"One of the choices the Federal Liberals have made in the Housing space is refusing to want prices to fall."
This is utter nonsense. If you want paid subscribers, try not typing bullshit. In fact, home prices skyrocketed for YEARS - every leap in price celebrated by developers and realtors and HOME OWNERS and chumps in the media who partook in this boosterism - in part BECAUSE interest rates were abnormally low for years, creating the illusion of affordability where none existed. The Bank of Canada raising interest rates had the effect of bringing home prices down. When interest comes down, prices will rise again. That's the "free market" at work.
The biggest factor in the cost of housing is supply and demand. In places where demand is highest (Vancouver & Toronto), prices have skyrocketed. On the East Coast and on the Prairies (Manitoba & Saskatchewan), not so much. As Scrim has said, immigration has played a significant factor.
Not as simple as that. Years ago when foreign investors flooded the market (not immigrants who contribute, but the parasite "investor class" Harper created), over 60,000 condos in Vancouver sat empty because the owners lived in China. Harper imported hundreds of thousands of immigrants, most of them temporary foreign workers but he also created an investor class and these people had no attachment to the Canada at all. What's more, housing prices have escalated unreasonably everywhere. Vancouver and Toronto have the highest prices but unsustainable home price inflation spread across the country, esp when BC introduced a foreign buyers tax to discourage foreign nationals buying housing stock.
Developers and realtors crow it's supply and demand but home construction ballooned in Vancouver and home prices just got higher. This was partly driven by incredibly low borrowing rates. People fell under the illusion that they could afford a million dollar condo because the monthly payments were low enough. A slight uptick in interest rates proved what was true. The home price is the problem. (I lived through 20% mortgage rates in the 80s so people complaining about 5% makes me laugh.)
Adding to the complexities is Airbnb and whole apartment buildings being used for this purpose. Hundreds of apartment units in Victoria BC are Airbnb or short term rentals for maximum profits.
It's not as simple as blaming immigrants, although we are clearly in a pickle when industry demands a steady supply of foreign labour and birth rates are low.
Thanks for the comments. No one is "blaming immigrants", but when hundreds of thousands of people a year move to Canada, with the vast majority heading to the GTA, they have to live somewhere. I hear all of these stories about short term rentals; I would like to know if anyone can provide a credible study on just how many there actually are. With respect to home prices in Canada, there is actually quite a disparity. Homes in Alberta are about half of what they are in the GTA for example. As per condos, right now in Toronto, you can't give them away. Investors are losing their shirts on them.
When I point out the myriad causes of home price inflation and the crunch, including telling you there were thousands of vacant owned properties until the foreign buyers tax and you ignore it, you deserve what you get.
This reminds me of the debate around defence spending. Everyone wants to support the military until the cheque shows up.
I can't recall if it was Abacus but I know one of the polling companies did a poll with the intent of outlining the proclivity for the electorate to simultaneously take conflicting positions.
In that case, it was surrounding spending. There was overwhelming sentiment that the government needed to cut spending yet those polled also overwhelmingly supported increases to spending on healthcare, defence, etc.
I could imagine we might see a similar effect whereby homeowners say they would be willing to live with a drop in house prices but completely change their mind when they start actually seeing losses in equity.
Housing supply and affordability is a GLOBAL issue. It's worthy then to explore commonalities around the globe. (Clearly, while powerful, it's NOT JT and the Libs. At the core is the global economic system. Housing has become a commodity through REITs and PE (Private Equity) especially as commercial RE is suffering still from the Work From Home trends as a result of COVID. Home owners have now become hoteliers through short-term rentals. (Incidentally Barcelona has banned short-term rentals as locals had no where to live.) Another commonality is single-use zoning and a highly convoluted planning and project approval system which takes years to navigate and adds costs to development - which gets passed on to unit owners or renters. This convoluted process has also supported NIMBYism. As a result two citizen organizations have formed: Strong Towns & Smart Density, with a focus on making changes to this disfunction, with membership in a number of countries. Further, our current economic system encourages greed and hence the costs of construction (and most things) has increased by double digits. Likewise, boomers are retiring and the building industry is short of workers and pressing the Feds for more immigration. Also, the building industry productivity has been flat for decades. There is little investment in technology and improved processes. These are major influencers - Globally, including Canada. Of course the worst scenarios are in the biggest cities. However, if someone desires affordability, Moosomin Sask is offering new homeowners $30,000 towards a new home.
Can any political party fix this? NO! It's going to take effort on everyone's part, including provincial & municipal governments - who have more direct responsibility.
what's the plan to bring down house prices??? how do you do it? when interest was low corporations or some individuals bought up houses and then turned around and made them Air B&B....and our ON premiere has allowed above guidline rent increases pricing out some Toronto tenants and rental unit built after Nov.15 2018 is not subject to provincial rent control.....so tellme how to fix this mess?
