Housing Bubble II: The Quest To Build Enough Homes Where People Actually Need Them

[P'tit Renard]

Originally Posted by theman23

Interesting graph from Mike Moffatt:.

Another complementary graph from Mike Moffatt:



Housing affordability has been absolutely crushed under Trudeauism.

Just to reach the Harper Era peak of sub 300, we'd need to see substantial price declines paired with mortgage rate decreases.

[dreambrother808]

Originally Posted by P'tit Renard

Another complementary graph from Mike Moffatt:



Housing affordability has been absolutely crushed under Trudeauism.

Just to reach the Harper Era peak of sub 300, we'd need to see substantial price declines paired with mortgage rate decreases.

It was trending in the same direction under Harper, but yes, Trudeau amplified the problem. He still has no idea what it’s like to be an average Canadian these days. PP will win the next election, embarrass Canada internationally with what a childish right-wing troll he is, and do nothing to solve the fundamental problems. There’s not much to look forward to in Canada’s short#term future. For the first time in my life, I’m seriously considering emigrating.

[Build.It]

Originally Posted by dreambrother808

For the first time in my life, I’m seriously considering emigrating.

If I was 25 and single today, I would move to the US in a heartbeat.

[Mister F]

I could never move to a country with all the problems of the US but claiming EU citizenship that I'm entitled to through ancestry sounds pretty tempting sometimes.

[Truenorth00]

Originally Posted by Mister F

I could never move to a country with all the problems of the US but claiming EU citizenship that I'm entitled to through ancestry sounds pretty tempting sometimes.

And yet given the number of quality grads were professionals we lose to the US every year, I don't think your opinion is that universal.

I'd be a little careful about moving to the US as a parent. And I know fellow military who have refused postings to the US because of concern about their kids safety. But outside of that, I don't think moving to the states for a skilled professional is a challenging lifestyle. They aren't leading lower tier lives struggling for healthcare, rent or student loan repayments. Taking a Waterloo Engineering education (with the low cost) to the US (with better pay and higher standard of living) is arguably life winning arbitrage.

Europe is where you move to after you've banked some money in the US and/or have a family.

[Mister F]

Originally Posted by Truenorth00

And yet given the number of quality grads were professionals we lose to the US every year, I don't think your opinion is that universal.

That's nice. I didn't claim that it was.

Originally Posted by Truenorth00

I'd be a little careful about moving to the US as a parent. And I know fellow military who have refused postings to the US because of concern about their kids safety. But outside of that, I don't think moving to the states for a skilled professional is a challenging lifestyle. They aren't leading lower tier lives struggling for healthcare, rent or student loan repayments. Taking a Waterloo Engineering education (with the low cost) to the US (with better pay and higher standard of living) is arguably life winning arbitrage.

Europe is where you move to after you've banked some money in the US and/or have a family.

There's plenty of opportunity to make money in Europe. And lots of reasons apart from money why it could be considered a more desirable destination than the US.

[Nite]

Originally Posted by Mister F

That's nice. I didn't claim that it was.


There's plenty of opportunity to make money in Europe. And lots of reasons apart from money why it could be considered a more desirable destination than the US.

I am curious where in Europe you think you have a better shot of making money as a foreigner than in Canada. pretty much all the large European economies are doing shit with either massive defects to eek out 0.2% gdp growth (France, Italy, etc..) or the Germain route of lower deficits but 2 years of ongoing recession. Spain seems to be the only large European country with sustainable growth right now, but despite having 8 million more people than Canada, is still much smaller than Canada's economy.

You have Eastern Europe who despite implementing natalist policies in many of their countries are seeing demographic collapse increasing (Poland, Hungary, etc..) while using massive deficit spending to grow their economies (Hungary).

Their are a few smaller countries doing well, but unlike an open and more meritorious North America, climbing the socioeconomic ladder is much harder or impossible for a foreigner as you wouldn't have access to many ways to make a lot of money.

There is the UK i guess which is part of the anglosphere, but they are reeling from 14 years of conservative austerity rule, Brexit and most recently race riots.

[whatnext]

Originally Posted by Nite

I am curious where in Europe you think you have a better shot of making money as a foreigner than in Canada. pretty much all the large European economies are doing shit with either massive defects to eek out 0.2% gdp growth (France, Italy, etc..) or the Germain route of lower deficits but 2 years of ongoing recession. Spain seems to be the only large European country with sustainable growth right now, but it's economic, despite having 8 million more people than Canada, is still much smaller than Canada's.

