Canada's 'housing bubble' deemed close to bursting

[swimmer_spe]

Originally Posted by thebasketballgeek

Here's a good article that highlights what Edmonton is doing.

Edmonton's omnibus zoning bylaw would change entire city and limit development rules

I wonder what would happen if the other major cities and metros were to do this. I am certain some will say it will ruin the fabric of some neighbourhoods.I feel that if we are to house everyone, we need to increase density where we can.

[Wigs]

Originally Posted by Coldrsx

Canmore continues to be the outlier in Alberta due to housing costs and relatively low average wages.

---

2022's living wage data (ranked highest to lowest)

Canmore: $32.75;
Fort McMurray: $22.50;
Calgary: $22.40;
St. Albert: $22.40;
Cochrane: $22.35;
Rocky Mountain House: $21.85;
Edmonton: $21.40;
Drumheller: $21.20;
Spruce Grove: $20.70;
Stony Plain: $20.40;
Lethbridge: $20.30;
Drayton Valley: $19.65;
Grande Prairie: $19.65;
Red Deer: $19.65; and
Medicine Hat: $17.50.

https://calgary.ctvnews.ca/alberta-s-liv...ers-in-canmore-report-suggests-1.6152318

It just came out the other day that a living wage is $20/hr in Niagara.
Which I don't understand since sfh are still ~$660,000 and to rent a 1 bedroom apt it's ~60% higher than Edmonton or Winnipeg for example.
Maybe groceries are that much cheaper in southern Ontario

[rousseau]

Average cost of renting a two-bedroom in Toronto soars by 24% to more than $3,300

Toronto’s rental housing prices keep on soaring, driven by tight supply and would-be homeowners deciding not to buy because of rising interest rates.

According to a new analysis of data at a major listings site, the average price for a two-bedroom apartment or condo rental in Toronto rose 24 per cent to $3,353 in October from a year earlier. One-bedroom rentals also rose 24 per cent to $2,502. Toronto saw the fastest growth of any large market in Canada over the past year. In Vancouver, one bedroom rentals now go for $2,604 while two bedrooms fetch $3,648, increases of 15 and 19 per cent, respectively.

https://www.thestar.com/business/2022/11...-a-one-bedroom-in-toronto-hits-2502.html

My mortgage payment is $1,600 and I'll retire a millionaire when we eventually sell this place. I'm on the "winning" side, but I worry about how fugging unfair this is. I vividly remember the 1970s and 80s when social and economic mobility were etched in axiomatic stone. I could not imagine being twenty-five right now.

This is why I'm a centrist and can't go too far to the right, notwithstanding the culture war skirmishes I get involved in on SSP. As much as I like minimal government intervention in most things, I recognize the need for good regulation and policy in a fair society.

There simply has to be a way to reduce rents, at the very least. Renting should be cheaper than mortgage payments as a general rule. Something's wrong when that gets out of whack.

[LightingGuy]

Originally Posted by swimmer_spe

Make me wonder what is Windsor, Edmonton an Winnipeg doing that is lowering their rents.

In Edmonton's case the answer is nothing. They are letting the free market be a free market without getting in the way.

[LightingGuy]

Originally Posted by rousseau

There simply has to be a way to reduce rents, at the very least. Renting should be cheaper than mortgage payments as a general rule. Something's wrong when that gets out of whack.

Rents are higher than mortgages because people can't qualify for mortgages anymore. If you can't save you can't buy, but you still have to live somewhere which drives up the demand for rentals. $4000 is a lot, but it's likely being split between a few adults, and is still more within reach than a mortgage for them.

They can build more social housing, but the examples where this has been tried "en masse" as the dominant style of housing aren't exactly inspiring.

They can try giving people subsidies, but the market will quickly price that in as well.

They can put artificial caps on what landlords can charge, but this will very quickly lead to there being zero vacancies.

The only way through this is to increase supply. Building more homes will eventually lead to more affordable purchase prices, which will reduce the demand for rentals.

We're not going to start seeing the positive effects of MHBF for 4 years or so, but it's 100% the right call, and we need the discipline to stick to it.

