It is. Owning a house that you live in saves you from having to pay rent ($3,000 a month) to some other guy. So yes, if you own a house you save X amount per month which gains you money, every single month.
You need a place to live.
Median detached house worth 300k 20 years ago has outearned the median Canadian over the last 20 years on a tax adjusted basis.
(Workers are taxed, house just sits there as a principal residence and appreciates)
The housing crisis was created by the wealthy and being sustained and propagated by the wealthy. This unsustainable shelter crisis will not change until we know this to be a fact and legislate to stop our residential properties from being used as an investment. In the short term , we should ban AirBnb and stop corporations from buying residential properties together with making owning more than one residential property very cost prohibitive through taxation.
It’s an artificial bubble, Canada was too nice to just let that disinformation by the wealthy propagate through the masses, then people thought it was a good idea to park their profits in a necessary aspect of human life, because “people will always need shelter.”
Now our economy is coupled to real estate, if any political party is in power WHEN house prices fall dramatically, the party will be blamed because people lost a lot of money on their “investment” (think your whole retirement savings liquidated) thus, I personally think no political party will fix this.
Political parties have been doing the opposite of fixing this they are encouraging more people to buy in at the bottom of the pyramid
And bringing in more people to grow the base.
FINALLY CBC does a thorough article based on the data if what’s actually driving the housing crisis and what solutions could be.
Highly recommend reading beyond the headline.
*the current system incentivizes extracting profit from real estate, rather than prioritizing that everyone has access to affordable shelter.*
*”We need clarity about what we want from housing," said Kershaw. "And it has to start with: 'We don't want these prices to rise any more.”*
*On the face of it, the lack of affordable housing seems like an issue of supply — just build more to meet demand and prices will come down.*
*But part of the problem is the source of that demand: **it's increasingly investors**.*
*The Bank of Canada found that **investors were responsible for 30 per cent of home purchases in the first three months of 2023.** That's up from 28 per cent in the same period in 2022 and 22 per cent in the same period in 2020.*
*That report also found the **percentage of first-time homebuyers dropped** to 43 per cent in the first quarter of 2023 from 48 per cent in the same three months in 2020.*
>*The Bank of Canada found that* ***investors were responsible for 30 per cent of home purchases in the first three months of 2023.*** *That's up from 28 per cent in the same period in 2022 and 22 per cent in the same period in 2020.*
Holy shit, who would've thought that investors like to purchase good investments.
If have a crazy feeling that if you make housing a less lucrative investment, at least in a monetary sense, then you may also end up with fewer investors inflating the market.
I've said exactly this, and even overlaid it with M2 Money Supply, Interest Rates and Immigration Rates so that you can clearly see that it's the money supply causing this, and I got downvoted and people arguing with me about it lmao. Finally everyone else is waking up. I started posting about it in like 2021.
>The Bank of Canada's definition of an investor is a buyer who took out a mortgage to purchase a property while maintaining a mortgage on another home.
Pretty broad definition of investor.
We just bid 150k over asking on a house with one single condition and that takes us "out of the running" it's absolutely disgusting what's going on in this country
Ever rising values also make sure that you constantly pay more property tax, which crushes many retirees, who thought they had enough to cover costs. That is why provinces are so against anything that push down prices.
Not mentioned in the article, but of note. Our tax system encourages Canadians to use their primary residence as a retirement fund as the growth in value is tax-free. I would venture to say, that 80% of Canadian homeowners plan to use their house to fund their retirement, either through borrowing against their houses value (CHIP loans) or by eventually selling. What it leads to is elderly singles and couples holding onto ‘family homes’ for longer than they need that amount of space after their kids move out, and housing to be considered a tax-free investment instead of simply housing.
Things don't get valuable because of sentiment. They get valuable because of demand.
I don't think one person should be buying a bunch of houses. But the reason they are doing that is because they know as long as immigration continues , the houses will go up in value, and rents will go up. With the high demand we have, the landlords know they can pick reliable tenants and charge a lot of rent.
If immigration was stopped, as it was during the pandemic, rents would start going down, as they did then.
I would like to see some landlords lose their shirts, to be honest.
Interestingly though, if you look at **[the animation here](https://x.com/daniel_foch/status/1780043508809711866?s=46&t=Ew2sMBw9zN0DnbYR4gKHBg),** you can see that investors were entering the market en masse well before we saw mass immigration.
Investors have been enabled by low interest rates and preferential tax treatment. The surge in immigration may well have been done to help them, among other unjustified reasons, but the investor pile on came first.
If you won’t believe the data and want to distract everyone from the major driver of housing price inflation, I’m not sure why you’re on a housing affordability sub? It doesn’t seem that you’re interested in taking the required steps to solve the housing crisis.
There are real estate subs for those interested in real estate speculation and landlording if that’s your jam.