As an aging Boomer I am on the horns of a dilemma…. I will make an obscene profit on my existing house when I downsize but prices for smaller bungalows in my town ( if I can find one) are so high that I will need all of my profits to afford the switch. I would love to be able to sell my house for a reduced profit so that a young family could afford it but I can’t . So I support the movement to lowering house prices as long as it coincides with reduced costs of new builds too
I believe you are reading this Abacus poll completely wrong. Of course there is wide support for more affordable house prices. Nobody likes to see fellow Canadians struggle to afford a home that they like. I am actually surprised that the percentage is not higher.
Now, what if Abacus had asked the following question:
Do you support policies that reduce home prices even if this reduces the value of the home you are currently living in?
I think the support would drop to single digits.
Of course the other question is what these magical policies would be.
I have heard more than one Liberal MP worry about the dangers of falling houser prices for their chances of re-election. It is quite clear that the Liberals want to "solve" the housing problem without falling prices. The reality is that they can't.
That is why, instead, they subsidize buyers. Subsidies for first time home owners, subsidies for this group and that group. But these subsidies allow buyers to bid up house prices, without materially improving their own situations. The winners are the sellers, and those who do not sell but enjoy the warm feeling of their net vale increasing without any action on their part.
Reduction of red tape would be a start. I have heard Mike Moffat describe the hurdles new developments builders must go through. New regulations are constantly being added, no doubt for worthwhile reasons. But existing regulations are never reviewed and, if no longer necessary, eliminated. As a result, the pile grows and grows.
One more point -- the exemption from capital gains tax of the primary residence. This is truly outrageous. The richer you are, the bigger the tax break we give you. Again, the rationale is that existing homeowners would revolt. But I own a paid-up house, and I would be quite willing to have capital gains taxes apply -- providing it applies to all of us homeowners. There are lots more like me, but we don't speak, or at any rate not very loudly. By contrast, the opponents s[eak very loudly indeed.
We often hear private corporations criticized because they a driven by "the profit motive". But how about politicians, driven by the "power motive", willing to do anything to stay in power?
Abacus polling holds until prices begin to fall and peoples equity suffers. It will take decades to recover from the disastrous open door policies of the last 5 years, maybe start with a plan to deport those illegally in Canada and reestablish the moderately successful Conservative skills only based policy going forward.
"One of the choices the Federal Liberals have made in the Housing space is refusing to want prices to fall."
This is utter nonsense. If you want paid subscribers, try not typing bullshit. In fact, home prices skyrocketed for YEARS - every leap in price celebrated by developers and realtors and HOME OWNERS and chumps in the media who partook in this boosterism - in part BECAUSE interest rates were abnormally low for years, creating the illusion of affordability where none existed. The Bank of Canada raising interest rates had the effect of bringing home prices down. When interest comes down, prices will rise again. That's the "free market" at work.
The biggest factor in the cost of housing is supply and demand. In places where demand is highest (Vancouver & Toronto), prices have skyrocketed. On the East Coast and on the Prairies (Manitoba & Saskatchewan), not so much. As Scrim has said, immigration has played a significant factor.
Not as simple as that. Years ago when foreign investors flooded the market (not immigrants who contribute, but the parasite "investor class" Harper created), over 60,000 condos in Vancouver sat empty because the owners lived in China. Harper imported hundreds of thousands of immigrants, most of them temporary foreign workers but he also created an investor class and these people had no attachment to the Canada at all. What's more, housing prices have escalated unreasonably everywhere. Vancouver and Toronto have the highest prices but unsustainable home price inflation spread across the country, esp when BC introduced a foreign buyers tax to discourage foreign nationals buying housing stock.
Developers and realtors crow it's supply and demand but home construction ballooned in Vancouver and home prices just got higher. This was partly driven by incredibly low borrowing rates. People fell under the illusion that they could afford a million dollar condo because the monthly payments were low enough. A slight uptick in interest rates proved what was true. The home price is the problem. (I lived through 20% mortgage rates in the 80s so people complaining about 5% makes me laugh.)
Adding to the complexities is Airbnb and whole apartment buildings being used for this purpose. Hundreds of apartment units in Victoria BC are Airbnb or short term rentals for maximum profits.
It's not as simple as blaming immigrants, although we are clearly in a pickle when industry demands a steady supply of foreign labour and birth rates are low.
Thanks for the comments. No one is "blaming immigrants", but when hundreds of thousands of people a year move to Canada, with the vast majority heading to the GTA, they have to live somewhere. I hear all of these stories about short term rentals; I would like to know if anyone can provide a credible study on just how many there actually are. With respect to home prices in Canada, there is actually quite a disparity. Homes in Alberta are about half of what they are in the GTA for example. As per condos, right now in Toronto, you can't give them away. Investors are losing their shirts on them.
