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

[GenWhy?]

Originally Posted by whatnext

So true of almost everything Trudeau says...

I mean absolutely, he's the PM. "Retain" covers all the bases. Get prices back to 2019 pre-COVID when they were already high before the spink? Sure. Retain at cooled-off 2024 prices? Sure. Retain and increase with inflation? Sure. Retain at current price without inflation boosting per year? Sure.

It's a perfect nothing answer. Your answer to Housing don't come from a spokesperson. They come from the person in the trenches like a Housing Minister or Planner or other staffers crafting a policy document.

[P'tit Renard]

Originally Posted by GenWhy?

The PM didn't say we'd retain house prices at their peak, or even today's prices.

Originally Posted by GenWhy?

Well instead of interpreting or misquoting him I can just say what he said, which is "retain". It can mean almost anything, and isn't worth it to dissect.

Originally Posted by GenWhy?

I mean absolutely, he's the PM. "Retain" covers all the bases. Get prices back to 2019 pre-COVID when they were already high before the spink? Sure. Retain at cooled-off 2024 prices? Sure. Retain and increase with inflation? Sure. Retain at current price without inflation boosting per year? Sure.

So you're saying the G&M, Canada's most reliable paper of record who conducted the interview directly with Trudeau, misconstrued and misrepresented what Trudeau was trying to convey and express in their interview together?

[thewave46]

Originally Posted by GenWhy?

Isn't this the actual quote he said:

“Housing needs to retain its value… It’s a huge part of people’s potential for retirement and future nest egg”

This is actually the concerning bit regardless, and how we've warped our perception of what a house is. All the worse the PM didn't stick to the line of 'Making sure young Canadians are affordably housed', and said the quiet part loudly to the biggest newspaper in the country. Oops. Then one wonders why Team Red is polling the weakest in the 18-29 demographic - they're being sold up the river.

At one point, housing was considered shelter, with maybe the benefit of being able to recover some of the sunk cost of it, if the retirement plan didn't work out. It wasn't the retirement plan unto itself. It wasn't considered the nest egg. It was a nest.

When government views housing value as an objective of government unto itself, we go down the 'Stonks!' path of asset valuation above all. Fine, if we're trading Bitcoin or hockey cards and understand that the thing has no underlying intrinsic value. Play fuck-around with idiot ideas to one heart's content. Bitcoin/hockey cards go to zero or to the moon and nobody real suffers.

Make housing an asset class and bleed out the young insidiously? Make them pay absolutely dearly to survive, so that one can pad the retirement of the wealthiest generation of all human history? We bleed out the load-carriers of tomorrow. We shall pay for it dearly.

Let housing be shelter first.

[shreddog]

Originally Posted by thewave46

This is actually the concerning bit regardless, and how we've warped our perception of what a house is. All the worse the PM didn't stick to the line of 'Making sure young Canadians are affordably housed', and said the quiet part loudly to the biggest newspaper in the country. Oops. Then one wonders why Team Red is polling the weakest in the 18-29 demographic - they're being sold up the river.

At one point, housing was considered shelter, with maybe the benefit of being able to recover some of the sunk cost of it, if the retirement plan didn't work out. It wasn't the retirement plan unto itself. It wasn't considered the nest egg. It was a nest.

When government views housing value as an objective of government unto itself, we go down the 'Stonks!' path of asset valuation above all. Fine, if we're trading Bitcoin or hockey cards and understand that the thing has no underlying intrinsic value. Play fuck-around with idiot ideas to one heart's content. Bitcoin/hockey cards go to zero or to the moon and nobody real suffers.

Make housing an asset class and bleed out the young insidiously? Make them pay absolutely dearly to survive, so that one can pad the retirement of the wealthiest generation of all human history? We bleed out the load-carriers of tomorrow. We shall pay for it dearly.

Let housing be shelter first.

Couldn't have said it better.

It is sad that somehow JT and The Gang believe that housing is now primarily for retirement planning and a place a plce to live in. Also that for some reason people today need at least and extra 400K for their "golden" years than only 10 years ago (2015 vs 2024 average price). Yeah, I know inflation will get presented as the reason why, but I don't think we've been averaging 7+% for 10 years.

[Truenorth00]

One can say the quote is open to interpretation
But then you look at the LPC's policy actions the last few years and it certainly looks congruent with less charitable interpretations of that quote.

They are toast. Deservedly so. The only question now is whether the next government cares more about the young, or making sure the old have gold plated retirements.

[lio45]

Originally Posted by Truenorth00

One can say the quote is open to interpretation
But then you look at the LPC's policy actions the last few years and it certainly looks congruent with less charitable interpretations of that quote.

They are toast. Deservedly so. The only question now is whether the next government cares more about the young, or making sure the old have gold plated retirements.

The LPC is so brutal to the young, that the CPC can also throw them mostly under the bus, while still getting their votes as the “party that cares the most about the young (of the two)”.