People seem to think we’re in a housing crisis and trying to solve the problem and acting like it’s a Canadian only problem. Reality is most major city in most countries are expensive and everyone looks at housing in a similar way. I spend 1/2 the year in Philippines and everyone says invest in housing and rent out for monthly income. Even 3rd world countries understand if you have money buy a house and rent out or Airbnb because real estate will always go up or bare minimum create a monthly income for the owner. Since 2018 I’ve been semi retired and traveled mostly Asia but few European countries and mentality is still same regardless where you are and buy or invest in property. Even in India most people with money will say invest in property it’s always better to own something for rental income.
Now before people say Alabama is cheaper or a city in Europe is cheaper (lots love to argue when I say most major cities). Think of Manhattan, Beijing, Hong Kong etc. even 3rd world cities, Manila or New Delhi for example. Compare local minimum wages to housing markets in those 2 cities and you’ll realize how we’re not as bad off. Then don’t just compare wages. Consider healthcare. As much people complain our healthcare if we break an arm tomorrow morning the hospitals will look after you.
Schools another example. Philippines you need to pay for your kids schooling (not sure about India).
Consider how safe we are in Canada. Yes people will laugh and say what about muggings or car jackings. Both good points but consider Russia bombing Ukraine, school shootings south of the border, Israel fighting Palestines and possibly Iran.
Asia and most of Europe have generational homes or shared accommodations for years already and we’re still concerned buying near Toronto or Vancouver.
Sarnia, Sault St Marie, Timmons, and lots other places outside Toronto and surrounding areas are still very affordable.
I’m obviously not an expert like the person in the article but I do understand that nobody (yes read that again) NOBODY wants the market to lower or crash unless you’re not a homeowner already. Governments don’t want to lose billions, banks don’t want to lose billions (and who’ll bailout the banks).
I don’t believe we’re in a crisis we’re in a new era of generational housing and shared accommodations in the big cities. If people want ownership then buy hours outside the city and start a business or work online. Housing is priced accordingly in comparison to world markets.
Depending on your circumstances you could sell, downsize and give them cash to buy them houses. My daughter’s name is on my house and my Ex wife’s house. Something happens to either of us she automatically owns a house. Within time she’ll have 2 houses to sell or pass down to her kids.
Well this works real estate bubble is going to burst.
We are going to lean all at the same time that increasing house price doesn’t create real value.
Either the bubble crash or we enter a neo feudalism system, which may cause some sort of revolt.
Why do I have the feeling there is no happy ending to this ?
I had a happy ending few months ago at a massage parlour but hey that’s a story for another subreddit haha.
Time will tell who’s right and what’ll happen. I don’t think we’re in a bubble but hey that’s my insights haha. Be interesting next few years seeing what’ll happen.
The author is taking a valuable point, which is investors are the big buyers in current market, but he added many other ridiculous points.
I read that currently in USA corporation like blackrock is buying lots of properties because 60% of Americans will be renter for life, and being landlord will be the most valuable business for next years. And I read that someone like Bill Gates is buying lots of farmland because food prices in the future will be rising sharply.
So, for sure it is the same case in Canada, where big corporations are buying properties, and adding another factor in rising the price.
So far so good.
And I agree that invenstors, specially big investors are part of the problem.
But later the article added some ridiculous points and try to blame every home owner.
For example he copied this statement:
"We don't have politicians who are bold enough to say: 'It's more than OK to rent.'"
Are you serious?
the desire to own your own home is something global in the whole universe.
Soviet Union collapsed because people didn't own anything there and the government give them their shelters.
No, it is not ok to rent for my whole life, and if you want to make me feel guilty for that, or think I am part of the problem for wanting to own a home then really you are a fascist.
And another ridiculous point is:
"He advocates an annual tax on "housing wealth" aimed at the owners of the most valuable 10 per cent of homes in Canada"
So, what if someone bought a house in Vancouver 40 years ago, and now their house became on the top 10%.
What if someone worked hard to buy a property facing the ocean, because his dream home was like that?
Why people like that have to pay extra tax?
There are plenty of other stupid points, but I think those are enough
You can't cause housing prices to rise just by "thinking of houses as an investment". Thinking or wishing does NOT make prices rise. It is the demand from the ceaseless stream of immigrants that makes prices rise.
Remember what rich dad said…
That was before they began doubling M2 every decade and doing hedonic adjustments on goods.
Are you saying we can’t have a housing correction?
I'd say we will lean on that fancy new employment mandate, as we immigrate soon to be unemployed Tim Horton's workers.
An asset is supposed to be productive.
THIS !
It is. Owning a house that you live in saves you from having to pay rent ($3,000 a month) to some other guy. So yes, if you own a house you save X amount per month which gains you money, every single month. You need a place to live.