I didn't expect you to learn anything.
Thanks for your kind words.
When I point out the myriad causes of home price inflation and the crunch, including telling you there were thousands of vacant owned properties until the foreign buyers tax and you ignore it, you deserve what you get.
This reminds me of the debate around defence spending. Everyone wants to support the military until the cheque shows up.
I can't recall if it was Abacus but I know one of the polling companies did a poll with the intent of outlining the proclivity for the electorate to simultaneously take conflicting positions.
In that case, it was surrounding spending. There was overwhelming sentiment that the government needed to cut spending yet those polled also overwhelmingly supported increases to spending on healthcare, defence, etc.
I could imagine we might see a similar effect whereby homeowners say they would be willing to live with a drop in house prices but completely change their mind when they start actually seeing losses in equity.
Housing supply and affordability is a GLOBAL issue. It's worthy then to explore commonalities around the globe. (Clearly, while powerful, it's NOT JT and the Libs. At the core is the global economic system. Housing has become a commodity through REITs and PE (Private Equity) especially as commercial RE is suffering still from the Work From Home trends as a result of COVID. Home owners have now become hoteliers through short-term rentals. (Incidentally Barcelona has banned short-term rentals as locals had no where to live.) Another commonality is single-use zoning and a highly convoluted planning and project approval system which takes years to navigate and adds costs to development - which gets passed on to unit owners or renters. This convoluted process has also supported NIMBYism. As a result two citizen organizations have formed: Strong Towns & Smart Density, with a focus on making changes to this disfunction, with membership in a number of countries. Further, our current economic system encourages greed and hence the costs of construction (and most things) has increased by double digits. Likewise, boomers are retiring and the building industry is short of workers and pressing the Feds for more immigration. Also, the building industry productivity has been flat for decades. There is little investment in technology and improved processes. These are major influencers - Globally, including Canada. Of course the worst scenarios are in the biggest cities. However, if someone desires affordability, Moosomin Sask is offering new homeowners $30,000 towards a new home.
Can any political party fix this? NO! It's going to take effort on everyone's part, including provincial & municipal governments - who have more direct responsibility.
what's the plan to bring down house prices??? how do you do it? when interest was low corporations or some individuals bought up houses and then turned around and made them Air B&B....and our ON premiere has allowed above guidline rent increases pricing out some Toronto tenants and rental unit built after Nov.15 2018 is not subject to provincial rent control.....so tellme how to fix this mess?
As an aging Boomer I am on the horns of a dilemma…. I will make an obscene profit on my existing house when I downsize but prices for smaller bungalows in my town ( if I can find one) are so high that I will need all of my profits to afford the switch. I would love to be able to sell my house for a reduced profit so that a young family could afford it but I can’t . So I support the movement to lowering house prices as long as it coincides with reduced costs of new builds too
I believe you are reading this Abacus poll completely wrong. Of course there is wide support for more affordable house prices. Nobody likes to see fellow Canadians struggle to afford a home that they like. I am actually surprised that the percentage is not higher.
Now, what if Abacus had asked the following question:
Do you support policies that reduce home prices even if this reduces the value of the home you are currently living in?
I think the support would drop to single digits.
Of course the other question is what these magical policies would be.
Right on.
I have heard more than one Liberal MP worry about the dangers of falling houser prices for their chances of re-election. It is quite clear that the Liberals want to "solve" the housing problem without falling prices. The reality is that they can't.
That is why, instead, they subsidize buyers. Subsidies for first time home owners, subsidies for this group and that group. But these subsidies allow buyers to bid up house prices, without materially improving their own situations. The winners are the sellers, and those who do not sell but enjoy the warm feeling of their net vale increasing without any action on their part.
Reduction of red tape would be a start. I have heard Mike Moffat describe the hurdles new developments builders must go through. New regulations are constantly being added, no doubt for worthwhile reasons. But existing regulations are never reviewed and, if no longer necessary, eliminated. As a result, the pile grows and grows.
One more point -- the exemption from capital gains tax of the primary residence. This is truly outrageous. The richer you are, the bigger the tax break we give you. Again, the rationale is that existing homeowners would revolt. But I own a paid-up house, and I would be quite willing to have capital gains taxes apply -- providing it applies to all of us homeowners. There are lots more like me, but we don't speak, or at any rate not very loudly. By contrast, the opponents s[eak very loudly indeed.
We often hear private corporations criticized because they a driven by "the profit motive". But how about politicians, driven by the "power motive", willing to do anything to stay in power?
Abacus polling holds until prices begin to fall and peoples equity suffers. It will take decades to recover from the disastrous open door policies of the last 5 years, maybe start with a plan to deport those illegally in Canada and reestablish the moderately successful Conservative skills only based policy going forward.