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

[urbandreamer]

My point about the Family Compact is Mr Micallef is wrong to blame them/WASPs for his problems with Toronto. The FC was an Anglican religious group; today the only power Anglicans have is telling the homeless when to leave a tent city. The people who really control Toronto today are cheapskate developers, Bay Street lobbyists, realtors, contractors, house flippers and inefficient government bureaucrats.

[lio45]

Originally Posted by Build.It

The typical story is that they arrive here when they are young, with no money, proceed to work their asses off, save as much as humanly possible and are very smart about investing.

That sort of discipline will make anyone wealthy, Punjabi or not

[Build.It]

Ignoring the click bait title, this guy explains how Canada has the equivalent of subprime mortgages offered by private lenders, aka Mortgage Investment Corporations. He also goes on to show how the government is continuing to bail out banks by buying their mortgage bonds (which consists of the worst mortgages), to the tune of an estimated $30B starting this February.
https://m.youtube.com/watch?v=VUR67yyHbE0

[casper]

Originally Posted by Build.It

Ignoring the click bait title, this guy explains how Canada has the equivalent of subprime mortgages offered by private lenders, aka Mortgage Investment Corporations. He also goes on to show how the government is continuing to bail out banks by buying their mortgage bonds (which consists of the worst mortgages), to the tune of an estimated $30B starting this February.
https://m.youtube.com/watch?v=VUR67yyHbE0

Provincially regulated. Accounts for 1.7 % of mortgages. Yes, sub-prime thankfully it is a small part of the Canadian market. Would likely have been better if it these lenders did not exist in the first place. However they do exist and now they are a problem. Thankfully a small problem.

[suburbanite]

There's nothing inherently wrong with someone offering subprime mortgages. They fill a role in the market as long as the lenders have the risk appetite for higher default rates. The problem is when subprime mortgages are passed off as something else, or when they permeate through a larger institution that holds a critical role in the overall supply of liquidity.

It's pretty ridiculous to say that no one should ever be able to offer a loan above a certain spread or to borrowers of a certain risk rating. Those type of loans should just make up a very small portion of the overall exposure in the market.

[Truenorth00]

Originally Posted by Build.It

Ignoring the click bait title, this guy explains how Canada has the equivalent of subprime mortgages offered by private lenders, aka Mortgage Investment Corporations. He also goes on to show how the government is continuing to bail out banks by buying their mortgage bonds (which consists of the worst mortgages), to the tune of an estimated $30B starting this February.
https://m.youtube.com/watch?v=VUR67yyHbE0

I'd be careful with him. He's been crying that the sky is falling for a very long time. And for the most part it hasn't. The big mistake made by that type of analysis is comparing Canada today to USA 2008. This ignores major trends like population growth. Or how our securitization works. There were markets in the US that built a decade's with of supply before they crashed. Which market in Canada has even months worth of surplus? Also, labeling every single buyer with mortgage insurance as sub-prime is quite a stretch. Instead of looking at USA 2008, the more appropriate comparison is probably Canada in the early 90s. But that kind of comparison won't get him the clicks.

[Truenorth00]

Originally Posted by someone123

If you flipped it around and talked about some group that lived on another continent for hundreds of years and had an uncertain future due to rising costs and poor economic opportunity there would be a lot of sympathy (for some to be sympathetic you'd have to make the group non-white, so let's add that to the thought experiment, but I would argue it shouldn't matter from a non-racist perspective), and the history does matter, although it's about cultural and familial or local ties and not about ancestry and genetics per se.

It does matter if somebody has trouble succeeding where they were born and that's different from a state offering opportunity or aid for non citizens. And in practical terms major improvements to world living standards will happen due to development abroad rather than people moving en masse to new countries. I think Canada has lost the plot somewhat around these issues. Perhaps no less than a theoretical person who feels that ancestral ties to the Family Compact entitle them to wealth. I'd say urbandreamer's opinion there is unclear. His post could mean anything from "I expect to be rich and privileged due to my ancestry" to "I just want the basic stuff an average Canadian in 1980 had".

To be clear, I called him out because it's now a demonstrated pattern of reducing everything to racial stereotypes. Heck, he basically reduced the Russia-Ukraine war to a fraternal ethnic spat and said the Ukrainians should just roll over for their big brother. And now we get the idea that a social worker complaining about nepotism in the provincial public service is apparently bragging about how South Asians are taking over (all just because she happens to be South Asian). I wouldn't say this is the hick racism that you've suggested might be excusable. I'd say this is some bizarre worldview where he seems to believe that race is or should be destiny. And of course, a certain ruefulness at WASPs apparently losing their privilege (which I guess is closer to hick racism).