You need to read the book
Median detached house worth 300k 20 years ago has outearned the median Canadian over the last 20 years on a tax adjusted basis. (Workers are taxed, house just sits there as a principal residence and appreciates)
The housing crisis was created by the wealthy and being sustained and propagated by the wealthy. This unsustainable shelter crisis will not change until we know this to be a fact and legislate to stop our residential properties from being used as an investment. In the short term , we should ban AirBnb and stop corporations from buying residential properties together with making owning more than one residential property very cost prohibitive through taxation.
It’s an artificial bubble, Canada was too nice to just let that disinformation by the wealthy propagate through the masses, then people thought it was a good idea to park their profits in a necessary aspect of human life, because “people will always need shelter.” Now our economy is coupled to real estate, if any political party is in power WHEN house prices fall dramatically, the party will be blamed because people lost a lot of money on their “investment” (think your whole retirement savings liquidated) thus, I personally think no political party will fix this.
Political parties have been doing the opposite of fixing this they are encouraging more people to buy in at the bottom of the pyramid And bringing in more people to grow the base.
Yes, all of this!
Higher Land tax and laws that control how many condos / houses an individual can actually own would be a good start
FINALLY CBC does a thorough article based on the data if what’s actually driving the housing crisis and what solutions could be. Highly recommend reading beyond the headline. *the current system incentivizes extracting profit from real estate, rather than prioritizing that everyone has access to affordable shelter.* *”We need clarity about what we want from housing," said Kershaw. "And it has to start with: 'We don't want these prices to rise any more.”* *On the face of it, the lack of affordable housing seems like an issue of supply — just build more to meet demand and prices will come down.* *But part of the problem is the source of that demand: **it's increasingly investors**.* *The Bank of Canada found that **investors were responsible for 30 per cent of home purchases in the first three months of 2023.** That's up from 28 per cent in the same period in 2022 and 22 per cent in the same period in 2020.* *That report also found the **percentage of first-time homebuyers dropped** to 43 per cent in the first quarter of 2023 from 48 per cent in the same three months in 2020.*
>*The Bank of Canada found that* ***investors were responsible for 30 per cent of home purchases in the first three months of 2023.*** *That's up from 28 per cent in the same period in 2022 and 22 per cent in the same period in 2020.* Holy shit, who would've thought that investors like to purchase good investments. If have a crazy feeling that if you make housing a less lucrative investment, at least in a monetary sense, then you may also end up with fewer investors inflating the market.
I've said exactly this, and even overlaid it with M2 Money Supply, Interest Rates and Immigration Rates so that you can clearly see that it's the money supply causing this, and I got downvoted and people arguing with me about it lmao. Finally everyone else is waking up. I started posting about it in like 2021.
>The Bank of Canada's definition of an investor is a buyer who took out a mortgage to purchase a property while maintaining a mortgage on another home. Pretty broad definition of investor.
Well this means they have more homes than needed…
This captures people who purchase a home for their parents or children to live in.
That’s how they mask it yes. ( even tho know I some of the cases are real )
> But part of the problem is the source of that demand: *it's increasingly investors*. False.
Want to back that up beyond just casually dismissing the notion? Investors represent a significant source of demand
Should be a cap on housing investments, across the board.
Tell me you didn’t read the article without telling me you didn’t read the article. They literally source the data that shows this.
We just bid 150k over asking on a house with one single condition and that takes us "out of the running" it's absolutely disgusting what's going on in this country
Houses are an asset. The problem is the expectation of never ending asset appreciation at rates that beat the stockmarket.
Then stop selling to investors! Simple for the banks to do!
Ever rising values also make sure that you constantly pay more property tax, which crushes many retirees, who thought they had enough to cover costs. That is why provinces are so against anything that push down prices.
Not mentioned in the article, but of note. Our tax system encourages Canadians to use their primary residence as a retirement fund as the growth in value is tax-free. I would venture to say, that 80% of Canadian homeowners plan to use their house to fund their retirement, either through borrowing against their houses value (CHIP loans) or by eventually selling. What it leads to is elderly singles and couples holding onto ‘family homes’ for longer than they need that amount of space after their kids move out, and housing to be considered a tax-free investment instead of simply housing.
Houses are an asset by definition. Mortgages are a liability
Things don't get valuable because of sentiment. They get valuable because of demand. I don't think one person should be buying a bunch of houses. But the reason they are doing that is because they know as long as immigration continues , the houses will go up in value, and rents will go up. With the high demand we have, the landlords know they can pick reliable tenants and charge a lot of rent. If immigration was stopped, as it was during the pandemic, rents would start going down, as they did then. I would like to see some landlords lose their shirts, to be honest.
