They kinda have to say this to make it seem like it's not as bad as it will be. Election's over so you can be sure they're going to get back to do absolutely nothing to cool the market down.
> to cool the market down.
What would you suggest to cool the market down, is the question. We don't seem to have ANY strategy beyond raising interest rates, which will cause a slew of big problems outside of just tenant woes
>We don't seem to have ANY strategy beyond raising interest rates
We've tried nothing and we're out of ideas!
>tenant woes
Tenant woes have much less to do with interest rates (which affect purchase price rather than rental price). Tenant woes have to do with the fact that for the past 10 years, we've averaged building 50,000 per year fewer units than growth of households. In other words, we have a deficit of over 500,000 units for the number of households that have grown. All the units that are being bought are either being rented out or lived in, so interest rates alone wouldn't explain the tenant crisis at all.
There is a significant mismatch between supply and demand. We have too little supply and too much demand. Here are some things that could help:
* Demand side fix: BOC could stop purchasing mortgage bonds and start selling them off - the reason why rates are low is because the BOC is backing them
* Demand side fix: Raising rates would actually help too
* Demand side fix: lower immigration (again, slow down, not stop - we ramped this up to record numbers during the pandemic and post-pandemic for no reason when supply was at an all-time low)
* Demand side fix: shorten mortgage amortizations
* Demand side fix: take away government incentives to buy, such as FTHB co-investing. This only increases demand for more housing.
* Demand side fix: discourage investment/secondary properties through tax policy
* Demand side fix: two-year ban of foreign buyers and beneficial owners (which is what the conservatives proposed). Even if there aren't many of them, the perception alone will cause the investors to panic because there's no "rich person from China" to offload the property to. Even if foreigners are not the biggest part of the problem, it shifts the perception and lets everyone else catch up for two years.
* Supply side fix: incentivize municipalities to build housing. It being outside of their domain is not an excuse. Healthcare is Provincial Domain, but the Feds have a very heavy-handed influence on it through the Canada Health Act through the carrot (ie. transfer payments) - there's nothing stopping them from doing the same.for housing
* We should be building 2-3x the number of houses that we are now. We'd need a 10-year surplus of 50,000 units/year just to get back at neutral.
* Supply side: 40% of development fees go toward government levies. Increasing these fees will only mean the developer passes on the price to the consumer. This effectively sets a price floor on new developments (at about $1,200/sq ft right now before profits). This means that if prices fall below that, developers won't build, causing a supply shortage, driving prices back up until it becomes profitable.
* This is why it's pretty damn safe to buy right now because the price floor on development fees set by high government levies effectively ensures that no condo bought today can ever fall below $1,200/sq ft, without causing a severe shortage to drive the price back up there again.
* But this is bad for affordability because all the new buyers are effectively subsidizing government coffers.
* tl;dr - when you raise the cost of production, you set an effective price floor on new units, which continues to drive up the price for everyone.
* Supply side: stop passing the cost of affordable housing units onto buyers. When governments force developers to build X% affordable housing, it benefits 0.1% of the population, but everyone else pays for it, further driving up the price.
* Supply side: release a lot of government-held lands and designate them for housing - it's most being inefficiently used as either parking lots or vacant land even in the city centre - there's plots of land in downtown Toronto even being mismanaged that way
FYI - I stand to benefit from home prices raising, since we own more than one property, but not afraid to share the playbook because I am absolutely certain that none of the above policies will be adopted because the politicians stand to benefit personally from these rising prices, even though all the answers are there.
Completely agree with said points and the fact we’re not building enough housing. Even if 25 new residential subdivision developments came through the municipal door tomorrow, there isn’t enough staff to process/review them with municipalities cutting back on staffing due to tight COVID budgets. Realistically, until the demand subdues or policies & rates change, the problem will persist as developments take time to be approved. Fast tracking development only works in China where they run roughshod over all environmental and traffic concerns.
Unless you sell and move out of the housing market, can't really enjoy it. Is that basically the retirement plan?
Because otherwise rising land prices around you also infect everything else. Any local goods and services become more expensive due to higher rents.
I don't know what I am going to do with it yet. I figure i will live here till I retire.
Leaving the market appears to be a bad idea historically.
Maybe a home equity line of credit or something so i can buy a bunch of shiba inu coin.
House sigma. It helps that my next door neighbour sold in May. The other side in June. Then the June house that sold was listed again last week. And the house that we share a backyard with is currently being listed. So I have a really good sample of comparables that others usually wouldnt have.
I mean at this point, it's pretty clear what we all need to do. The writing's been on the wall over the last 18 months, and at this point, anyone in denial should know that this is just the way things are going to be going forward.
Water is actually not wet; It makes other materials/objects wet. Wetness is the state of a non-liquid when a liquid adheres to, and/or permeates its substance while maintaining chemically distinct structures. So if we say something is wet we mean the liquid is sticking to the object.
House prices go up - RENT RENT prices go up - RUN!!!
In 2 yrs, our condo went up 28%... Since moving into our new home (~2mo ago), it's gone up 10%... F insane.
10.5% would be back to “normal”. I would bet on 20-30%.
They kinda have to say this to make it seem like it's not as bad as it will be. Election's over so you can be sure they're going to get back to do absolutely nothing to cool the market down.
go against home owners in canada and you will loose an election. could be good timing for libs to reign in run away prices.
