Canada's 'housing bubble' deemed close to bursting

[LightingGuy]

Originally Posted by swimmer_spe

Right here:


100% implies the whole part of the blame goes to it.

I am actually speechless...

I take it back, THIS is the stupidest thing I've seen you post.

This record seems to be getting broken daily though.

[swimmer_spe]

Originally Posted by LightingGuy

I am actually speechless...

Four words is not speechless.

[LightingGuy]

.

[Wigs]

LightingGuy, let the market decide.

Pay $460,000 for a 660 sq ft basement condo in Welland
https://www.realtor.ca/real-estate/25611283/781-clare-avenue-unit-211-welland

[swimmer_spe]

Originally Posted by LightingGuy

We'll add "reading comprehension" to the list as well.

https://www.google.ca/search?q=speechles...IBCTAuNy41LjUtMZgBAKABAQ&sclient=gws-wiz

Dictionary
Definitions from Oxford Languages · Learn more
speech·less
adjective
adjective: speechless

unable to speak, especially as the temporary result of shock or some strong emotion.
"he was speechless with rage"
h
Similar:
lost for words

at a loss for words

unable to be expressed in words.

You used 4 things called words. Had you been speechless as you posted, you would have used no words.

[LightingGuy]

Originally Posted by Wigs

LightingGuy, let the market decide.

Pay $460,000 for a 660 sq ft basement condo in Welland
https://www.realtor.ca/real-estate/25611283/781-clare-avenue-unit-211-welland

You showing me an expensive listing from a region in the country that doesn't allow a free market for housing proves me right, so not sure what you're getting at here.

The only places in Canada that don't have a housing crisis are the ones that:
- Don't have rent control
- Don't have greenbelts
- Don't have expensive permit fees
- Don't have long permit review processes

[casper]

Originally Posted by LightingGuy

To the lefties: You do understand that rent control is one of the primary causes of the rental undersupply in Ontario, right? (not the only one, but it is a massive contributor)

If people know that their rent can't go up, they're incentivized to stay put, which reduces supply on the market at any given time, and ironically pushes prices up further for everyone who is looking at that time, and themselves when they reach a point where they actually do have to move.

Furthermore, if landlords know that they can't increase rent to the market rate, they will be less incentivized to construct purpose-built rentals in the first place. Lio can chime in here, but if it was me and I know I'll be operating at a loss for the first few years, the last thing I want is a tenant who intends to stay for 10 years if I can't increase their rent to market rates every year. So I'd rather not build it in the first place.

People think they're doing tenants a favour with rent control, however it's hurting them. And it's not really benefitting landlords either, because if their costs go up, eg. during high inflation periods, they can't increase their prices. The only time they can do that is if a tenant moves out. Rent control benefits no one. In comparison, Alberta has no rent increase control and has incredibly stable YoY rent compared to Ontario, historically speaking. Rent in Edmonton for a 2 bedroom unit in 2014 was ~$1200. Today it's ~$1450. Can't say the same thing about any city in Ontario.

That said, Doug Ford's method of removing rent control from anything built after 2018 isn't how would've done it. You only get the benefits of no rent control if it is removed uniformly across the entire province at once. And because of the severe undersupply (caused by decades of rent control), it likely would've led to a massive rent increase for millions of people at once. I don't know what the most sustainable way would be. Maybe allow 5% increases for a few years and give massive tax breaks to anyone who builds purpose built rentals? Something like that.

The BC model is a unit can go on the market for whatever the market will support. Once a tenant signs a lease any bump for that tenant is subject to rent control. The allows landlords to recoup the costs of new construction while at the same time providing some assurance for the tenant they will not unreasonably be pushed out.

Does Ontario not do the same? A brand new unit is going to command a premium in the market.

[Innsertnamehere]

Originally Posted by casper

The BC model is a unit can go on the market for whatever the market will support. Once a tenant signs a lease any bump for that tenant is subject to rent control. The allows landlords to recoup the costs of new construction while at the same time providing some assurance for the tenant they will not unreasonably be pushed out.

Does Ontario not do the same? A brand new unit is going to command a premium in the market.

That was the case before 1992 and from 2017 to 2018. All units built before 2018 remain under that rule - rents can rise to market rents between tenants, but a tenant cannot have above-inflation rent increases.

For units built after 2018, there are no restrictions and landlords can set rents at whatever they want. If they want a tenant out, they can just set the rent way above market for them and force them to move with impunity. No rules.