You have easter europe who despite implementing natalist policies are seeing demographic collapse increasing while using massive deficit spending to grow their economies.

Their are a few smaller countries doing well, but unlike an open and more meritorious North America, climbing the socioeconomic ladder is much harder or impossible for a foreigner as you wouldn't have access to many ways to make a lot of money.

There is the UK i guess which is part of the anglosphere, but they are reeling from 14 years of conservative austerity rule, Brexit and most recently race riots.

LOL Trudeau’s chief apologist chimes in. Having been in Germany at the beginning of the summer I can assure you their cities felt far more prosperous than ours. Cleaner and no junkies slumped over in doorways everywhere. There’s a reason we get virtually no European immigrants to Canada, why would you leave a far more prosperous feeling country.

[Nite]

Originally Posted by whatnext

LOL Trudeau’s chief apologist chimes in. Having been in Germany at the beginning of the summer I can assure you their cities felt far more prosperous than ours. Cleaner and no junkies slumped over in doorways everywhere. There’s a reason we get virtually no European immigrants to Canada, why would you leave a far more prosperous feeling country.

The US is much more prosperous than almost anywhere in Europe, and has among the worst drug and homelessness problem for a developed country, so i wouldn't say that the amount of visible homelessness has anything to do with how prosperous a country is. The Taliban recently destroyed the poppy fields which were primary source of heroin for Europe, the market is now being replaced by the more powerful synthetic stuff that has been in North America for a while now so we will see how the junkies situation plays out there in the coming years.

Here is a paper of the incoming synthetic opioid wave that is beginning to sweep across Europe
https://www.rand.org/content/dam/ran..._PEA3270-1.pdf

"Potent illegally manufactured synthetic opioids
have ravaged North America (Humphreys et al.,
2022) and are beginning to appear in Europe
(BBC News, 2023). Given the massive harms
associated with the opioid crisis in the US and Canada –
including a dramatic increase in the number of overdose
deaths (Friedman & Shover, 2023; Pardo et al., 2019) – it is
critical that European leaders understand the urgent challenges that synthetic opioids pose. In 2021, the death rate
attributed to opioid overdoses in Europe was 18.3 deaths
per 1 million residents, whereas in the US there were 324
deaths per 1 million residents (CDC, 2023; EMCDDA,
2023). That means the problem in Europe currently appears
far smaller; it also means that the problem in Europe could
get much worse.
Synthetic opioids are much less expensive to produce
than heroin, which is primarily why drug dealers started
mixing illegally manufactured fentanyl imported from
China into the US and Canadian heroin supply circa 2014
(Pardo et al., 2019).1
Traditionally, those supplying illegal
opioids to Europe continued to rely on heroin produced
from Afghan poppies. However, their incentives for
switching to synthetic opioids has grown since the Taliban
drastically curtailed Afghan heroin production (Greenfield,
2023; EMCDDA, 2024)."

The German economy is in its second year of recession with no end in sight as its manufacturing based is getting destroyed by competition.

Germany’s Economy Tips Back Toward Recession
Europe's largest economy unexpectedly contracted in the second quarter.
https://geopoliticalfutures.com/germ...ard-recession/



P.S. France is still one of the largest source of immigrants to Canada by the way.

[whatnext]

Originally Posted by Nite

France is still one of the largest source of immigrants to Canada by the way.

The Germain economy is in it's second year of recession with no end in sight as its manufacturing based is getting destroyed.

Germany’s Economy Tips Back Toward Recession
Europe's largest economy unexpectedly contracted in the second quarter.
https://geopoliticalfutures.com/germ...ard-recession/

If Germany in recession feels more prosperous than Canada then we’re the ones with the problem. As to immigration from France, how many of those are “European”…?

[Nite]

Originally Posted by whatnext

If Germany in recession feels more prosperous than Canada then we’re the ones with the problem. As to immigration from France, how many of those are “European”…?

You equating prosperous with visible signs of homelessness and junkies, but as the US shows that is not true. Many poor countries don't have as much signs of visible homelessness or junkies but are not nearly as prosperous as the US. For example go to Rwanda and you wouldn't see much visible homelessness or junkies either.

I am also going to assume you were not in the former eastern Germany where signs of decay are everywhere.

Originally Posted by whatnext

As to immigration from France, how many of those are “European”…?

Why does that matter??