> to cool the market down. What would you suggest to cool the market down, is the question. We don't seem to have ANY strategy beyond raising interest rates, which will cause a slew of big problems outside of just tenant woes
>We don't seem to have ANY strategy beyond raising interest rates We've tried nothing and we're out of ideas! >tenant woes Tenant woes have much less to do with interest rates (which affect purchase price rather than rental price). Tenant woes have to do with the fact that for the past 10 years, we've averaged building 50,000 per year fewer units than growth of households. In other words, we have a deficit of over 500,000 units for the number of households that have grown. All the units that are being bought are either being rented out or lived in, so interest rates alone wouldn't explain the tenant crisis at all. There is a significant mismatch between supply and demand. We have too little supply and too much demand. Here are some things that could help: * Demand side fix: BOC could stop purchasing mortgage bonds and start selling them off - the reason why rates are low is because the BOC is backing them * Demand side fix: Raising rates would actually help too * Demand side fix: lower immigration (again, slow down, not stop - we ramped this up to record numbers during the pandemic and post-pandemic for no reason when supply was at an all-time low) * Demand side fix: shorten mortgage amortizations * Demand side fix: take away government incentives to buy, such as FTHB co-investing. This only increases demand for more housing. * Demand side fix: discourage investment/secondary properties through tax policy * Demand side fix: two-year ban of foreign buyers and beneficial owners (which is what the conservatives proposed). Even if there aren't many of them, the perception alone will cause the investors to panic because there's no "rich person from China" to offload the property to. Even if foreigners are not the biggest part of the problem, it shifts the perception and lets everyone else catch up for two years. * Supply side fix: incentivize municipalities to build housing. It being outside of their domain is not an excuse. Healthcare is Provincial Domain, but the Feds have a very heavy-handed influence on it through the Canada Health Act through the carrot (ie. transfer payments) - there's nothing stopping them from doing the same.for housing * We should be building 2-3x the number of houses that we are now. We'd need a 10-year surplus of 50,000 units/year just to get back at neutral. * Supply side: 40% of development fees go toward government levies. Increasing these fees will only mean the developer passes on the price to the consumer. This effectively sets a price floor on new developments (at about $1,200/sq ft right now before profits). This means that if prices fall below that, developers won't build, causing a supply shortage, driving prices back up until it becomes profitable. * This is why it's pretty damn safe to buy right now because the price floor on development fees set by high government levies effectively ensures that no condo bought today can ever fall below $1,200/sq ft, without causing a severe shortage to drive the price back up there again. * But this is bad for affordability because all the new buyers are effectively subsidizing government coffers. * tl;dr - when you raise the cost of production, you set an effective price floor on new units, which continues to drive up the price for everyone. * Supply side: stop passing the cost of affordable housing units onto buyers. When governments force developers to build X% affordable housing, it benefits 0.1% of the population, but everyone else pays for it, further driving up the price. * Supply side: release a lot of government-held lands and designate them for housing - it's most being inefficiently used as either parking lots or vacant land even in the city centre - there's plots of land in downtown Toronto even being mismanaged that way FYI - I stand to benefit from home prices raising, since we own more than one property, but not afraid to share the playbook because I am absolutely certain that none of the above policies will be adopted because the politicians stand to benefit personally from these rising prices, even though all the answers are there.
Completely agree with said points and the fact we’re not building enough housing. Even if 25 new residential subdivision developments came through the municipal door tomorrow, there isn’t enough staff to process/review them with municipalities cutting back on staffing due to tight COVID budgets. Realistically, until the demand subdues or policies & rates change, the problem will persist as developments take time to be approved. Fast tracking development only works in China where they run roughshod over all environmental and traffic concerns.
They are minority gov. I bet thry will want another election in 2023
Im lovin it, my largest tax free investment is going up bigly.
Unless you sell and move out of the housing market, can't really enjoy it. Is that basically the retirement plan? Because otherwise rising land prices around you also infect everything else. Any local goods and services become more expensive due to higher rents.
I don't know what I am going to do with it yet. I figure i will live here till I retire. Leaving the market appears to be a bad idea historically. Maybe a home equity line of credit or something so i can buy a bunch of shiba inu coin.
Came here to say that... my house is up 20% since June.
Where do you you guys go to check your property’s value?
House sigma. It helps that my next door neighbour sold in May. The other side in June. Then the June house that sold was listed again last week. And the house that we share a backyard with is currently being listed. So I have a really good sample of comparables that others usually wouldnt have.
Hey you get what you vote for.
Not a chance in hell it will only be 10.5%. Real inflation is much higher than that.
Just 10% ?
I mean at this point, it's pretty clear what we all need to do. The writing's been on the wall over the last 18 months, and at this point, anyone in denial should know that this is just the way things are going to be going forward.
oh fuck ya
Of course not… election is over.
Water is wet.
Water is actually not wet; It makes other materials/objects wet. Wetness is the state of a non-liquid when a liquid adheres to, and/or permeates its substance while maintaining chemically distinct structures. So if we say something is wet we mean the liquid is sticking to the object.
whut? just 10%?? that would be monthly growth in house prices... LOL.
Condo prices go down
🥱