[WarrenC12]

Originally Posted by casper

The BC model is a unit can go on the market for whatever the market will support. Once a tenant signs a lease any bump for that tenant is subject to rent control. The allows landlords to recoup the costs of new construction while at the same time providing some assurance for the tenant they will not unreasonably be pushed out.

BC's rent control was ideal when it was inflation +2% limit. Now they have artificially clamped down and it's below inflation (way below really).

This benefits existing renters to the detriment of everybody else.

[LightingGuy]

Originally Posted by casper

The BC model is a unit can go on the market for whatever the market will support. Once a tenant signs a lease any bump for that tenant is subject to rent control. The allows landlords to recoup the costs of new construction while at the same time providing some assurance for the tenant they will not unreasonably be pushed out.

Does Ontario not do the same? A brand new unit is going to command a premium in the market.

Essentially, yes it's the same in Ontario, and it's a problem here, as it is in BC.

Let me ask you a series of questions.

Q1. Imagine you're a tenant who is thinking about moving. Maybe you need a bit more space, or you want to be closer to work, but your current place is still okay for the time being. Let's also assume you've been in the same place for a few years and market rent in your area is 50% more than what you're currently paying. What decision are you likely to make in this situation?

A1: The answer is you're probably going to put up with your existing place for a little bit longer than you would otherwise until the lack of space or commute becomes a bigger problem for you, since you'd rather pay less for a little bit longer.

-----------------------

Q2. What happens to the status of your unit when you live in it for longer than you would've otherwise?

A2: It never goes on the market. Until you finally have to move.

-----------------------

Q3: What happens when millions of people make the exact same decision reason for the exact same reason?

A3: Millions of units go on the market less frequently.

-----------------------

Q4: What happens millions of listings go on the market less frequently?

A4: The number of available listings at any given time is always lower.

-----------------------

Q5: What happens when the number of available listings is lower while the population is growing?

A5: It puts upwards price pressure on the limited listings that are available at that given time.

-----------------------

This is the effect that rent control has in Ontario and BC.

It is important for people to realize that the market price for rent is dependent entirely on the available listings at that given time. You could have millions of rental units in existence, but that is irrelevant. The only thing that matters is if it's currently on the market. If there are fewer listings on the market, there will be permanent upwards price pressure.

Rent price control is causing the problem that it's trying to solve.

[theman23]

Originally Posted by swimmer_spe

Right here:


100% implies the whole part of the blame goes to it.



What happens when the largest part of your population no longer works, but you still need that same number of workers? What happens when the provinces and municipalities do not want to see this? You get a government enacting policy that is good for the country's economic engine, but is incompatible with the local politics. We should have had a housing boom to cushion us going into the biggest group of retirement that we have know of since the 1960s. Baby Boomers, the largest generation is 1946-1964.
1946+65= 2011
1964+65= 2029

Hey wait, 2016, that is after the start of when a whole bunch of people who were of retirement age stopped working. Those jobs were still needed to be filled, so the federal government, who are in charge of immigration saw that and raise the amount of people immigrating to fill those positions.

Now, if the provinces and municipalities saw the same thing, since 2011 there should be record development and that record development should not have slowed down... oh, wait, what happened in 2020-2022? Supply chain issues, lack of enough workers, and of course the multiple shut downs of work multiple times all made those 2-3 years a lost time for housing construction. And then add on the fact that many people decided they wanted out of large cities.

Obviously, COVID affected things but the demand mismatch was worsening prior to 2020. The graphs have been posted here numerous times, some of them just a few pages ago.

The federal government does not work in a vacuum. If the downstream effect of their policy is to create a housing crisis, they should have worked with lower levels of governments to avert that. They did not. The analogy of force feeding a diabetic to keep the hospital kitchen in business is a decent one.

I mean, we elected a party that thought this guy should take a leading role in its housing policy:

• Video Link

It's clear they do not view this as a problem. Its part of their solution.

[swimmer_spe]

Originally Posted by theman23

Obviously, COVID affected things but the demand mismatch was worsening prior to 2020. The graphs have been posted here numerous times, some of them just a few pages ago.

The federal government does not work in a vacuum. If the downstream effect of their policy is to create a housing crisis, they should have worked with lower levels of governments to avert that. They did not. The analogy of force feeding a diabetic to keep the hospital kitchen in business is a decent one.