[Truenorth00]

Originally Posted by Build.It

It's not broken out per specific region of India, however statcan released this report which said that South Asian men earn 110% as much white men, and South Asian women earn 119% as much as white women. New arrivals (aka those who make almost nothing) are also included in this statistic, so for those that are established this number is almost certainly higher.
https://www150.statcan.gc.ca/n1/pub/.../00004-eng.htm

Punjabi is almost half of all South Asians in Canada. Driving around the periphery of Brampton, Mississauga and Caledon, you see tons of custom-built mansions owned by Punjabi-Canadians who own businesses in the area.

The typical story is that they arrive here when they are young, with no money, proceed to work their asses off, save as much as humanly possible and are very smart about investing. There is also a VERY high rate of business-ownership among Punjabi immigrants. They also tend to send their kids to study STEM degrees, instead of Arts/Literature/Psychology, so their kids do really well too.

This pattern is being noticed in the US as well, where Indian-Americans are the wealthiest ethnic group:
https://www.livemint.com/news/india/...748104413.html

Here is Patrick Bet-David's deep dive into this topic:
https://www.youtube.com/watch?v=-eMLAFV4cx8

Few points.

1) An income survey of 25-44 yr olds from a particular time period is not going to be very representative especially given how quickly that demographic is growing. What would that survey look like today after we've added a million South Asians since 2016?

2) Like I said earlier, you're also mistaking higher disposable income, from a few flashy families, for wealth. If we look at poverty statistics, for example, South Asians have similar poverty rates to whites.

https://www150.statcan.gc.ca/n1/dail...30823b-eng.htm

3) The US and Canadian Indian diasporas are very different. The American Indian diaspora is much more diverse than ours and (given American visa requirements) much more economically successful. And the divergence is probably growing. The US isn't taking in hoardes of South Asians to study business fundamentals at suburban strip malls.

4) Canada's South Asian community has historically been Punjabi dominated. But the current wave of immigrants is much more diverse. The difference between a Punjabi and Tamil person are about as much as the difference between a Swede and an Italian. But arrive Europe isn't one country, we don't tend to lump Swedes and Italians together.

5) Be careful with stereotypes. It can seem complimentary. But that model minority stuff is just as insidious.

[dleung]

Originally Posted by MonkeyRonin

Without trying to psychoanalyze too much or anything, feeling like an outsider probably has more to do with autism than it does with ethnicity. It's a pretty common experience, particularly for autistic people, to feel socially isolated and look for causes to place the blame on (often focusing on niche stuff like ancestry that no one else really cares about).

In reality, everyone else in Toronto is a minority too - there is no single dominant group (though old-stock WASPs are probably still the closest, at least in terms of holding a disproportionate amount of wealth & influence). It might not be for everyone - and it's not necessarily a terrible thing to prefer to seek out more similar company instead - but it's also not something that's hindering most other Torontonians from having a sense of community or belonging. Acting entitled based on some sense of superiority stemming from your ancestral pedigree probably does though.

This is the best thing about Toronto and why I still live here most of the time despite it's fairly uninspired setting. The ease of finding community here that transcends race, language or cliques can't be matched - even in New York, where one is often told to "find your people". "My" people are in Vancouver/LA, but I rather be friends with all kinds of people. One can be new here and fit right in in no time.

[urbandreamer]

The pulp mill in Terrace Bay - halfway between Winnipeg and Sudbury, it's isolated ha - has just shut down, laying off 400 people. I suspect real estate will be plenty cheap there this year, as in under $100k.

[Wigs]

Originally Posted by urbandreamer

The pulp mill in Terrace Bay - halfway between Winnipeg and Sudbury, it's isolated ha - has just shut down, laying off 400 people. I suspect real estate will be plenty cheap there this year, as in under $100k.

If one is okay with a declining if not dying town kind of isolated. It's a beautiful area in summer, winters can be really harsh.

Me and niwell have talked about how Kenora is a beautiful area in summer, vibrant with many cottagers from Winnipeg/Manitoba, but you wouldn't want to live there in winter. Completely different vibe/environment. Like a night and day change heheheh

Maybe Terrace Bay should pivot to encouraging an endless supply of retirees (from southern Ontario and to a lesser extent Manitoba) to move to the north shore of Lake Superior. Unlike say Elliott Lake, there's no toxicity and falling roofs of shopping malls to worry about

On climate change projection maps, Lake Superior is one of the best suited areas in North America, and I recall Duluth in particular was in one of the best locations on the continent.

[Build.It]

Originally Posted by Truenorth00

Few points.

1) An income survey of 25-44 yr olds from a particular time period is not going to be very representative especially given how quickly that demographic is growing. What would that survey look like today after we've added a million South Asians since 2016?