[theman23]

Originally Posted by rousseau

My mortgage payment is $1,600 and I'll retire a millionaire when we eventually sell this place. I'm on the "winning" side, but I worry about how fugging unfair this is. I vividly remember the 1970s and 80s when social and economic mobility were etched in axiomatic stone. I could not imagine being twenty-five right now.

This is why I'm a centrist and can't go too far to the right, notwithstanding the culture war skirmishes I get involved in on SSP. As much as I like minimal government intervention in most things, I recognize the need for good regulation and policy in a fair society.

There simply has to be a way to reduce rents, at the very least. Renting should be cheaper than mortgage payments as a general rule. Something's wrong when that gets out of whack.

I’m not really sure why you see this as problem with Conservatism. We’ve had leftists governments in power for some time at all levels, and yet here we are. I’m not an expert, but perhaps our policies that support environmental protection, neighborhood conservation, rent control, low wage growth and cheap borrowing are part of the problem.

[whatnext]

Originally Posted by LightingGuy

In Edmonton's case the answer is nothing. They are letting the free market be a free market without getting in the way.

The problem with this particular YIMBY fetish is those rules went in for a reason. It was driven by the people not governments looking to bring in regulations. I guess we’ll see if people end up liking the Calcuttazation of Canada.

[theman23]

Originally Posted by whatnext

The problem with this particular YIMBY fetish is those rules went in for a reason. It was driven by the people not governments looking to bring in regulations. I guess we’ll see if people end up liking the Calcuttazation of Canada.

It’ll probably be another thousand years before Edmonton runs the risk of turning into anything like Calcutta.

[whatnext]

Originally Posted by theman23

It’ll probably be another thousand years before Edmonton runs the risk of turning into anything like Calcutta.

Vancouver's already well on the way. Indigent beggars at every street corner these days.

[LightingGuy]

Originally Posted by whatnext

The problem with this particular YIMBY fetish is those rules went in for a reason. It was driven by the people not governments looking to bring in regulations. I guess we’ll see if people end up liking the Calcuttazation of Canada.

It's not the same as not having rules. Edmonton has rules and zoning, but they don't take very long to review and approve permit applications. They also don't have a greenbelt, so a lot more of the development organically occurs around the periphery. The article which someone posted above about what they're doing to promote infill is interesting, and exactly how the goal of densification should be handled: less restriction, not more.

[swimmer_spe]

Originally Posted by LightingGuy

In Edmonton's case the answer is nothing. They are letting the free market be a free market without getting in the way.

I wonder what would happen if that was applied to the GTA.

Originally Posted by whatnext

The problem with this particular YIMBY fetish is those rules went in for a reason. It was driven by the people not governments looking to bring in regulations. I guess we’ll see if people end up liking the Calcuttazation of Canada.

Clearly, those rules have not worked for most areas that are still seeing record rent and real estate pricing.

[yaletown_fella]

Originally Posted by rousseau

My mortgage payment is $1,600 and I'll retire a millionaire when we eventually sell this place. I'm on the "winning" side, but I worry about how fugging unfair this is. I vividly remember the 1970s and 80s when social and economic mobility were etched in axiomatic stone. I could not imagine being twenty-five right now.

This is why I'm a centrist and can't go too far to the right, notwithstanding the culture war skirmishes I get involved in on SSP. As much as I like minimal government intervention in most things, I recognize the need for good regulation and policy in a fair society.

There simply has to be a way to reduce rents, at the very least. Renting should be cheaper than mortgage payments as a general rule. Something's wrong when that gets out of whack.

Totally agree. It's absurd that populists like Jagmeet Singh and even many so-called conservatives will paint homeowners in giant suburban McMansions as the innocent "little guy" while big REITS and purpose rental developers as being inherently evil. Our backwards counterproductive taxation , incentives, and monetary policy are already proof that the majority of uninformed voters buy into this narrative.

It brings to mind a great Churchill quote : "The best argument against democracy is a five-minute conversation with the average voter"

This — distorted environement is only possible because of government intervention and central planning in the economy, that upward mobility is stifled and savers are being punished to reward gamblers and the well connected.

Our society has no problem shaming someone for not being able to land a high paying job, but no one expects someone who takes out a low interest mortgage and overleverages themselves in hopes of making a quick buck, to take any kind of personal responsibility. According to your average voter, the taxpayer and printing press of the BOC should be there to bail these fools out.