[Mister F]

Originally Posted by Nite

I am curious where in Europe you think you have a better shot of making money as a foreigner than in Canada.

I didn't say this at all.

[Coldrsx]

https://www.linkedin.com/company/cai...Sjk78lyw%3D%3D

[whatnext]

Yet more signs of how the federal government’s irresponsible stoking of demand has helped pushed housing to the breaking point:

Real estate insolvencies in Canada set to surpass levels of global financial crisis
RACHELLE YOUNGLAI REAL ESTATE REPORTER
PUBLISHED 33 MINUTES AGO
FOR SUBSCRIBERS

Residential property developers are facing rising insolvencies as they struggle with higher borrowing and construction costs – and industry experts warn the trend is likely to worsen as interest expenses remain elevated.

The number of insolvent real estate companies and projects has been rapidly climbing over the past year and is now on track to surpass levels of the global financial crisis, according to data from the federal Office of the Superintendent of Bankruptcy.

“This has been a long time coming,” said Colin Doran, head of development advisory for commercial real estate firm Altus Group, who has been providing advice on distressed real estate projects for 15 years.…

…At this pace, Canada is on track to reach about 240 real estate insolvencies this year, which would be 57-per-cent higher than 2023 and 13-per-cent higher than 2009, when a wide swath of businesses ran into problems owing to the financial crisis and global recession.…

….Some of the current problems in residential development can be traced back to 2017 when home prices were rising quickly in Toronto and demand exploded for new condos.

That year, there were nearly 31,000 preconstruction condo sales in the Toronto region, according to industry research firm Urbanation Inc. That was a record level and led to a surge in demand for construction workers and building materials – which started driving prices up.

The cost of construction rose 10 per cent from 2017 to 2018 in the Toronto region and 8 per cent across the country’s major cities, according to Statistics Canada’s residential building construction price index….

….Today, the cost of residential construction is 81-per-cent higher across Canada’s major cities compared to 2017 and more than double – up 107 per cent – in the Toronto region, according to Statscan data…..

https://www.theglobeandmail.com/busi...els-of-global/

[casper]

Originally Posted by whatnext

Yet more signs of how the federal government’s irresponsible stoking of demand has helped pushed housing to the breaking point:

Real estate insolvencies in Canada set to surpass levels of global financial crisis
RACHELLE YOUNGLAI REAL ESTATE REPORTER
PUBLISHED 33 MINUTES AGO
FOR SUBSCRIBERS

Residential property developers are facing rising insolvencies as they struggle with higher borrowing and construction costs – and industry experts warn the trend is likely to worsen as interest expenses remain elevated.

The number of insolvent real estate companies and projects has been rapidly climbing over the past year and is now on track to surpass levels of the global financial crisis, according to data from the federal Office of the Superintendent of Bankruptcy.

“This has been a long time coming,” said Colin Doran, head of development advisory for commercial real estate firm Altus Group, who has been providing advice on distressed real estate projects for 15 years.…

…At this pace, Canada is on track to reach about 240 real estate insolvencies this year, which would be 57-per-cent higher than 2023 and 13-per-cent higher than 2009, when a wide swath of businesses ran into problems owing to the financial crisis and global recession.…

….Some of the current problems in residential development can be traced back to 2017 when home prices were rising quickly in Toronto and demand exploded for new condos.

That year, there were nearly 31,000 preconstruction condo sales in the Toronto region, according to industry research firm Urbanation Inc. That was a record level and led to a surge in demand for construction workers and building materials – which started driving prices up.

The cost of construction rose 10 per cent from 2017 to 2018 in the Toronto region and 8 per cent across the country’s major cities, according to Statistics Canada’s residential building construction price index….

….Today, the cost of residential construction is 81-per-cent higher across Canada’s major cities compared to 2017 and more than double – up 107 per cent – in the Toronto region, according to Statscan data…..

https://www.theglobeandmail.com/busi...els-of-global/

Let me get this straight the federal government "creating demand" for housing is causing property developers to become insolvent?

I don't think it works that way.

Cost of construction may well have doubled since 2017 as the article states. However the solutions to that is to do things to reduce the cost raw material (lumber, steel, etc.) and reduce the cost of labour by bringing more people into the country.

I think the real problem is developers tried to make a quick buck and over build on units for airbnb and investors. Basically 300-500 sq ft units that people don't want to buy to live in. Perhaps developers need to start building units that people actually want.