I mean, we elected a party that thought this guy should take a leading role in its housing policy:



And now the new guy is actively purchasing investment properties. It's clear they do not view this as a problem. Its part of their solution.

Take half of businesses in your area. Better still, take all businesses that have been looking for workers since 2020. Shut them down. Permanently. Do not re open. Then add about 5% per year for the next decade. That would be economic collapse. Imagine being the PM under that collapse. Oh, wait we had one. They nicknamed cars that were being dragged by horses because no one could afford gas after him. Bennett Buggies. Ever heard of that? So, you have someone trying to keep our economy from collapsing doing the things that they have the power to do. He has been doing this the whole time more and more people proportionally are retiring than entering the workforce. Meanwhile, provinces and municipalities are ignoring it. The provinces could force a cut in building permits. They could outlaw zoning. They could allow municipalities to tax vacant land at the developed rate. But instead, they don't. As much as I hate JT, and as much as I want him gone, when it comes to immigration, I understand why he is doing it. Housing is expensive because housing starts have not kept pace with the growth that was expected in the 1960s. That is not a federal thing.

[theman23]

Its already been pointed out to you numerous times that there is far less ability for governments to legislate their way to more supply. On the other hand, demand is almost solely driven by government policy - virtually exclusively federal policy.

If our national economy is such a house of cards that we need to have 1 million indentured workers arrive each year to keep it afloat , then that represents a failure of federal economic policy. The token green tech announcements aside, its fairly clear that this government is staking our economic future chiefly on population growth.

[swimmer_spe]

Originally Posted by theman23

Its already been pointed out to you numerous times that there is far less ability for governments to legislate their way to more supply. On the other hand, demand is almost solely driven by government policy - virtually exclusively federal policy.

If our national economy is such a house of cards that we need to have 1 million indentured workers arrive each year to keep it afloat , then that represents a failure of federal economic policy. The token green tech announcements aside, its fairly clear that this government is staking our economic future chiefly on population growth.

Economy and economic policy are 2 different things.

Economy is what allows you and I to have food on our table, clothes on our back and a roof over our head.

Economic policy is what billionaires use to put a new yacht in their marina, a new sports car in their massive garage and a vacation home where all the politicians go.

The economic policy since the 1980s, or Reaganomics as it is refereed to was bad and still is bad. Problem is, to suggest real changes would never get you elected. That economic policy requires growth to work. The minute it stagnates or deflation occurs is the minute economic collapse could happen. 2008 was just that. So, we either welcome the collapse with welcoming arms, or we keep rearranging tables on the sinking ship know as capitalism.

[theman23]

[swimmer_spe]

Originally Posted by theman23

Do,worry,I couldn't understand it till I started asking "why is things the way they are?" and then "Why did they become this way?" Once you start to learn the history of the way our economic policy was set up, you understand how precarious our country really is.

[GenWhy?]

Originally Posted by LightingGuy

To the lefties: You do understand that rent control is one of the primary causes of the rental undersupply in Ontario, right? (not the only one, but it is a massive contributor)

I'm sure British Columbia, specifically Vancouver and Burnaby, have similar or stricter rent controls than Ontario in general, and purpose-built rental construction is the highest it has ever been (in quantity) and has surpassed condo construction for the last 3 years in Vancouver proper.

I work in developing rental and come condo and the biggest factor is zoning - a lack of a free market.

[GenWhy?]

Originally Posted by LightingGuy

Rent price control is causing the problem that it's trying to solve.

Sounds like a supply issue where there is localized demand (places where people want to live and close to work).

[GenWhy?]

I'd like to add each building we get Occupancy there are over 1000 applicants to move in. People want to move, usually no matter the price, because there is so little available stock.

[whatnext]

Originally Posted by GenWhy?

I'm sure British Columbia, specifically Vancouver and Burnaby, have similar or stricter rent controls than Ontario in general, and purpose-built rental construction is the highest it has ever been (in quantity) and has surpassed condo construction for the last 3 years in Vancouver proper.

I work in developing rental and come condo and the biggest factor is zoning - a lack of a free market.

Sure. And as a developer tell us how likely your fellow developers are to reduce prices when they know the market has been paying ridiculous amounts for units? If they know they can get $1.2 million for a bland new condo that’s what they and you will charge. None of you are going to lower prices just because zoning is changed.