At this point, Im considering settling to buy a bachelor condo the periphery of the City of Toronto to protect myself from rising rents. The worst case scenario would be having a condo paid off and qualifying for welfare if — were to hit the fan and my job were to somehow get automated (which I highly doubt will happen within the next decade, it's not feasible for the company)

The alternative is to continue renting, but $15,000 a year in interest/dividends from my investments wouldnt be enough to cover rents if I were to lose my job. At the rate rent is inflation, the rent for a bachelor in Toronto will be $3000 a month in 10 years : (. It seems like I'd have to be a sucker to continue renting.

I just dont think I trust the BOC to keep doing the right thing and hold or continue on the path to raise rates above inflation.

[WarrenC12]

Originally Posted by whatnext

Vancouver's already well on the way. Indigent beggars at every street corner these days.

Because Vancouver doesn't build enough housing.

[MolsonExport]

Good luck trying to scrape together a down payment for a house in Toronto when you are paying $3,300 rent per month. That is insane.

My mortgage is $2400/month, and I find this a difficult cross to bear. And I had some equity going into this house (which was my second house).

The costs of servicing higher interest rates, even for homes that have declined in value by 20%, have pushed even more people out of the market than did the escalating housing prices. Everything is — at the same time. Inflation, wage stagnation, interest rates jacked up...

[ssiguy]

Originally Posted by WarrenC12

Because Vancouver doesn't build enough housing.

The issue in Vancouver is not that they are building enough housing but rather not building the right type of housing. Vancouver's ridiculous land-use policies which zone 80% of the city as SFH is why Vancouver city looks like glass tower downtown surrounded by suburbia. Vancouver has no "missing middle" housing and allows widescale speculation by both foreigners and domestics outbidding the average person.

You can build 100,000 homes but if their starting price in nearly $1 million, you haven't created any housing for 90% of the population.

[WarrenC12]

Originally Posted by ssiguy

The issue in Vancouver is not that they are building enough housing but rather not building the right type of housing. Vancouver's ridiculous land-use policies which zone 80% of the city as SFH is why Vancouver city looks like glass tower downtown surrounded by suburbia. Vancouver has no "missing middle" housing and allows widescale speculation by both foreigners and domestics outbidding the average person.

You can build 100,000 homes but if their starting price in nearly $1 million, you haven't created any housing for 90% of the population.

I agree we need more dense housing, but the near zero vacancy rate would indicate that any housing will help.

[ssiguy]

yaletown_fella........................I agree with everything you said except for the BoC continuing to raise rates.

While our inflation rate is slightly lower than the US and the implications of rising rates will be far more devastating to Canadian families as opposed to American ones due to having household debt levels 40% higher than US ones and our economy being more reliant on housing, the BoC will have no choice but to continue to hike rates.

Even if the BoC wants to stop the hikes due to political pressure and the impacts on our economy, they can't until the FED does the same and there is no indication that they will stop the hikes anytime soon. Even a hint of plateauing the rates will send the $CDN plunging against the strong Greenback. This will cause imports from the US {where we get most of ours from} to soar restocking inflation.

The Pound, Euro, Yen, and $AUS have plunged much more in value than the Loonie because they have not kept their interest rates at or above the US levels and the BoC doesn't want the same thing happening here.

[MolsonExport]

"— what's best for Canadian families, what about the poor corporations?"

[lio45]

I for one am okay with continued Justinflation of values. In not-that-bubbly markets (such as most of Quebec), the rise in interest rates hasn’t even pushed prices down. They’re higher than ever, and rents as well are at an absolute all-time peak (and still climbing!)

The icing on the cake would be to let 500k+ new people arrive into our urban centers each year.

[yaletown_fella]

Why should rates be kept below inflation? How is thwt fair on savers?

Why should savers be expected to subsidize people with high levels of household debt? Unlike getting a high paying job, going into credit card debt is a 100% a personal choice. When Im making 50k per year I accept that buying brand name clothes, UBER Eats, dining out, driving a car or international vacations is not in the cards for me.

Not everyone can do high level algreba or become a software engineer, but anyone whos not disabled and in the workforce should be able to do basic arithmatic/budgeting