Sounds like as many of these units come to market we are going to have glut of small units that people don't want while we have a housing shortage at the same time.

[Truenorth00]

Originally Posted by casper

Let me get this straight the federal government "creating demand" for housing is causing property developers to become insolvent?

I don't think it works that way.

Cost of construction may well have doubled since 2017 as the article states. However the solutions to that is to do things to reduce the cost raw material (lumber, steel, etc.) and reduce the cost of labour by bringing more people into the country.

I think the real problem is developers tried to make a quick buck and over build on units for airbnb and investors. Basically 300-500 sq ft units that people don't want to buy to live in. Perhaps developers need to start building units that people actually want.

Sounds like as many of these units come to market we are going to have glut of small units that people don't want while we have a housing shortage at the same time.

I don't think you understand how it works.

1) Commodity prices are global. So no, there's not many ways to reduce the price of steel, timber, etc

2) The industry needs skilled labour to lower wage pressure. The government brought in lots of Uber drivers instead. That doesn't reduce construction sector wage pressure. But it does increase overall housing demand.

3) The government basically encouraged real estate speculation for years. The industry oriented around it. Units and buildings were constructed to sell to investors. Business models developed around selling to investors. Now that this is all falling apart with higher rates, developers are struggling. The government owns this, as much as the development sector.

[YOWetal]

Originally Posted by casper

Let me get this straight the federal government "creating demand" for housing is causing property developers to become insolvent?

I don't think it works that way.

Cost of construction may well have doubled since 2017 as the article states. However the solutions to that is to do things to reduce the cost raw material (lumber, steel, etc.) and reduce the cost of labour by bringing more people into the country.

I think the real problem is developers tried to make a quick buck and over build on units for airbnb and investors. Basically 300-500 sq ft units that people don't want to buy to live in. Perhaps developers need to start building units that people actually want.

Sounds like as many of these units come to market we are going to have glut of small units that people don't want while we have a housing shortage at the same time.

Blaming the government for all or even most of the problem seems unfair. Yes we could have frozen immigration stalling our property market and economy in 2013 or so when this "problem" started but mostly things were going well until Covid which blew up everything everywhere. All the Anglo American countries who have the same attraction to immigrants and attitude to real estate investing saw the same thing.

Developoers are not trying to make a quick buck with 300 SQ FT unites they were making the only thing the market could support. The math on 2000 SQ FT family apartments just isn't there until ground based housing gets so expensive.

[Hecate]

Originally Posted by YOWetal

Blaming the government for all or even most of the problem seems unfair. Yes we could have frozen immigration stalling our property market and economy in 2013 or so when this "problem" started but mostly things were going well until Covid which blew up everything everywhere. All the Anglo American countries who have the same attraction to immigrants and attitude to real estate investing saw the same thing.

Developoers are not trying to make a quick buck with 300 SQ FT unites they were making the only thing the market could support. The math on 2000 SQ FT family apartments just isn't there until ground based housing gets so expensive.

What do you think a three bedroom two bathroom apartment with functional kitchen, dining and living space would cost… if a 400 square foot shoe box is selling for a million in Vancouver?

[whatnext]

Originally Posted by YOWetal

Blaming the government for all or even most of the problem seems unfair. Yes we could have frozen immigration stalling our property market and economy in 2013 or so when this "problem" started but mostly things were going well until Covid which blew up everything everywhere. All the Anglo American countries who have the same attraction to immigrants and attitude to real estate investing saw the same thing.

Developoers are not trying to make a quick buck with 300 SQ FT unites they were making the only thing the market could support. The math on 2000 SQ FT family apartments just isn't there until ground based housing gets so expensive.

We would not have stalled our economy in 2013. Trudeau wasn't even in power to wreak havoc then. However he was in 2017 when construction costs started going through the roof and his solution: bring in more warm bodies to stoke demand for a product the market was having a hard time delivering.

[GenWhy?]

Originally Posted by Hecate

What do you think a three bedroom two bathroom apartment with functional kitchen, dining and living space would cost… if a 400 square foot shoe box is selling for a million in Vancouver?

Pre-sale, likely less than $600k in Burnaby / Coquitlam near the train line. numbers I got about 2 weeks ago. Sub $1,300 / psf.

I mean you might get $2,500 / psf in downtown Vancouver, but that's very specific for a type of buyer and area. Even in Kitsilano that would barely top $1,700 back in 2019 - not too different in today's market.