So I wouldn’t expect too much from PP, my guess is he’ll be just slightly less all-in on the maximum generational inequity stuff than JT. Why have any other position? As long as you’re perceived as the youth-friendly option (relatively), you’ll get the votes.

[lio45]

Originally Posted by thewave46

This is actually the concerning bit regardless, and how we've warped our perception of what a house is. All the worse the PM didn't stick to the line of 'Making sure young Canadians are affordably housed', and said the quiet part loudly to the biggest newspaper in the country. Oops. Then one wonders why Team Red is polling the weakest in the 18-29 demographic - they're being sold up the river.

At one point, housing was considered shelter, with maybe the benefit of being able to recover some of the sunk cost of it, if the retirement plan didn't work out. It wasn't the retirement plan unto itself. It wasn't considered the nest egg. It was a nest.

When government views housing value as an objective of government unto itself, we go down the 'Stonks!' path of asset valuation above all. Fine, if we're trading Bitcoin or hockey cards and understand that the thing has no underlying intrinsic value. Play fuck-around with idiot ideas to one heart's content. Bitcoin/hockey cards go to zero or to the moon and nobody real suffers.

Make housing an asset class and bleed out the young insidiously? Make them pay absolutely dearly to survive, so that one can pad the retirement of the wealthiest generation of all human history? We bleed out the load-carriers of tomorrow. We shall pay for it dearly.

Let housing be shelter first.

In all fairness, JT didn’t make the rules that make Canadian real estate a particularly interesting asset class fiscally, but he’s had 10 years to update them and did not (plus, he introduced other policies to greatly boost real estate values).

The double speak is fascinating. As I recall saying years ago, imagine if you had, say, Musk saying, both “My job is to crater Tesla stock so it becomes affordable and the young can buy lots of it” AND “My job is to boost the value of Tesla stock so the people who currently hold some get richer and richer”.

[theman23]

I don’t think Tesla pays a dividend, so they’re wouldn’t be any disadvantage to a young person buying in now versus someone deciding to stay invested in it today. With real estate you might be looking at similar gains if you buy now, but its primary function is housing and you’re buying into a progressively less livable space as prices go up. Closet sized condos in our big cities now go for as much or several times more than a what SFH used to go for in recent times. Theres also the matter of borrowing costs, and you’re obvious taking on a more more risk buying a speculative asset with a $1 million loan (something even a 99th percentile income would need decades to pay off) versus a $200k loan (can probably be paid off early on a median income).

In other news, the City of Oakville decided they don’t want the housing accelerator money and will be returning it to the Feds. They’ll be sending back $1.2 million, which I think would be enough to buy a 2.5 BR condo these days. It seems Sean Fraser has come around to the realization that offering pocket change to cities doesn’t work, so has decided to resort to the stick of publicly shaming cities on Twitter.
https://www.inhalton.com/federal-gov...elerator-deal/

[thewave46]

Mostly, I am reminded of CEOs who focus on the stock price to the detriment of the long-term healthy operations of the company when I hear these tidbits.

To hell with the stock price, if the company’s falling apart. The stock’s going to follow once the jig of pumping the price up fails.

If we were producing increasing GDP per capita and housing is pricey, at least we’re building a better tomorrow. We’re not, though. GDP per capita is falling. Housing prices cratered in the early 1990s because the underlying problems in the economy made it a shit investment. By the mid-1990s, housing was probably more viewed as shelter first, because the hilarious swan dive since the late ‘80s sure made it a bad investment. If we rot out the base of Canada, housing will follow. It might take awhile, but it will happen.

Want to have housing ‘retain value’ over the long-term? Make Canada tangibly wealthier. Fix our larger economic problems today. We sure didn’t until it became a crisis last time.

Or even better: View housing as shelter and consumption for regular owners. If I even come close to breaking even after purchase price, interest, property tax, and upkeep, great. If not? Wasn’t counting on it, even if the value craters. (Yes, I’ve lived in places that have seen that happen.)

[bolognium]

It's frustrating how we're prioritizing boomers' retirement "plans" while giving younger Canadians far fewer options to plan for retirement. Can't get on the housing ladder. Can't save money for retirement because rents are skyrocketing.

*I say "plans" because I doubt many of these people planned for the astronomic appreciation of that asset. More luck than good planning.

Used to be that a retirement plan was paying off your mortgage to have cheap shelter in your later years, and using your savings/pension to live. Now a large % of older people have no savings, but a $1.5M dollar home they're stuck in. Only option is to squeak by in their valuable home, or forced to downsize and move to a tiny town far away.

A valuable home only works as a retirement nest egg if there are options for selling and downsizing. How do you realize the value of your home, if when you sell it you have no reasonable options for shelter in your area?

[lio45]

Originally Posted by bolognium

It's frustrating how we're prioritizing boomers' retirement "plans" while giving younger Canadians far fewer options to plan for retirement. Can't get on the housing ladder. Can't save money for retirement because rents are skyrocketing.

