hope of ever owning a home in any major market in Canada.

Free Market Capitalism is awesome!

This upcoming crash is going to make all others look like .. meh.. those lucky bastards