2) Like I said earlier, you're also mistaking higher disposable income, from a few flashy families, for wealth. If we look at poverty statistics, for example, South Asians have similar poverty rates to whites.

https://www150.statcan.gc.ca/n1/dail...30823b-eng.htm

3) The US and Canadian Indian diasporas are very different. The American Indian diaspora is much more diverse than ours and (given American visa requirements) much more economically successful. And the divergence is probably growing. The US isn't taking in hoardes of South Asians to study business fundamentals at suburban strip malls.

4) Canada's South Asian community has historically been Punjabi dominated. But the current wave of immigrants is much more diverse. The difference between a Punjabi and Tamil person are about as much as the difference between a Swede and an Italian. But arrive Europe isn't one country, we don't tend to lump Swedes and Italians together.

5) Be careful with stereotypes. It can seem complimentary. But that model minority stuff is just as insidious.

We're both right actually. There are many examples of it not working out - kids who never move out, unable to find a spouse, struggling to establish a career, etc. But on average Punjabi-Canadians do seem to end up being more successful than their WASP counterparts. A big part of this is a higher risk tolerance leading them to start businesses, make investments etc (this is true for a lot of immigrants though, not just Punjabi).

Also just noticed the study I referenced is for Canadian-born, and doesn't include those who are self-employed. I don't have a good stat to show you, but entrepreneurship rates are very high in the Punjabi community. A lot of the men own/operate fleets of trucks and limos, for example. Lots of manufacturing businesses in NW GTA as well. If this income were included that would also change the statistic as well (although this would hold true for all the ethnic groups listed of course). Curious what the actual numbers are.

There isn't a lot of data on this I can point you to, most of what I said was from personal observations. The limited stats I was able to find does seem to back my personal observations though.

EDIT:
I should add that Punjabi-Canadians are who I have the most personal experience with, hence my speaking about them specifically. Not saying the same is/isn't true for other South Asians, I just don't have as much personal experience with people from other parts of the Indian subcontinent.

[someone123]

Originally Posted by Build.It

We're both right actually. There are many examples of it not working out - kids who never move out, unable to find a spouse, struggling to establish a career, etc. But on average Punjabi-Canadians do seem to end up being more successful than their WASP counterparts. A big part of this is a higher risk tolerance leading them to start businesses, make investments etc (this is true for a lot of immigrants though, not just Punjabi).

Some of it is probably cultural but I wonder how much is an ongoing effect from the immigration selection process and high barrier to moving to Canada. I wouldn't be surprised if WASP Canadians who immigrate to the USA are an unusually successful group as well, and that some effect continues for multiple generations.

One thing to consider is how this effect stacks up against others like having married vs. single parents or having doctors for parents vs. unemployed.

[thewave46]

WASP is such a weird acronym for Canada.

Terrace Bay slogans:

"Because you screwed the pooch on retirement planning."
"Because Nipigon was 'too city' for you"
"Maybe climate change might be less horrible here"
"The housing bubble has to get here some day if the scheme continues - get in now!"
"Now paper-mill smell free!"
"Your social-assistance dollar gets maximum value here, 'cause employment sure isn't happening."
"Love driving? Enjoy your three hour ride to Thunder Bay (they have Persians)"

[Build.It]

Originally Posted by suburbanite

There's nothing inherently wrong with someone offering subprime mortgages. They fill a role in the market as long as the lenders have the risk appetite for higher default rates. The problem is when subprime mortgages are passed off as something else, or when they permeate through a larger institution that holds a critical role in the overall supply of liquidity.

It's pretty ridiculous to say that no one should ever be able to offer a loan above a certain spread or to borrowers of a certain risk rating. Those type of loans should just make up a very small portion of the overall exposure in the market.

Mostly in agreement, as long as these risky lenders don't get bailed out.

The government buying CMHC's Mortgage Backed Securities is a bigger concern though. If it works out they can make a good profit on it. However in a market where homes are down by as much as 30%, a lot of these loans are likely underwater (since these are loans where people put less than 20%, so a lot of people who bought in 2021-2022 have negative equity atm).

I'm curious how much of an effect CMHC's insurance has on bank lending and home prices though.

[someone123]

Originally Posted by thewave46

WASP is such a weird acronym for Canada.

I agree. The boundaries between groups are hazy and if you're talking about the P in WASP that broke down many generations ago. I find a lot of discussions on race these days in Canada feel very outdated or out of step with the reality around here. A very significant number of people have some kind of mixed background and don't neatly fit into any racial/ethnic/national bin.

For the purposes of my post you could insert one-eyed Samoan-Canadian lesbians if you want. If you sample two groups based on some characteristic that has relatively weak impact on performance with one having jumped through a major selection hoop like immigration and one not, the hoop jumping group is likely to be more successful than the other one.