*I say "plans" because I doubt many of these people planned for the astronomic appreciation of that asset. More luck than good planning.

Used to be that a retirement plan was paying off your mortgage to have cheap shelter in your later years, and using your savings/pension to live. Now a large % of older people have no savings, but a $1.5M dollar home they're stuck in. Only option is to squeak by in their valuable home, or forced to downsize and move to a tiny town far away.

A valuable home only works as a retirement nest egg if there are options for selling and downsizing. How do you realize the value of your home, if when you sell it you have no reasonable options for shelter in your area?

You take HELOCs on it, and burn that money to live. Then when you die your kids inherit a house in which there’s still substantial equity, just not fully “free and clear”.

The Toronto Life Guy had like $1M in mortgage(s), when he sold for $2.5M. (Numbers from memory; thewave46 recently relinked to that (in)famous piece)

[niwell]

Originally Posted by thewave46

Or even better: View housing as shelter and consumption for regular owners. If I even come close to breaking even after purchase price, interest, property tax, and upkeep, great. If not? Wasn’t counting on it, even if the value craters. (Yes, I’ve lived in places that have seen that happen.)

Indeed. Unlike most tradeable securities a house is still a tangible thing. Even better, something that provides you with one of the basic human needs of shelter. This was our basic goal with getting into the housing market - couldn't afford something in Toronto but if it comes to it we can ditch our apartment here and at least have somewhere to live that we can easily afford. I have zero desire to flip it for a quick buck.

The big problem with the JT quote is that it's unfortunately accurate. Far too much money is tied up in the housing scheme that if it did crater Canada would be in a rather dire economic situation. We've managed to put ourselves in an untenable corner due to a combination of securitization of the housing market and the current government's unwillingness to even address other factors exacerbating this.

[bolognium]

Originally Posted by lio45

You take HELOCs on it, and burn that money to live. Then when you die your kids inherit a house in which there’s still substantial equity, just not fully “free and clear”.

The Toronto Life Guy had like $1M in mortgage(s), when he sold for $2.5M. (Numbers from memory; thewave46 recently relinked to that (in)famous piece)

Fair nuff. Though Toronto Life Guy had to move 100km out of the city to rent in a tiny farming town and now regrets his decision and misses his little victorian on the park.

[theman23]

Originally Posted by bolognium

Fair nuff. Though Toronto Life Guy had to move 100km out of the city to rent in a tiny farming town and now regrets his decision and misses his little victorian on the park.

He actually recently did a follow up piece. Bought a 32 acre property in Hagersville with half the cash from his Toronto house and seems to be pretty happy with the decision.
https://torontolife.com/real-estate/...or-rural-life/

[jonny24]

Great, now I'm jealous of Toronto Life Guy. All I want is a rural place within commuting distance of Hamilton.... he got a deal at $1.175m too, I'm budgeting about $1.5m for what I want (and will never afford).

[davidivivid]

Considering that median household income may vary importantly from city to city inside each single province, using solely provincial median income will obviously skew the results. Interesting nonetheless.


https://www.royallepage.ca/en/reales...age%20payment.

[Nashe]

Moncton dropped off the bottom of that list like a cannonball.

[goodgrowth]

Originally Posted by davidivivid

Considering that median household income may vary importantly from city to city inside each single province, using solely provincial median income will obviously skew the results. Interesting nonetheless.


https://www.royallepage.ca/en/reales...age%20payment.

Still sort of crazy that the 6th largest CMA is the 5th most affordable.

[ssiguy]

Not only has JT's comment reflected his own priorities but also those of his political masters.............the Banks and large corporations who live off cheap imported labour.

Such a policy mindset is why Canada is getting progressively poorer every year and that trend will continue. This is part of the reason why Canadian companies spend so little on productivity and the Banks never lend to small businesses...............why take a chance on businesses when investing in real estate is a sure thing and Ottawa will make sure that it is? Why build rentals when real estate is a guarantee of money with far faster returns?

This also sends out the message to investors that buying up real estate is a good bet which means as soon as interest rates drop, they will buy in en masse sending prices further into the stratosphere with no risk. There is no such thing as keeping prices steady when you guarantee the price will never decline. This is the same logic Christy Clarke used a decade ago saying she will not put people's equity at risk and hence the situation Vancouver is now in.

Ottawa has decided to follow BC's false economic model and just build an economy upon highly unproductive real estate and why we have soaring rates of social inequality.

[shreddog]

Originally Posted by lio45

So I wouldn’t expect too much from PP ...

The real question is will he appoint himself the "Minister of Youth" as JT did (so ironically) back in 2015?

Trudeau government still trying to figure out national youth policy

Link

In the end, I guess they did figure out a policy ... the ever popular (to boomers at least) - Fuck em high, Fuck'em low approach.