[Build.It]

Originally Posted by someone123

I agree. The boundaries between groups are hazy and if you're talking about the P in WASP that broke down many generations ago. I find a lot of discussions on race these days in Canada feel very outdated or out of step with the reality around here. A very significant number of people have some kind of mixed background and don't neatly fit into any racial/ethnic/national bin.

For the purposes of my post you could insert one-eyed Samoan-Canadian lesbians if you want. If you sample two groups based on some characteristic that has relatively weak impact on performance with one having jumped through a major selection hoop like immigration and one not, the hoop jumping group is likely to be more successful than the other one.

WASP may have been the wrong term. White multi-gen Canadians is what I meant.

Of course anyone can do anything regardless of where you're from. However upbringing does matter, and does have an effect on overall trends. The biggest part is drive and determination, which is something most immigrants share (I would expect that these are somewhat genetic traits, some people are just predisposed to taking risks and others aren't. Not everyone has what it takes to move to a new country).

There is also the experience that 2nd generation kids have of growing up poor, and seeing their parents become wealthy through pure hard work, determination and discipline - that also has a great effect. By the time they graduate high school they largely have access to the same resources as multi-gen Canadians, but with a significantly higher capacity for hard work due to their upbringing and values passed to them from their parents.

I'm 2nd gen (1.5 gen really), and I hope to be able to be able to pass on the same values to my kids, but I am also far better off than my parents were at the same age when they moved here, so I'll have to figure out another way to teach them that.

[urbandreamer]

Even this term "white" used by mostly non-white Canadians is wrong! What does a Russian have in common with a Frenchman or Scots-Irish? In the case of my grandmother's family, WASP is probably the word North Americans would use; but it's a very specific term referring to Upper Class New Englanders of Puritan, Quaker or Episcopalian background. My father never considered himself a WASP, even using the term in a derogatory manner to put down the Harvard/Yale elite. He was simply an American, or more specifically, a Southerner.

I think about my ex, an Amish Mennonite 7th generation Canadian, who grew up within 30 miles of myself, a Scots-Irish/American English Canadian: our cultures have almost nothing in common. She liked to joke that her Punjabi Indian coworkers had more in common with her family than with myself: peasant agrarian stock who valued hard work and traditional family values vs my secular, urban, worldly unmotivated self.

Now speaking of nearby Schreiber, I was reading with some interest that the entire area was surveyed by one of my ancestors for the railroad company back in the 1870s. And now, after reading about Sir Collingwood Schreiber on Wikipedia, I realized I'm related to him too lol. How bizarre that one of my father's ancestors worked for one of my mother's ancestors! So maybe I ought to be a good old stock Canuck and move there?

[1overcosc]

Originally Posted by Build.It

It's not broken out per specific region of India, however statcan released this report which said that South Asian men earn 110% as much white men, and South Asian women earn 119% as much as white women. New arrivals (aka those who make almost nothing) are also included in this statistic, so for those that are established this number is almost certainly higher.
https://www150.statcan.gc.ca/n1/pub/.../00004-eng.htm

Punjabi is almost half of all South Asians in Canada. Driving around the periphery of Brampton, Mississauga and Caledon, you see tons of custom-built mansions owned by Punjabi-Canadians who own businesses in the area.

The typical story is that they arrive here when they are young, with no money, proceed to work their asses off, save as much as humanly possible and are very smart about investing. There is also a VERY high rate of business-ownership among Punjabi immigrants. They also tend to send their kids to study STEM degrees, instead of Arts/Literature/Psychology, so their kids do really well too.

This pattern is being noticed in the US as well, where Indian-Americans are the wealthiest ethnic group:
https://www.livemint.com/news/india/...748104413.html

Here is Patrick Bet-David's deep dive into this topic:
https://www.youtube.com/watch?v=-eMLAFV4cx8

Good for them and for us. This country needs more people who can make something for themselves without government patronage.

[casper]

Originally Posted by suburbanite

There's nothing inherently wrong with someone offering subprime mortgages. They fill a role in the market as long as the lenders have the risk appetite for higher default rates. The problem is when subprime mortgages are passed off as something else, or when they permeate through a larger institution that holds a critical role in the overall supply of liquidity.

It's pretty ridiculous to say that no one should ever be able to offer a loan above a certain spread or to borrowers of a certain risk rating. Those type of loans should just make up a very small portion of the overall exposure in the market.

While they are not quite pay day loan types.

They are loaning to a segment of the market that is high risk and charging a good premium for it. Usually the segment of the market that can least afford to pay high interest rates. Thankfully they are a very small part of the market in Canada. At under 2% they don't pose a significant risk to the overall economy.