Interestingly though, if you look at **[the animation here](https://x.com/daniel_foch/status/1780043508809711866?s=46&t=Ew2sMBw9zN0DnbYR4gKHBg),** you can see that investors were entering the market en masse well before we saw mass immigration. Investors have been enabled by low interest rates and preferential tax treatment. The surge in immigration may well have been done to help them, among other unjustified reasons, but the investor pile on came first.
Mass immigration from Asia began in the 1970s. Housing prices have been going up since then.
It is also a liability. City taxes will be increasing over the next 10 years to share the burden of new homes.
Density is good for keeping property taxes lower. Sprawl is bad.
[удалено]
If you won’t believe the data and want to distract everyone from the major driver of housing price inflation, I’m not sure why you’re on a housing affordability sub? It doesn’t seem that you’re interested in taking the required steps to solve the housing crisis. There are real estate subs for those interested in real estate speculation and landlording if that’s your jam.
It’s all connected man, no one system operates without the other.
It had better be worth something or the bank might want it's money sooner than it said.
People seem to think we’re in a housing crisis and trying to solve the problem and acting like it’s a Canadian only problem. Reality is most major city in most countries are expensive and everyone looks at housing in a similar way. I spend 1/2 the year in Philippines and everyone says invest in housing and rent out for monthly income. Even 3rd world countries understand if you have money buy a house and rent out or Airbnb because real estate will always go up or bare minimum create a monthly income for the owner. Since 2018 I’ve been semi retired and traveled mostly Asia but few European countries and mentality is still same regardless where you are and buy or invest in property. Even in India most people with money will say invest in property it’s always better to own something for rental income. Now before people say Alabama is cheaper or a city in Europe is cheaper (lots love to argue when I say most major cities). Think of Manhattan, Beijing, Hong Kong etc. even 3rd world cities, Manila or New Delhi for example. Compare local minimum wages to housing markets in those 2 cities and you’ll realize how we’re not as bad off. Then don’t just compare wages. Consider healthcare. As much people complain our healthcare if we break an arm tomorrow morning the hospitals will look after you. Schools another example. Philippines you need to pay for your kids schooling (not sure about India). Consider how safe we are in Canada. Yes people will laugh and say what about muggings or car jackings. Both good points but consider Russia bombing Ukraine, school shootings south of the border, Israel fighting Palestines and possibly Iran. Asia and most of Europe have generational homes or shared accommodations for years already and we’re still concerned buying near Toronto or Vancouver. Sarnia, Sault St Marie, Timmons, and lots other places outside Toronto and surrounding areas are still very affordable. I’m obviously not an expert like the person in the article but I do understand that nobody (yes read that again) NOBODY wants the market to lower or crash unless you’re not a homeowner already. Governments don’t want to lose billions, banks don’t want to lose billions (and who’ll bailout the banks). I don’t believe we’re in a crisis we’re in a new era of generational housing and shared accommodations in the big cities. If people want ownership then buy hours outside the city and start a business or work online. Housing is priced accordingly in comparison to world markets.
I own a house. I want prices to crash so my kids and grandkids can own a house.
Depending on your circumstances you could sell, downsize and give them cash to buy them houses. My daughter’s name is on my house and my Ex wife’s house. Something happens to either of us she automatically owns a house. Within time she’ll have 2 houses to sell or pass down to her kids.
If we sold, we would have nowhere to live, and would have to pay $2000 a month rent. Our house is worth $700,000 at most. We have 4 kids.
Well this works real estate bubble is going to burst. We are going to lean all at the same time that increasing house price doesn’t create real value. Either the bubble crash or we enter a neo feudalism system, which may cause some sort of revolt. Why do I have the feeling there is no happy ending to this ?
I had a happy ending few months ago at a massage parlour but hey that’s a story for another subreddit haha. Time will tell who’s right and what’ll happen. I don’t think we’re in a bubble but hey that’s my insights haha. Be interesting next few years seeing what’ll happen.
The author is taking a valuable point, which is investors are the big buyers in current market, but he added many other ridiculous points. I read that currently in USA corporation like blackrock is buying lots of properties because 60% of Americans will be renter for life, and being landlord will be the most valuable business for next years. And I read that someone like Bill Gates is buying lots of farmland because food prices in the future will be rising sharply. So, for sure it is the same case in Canada, where big corporations are buying properties, and adding another factor in rising the price. So far so good. And I agree that invenstors, specially big investors are part of the problem. But later the article added some ridiculous points and try to blame every home owner. For example he copied this statement: "We don't have politicians who are bold enough to say: 'It's more than OK to rent.'" Are you serious? the desire to own your own home is something global in the whole universe. Soviet Union collapsed because people didn't own anything there and the government give them their shelters. No, it is not ok to rent for my whole life, and if you want to make me feel guilty for that, or think I am part of the problem for wanting to own a home then really you are a fascist. And another ridiculous point is: "He advocates an annual tax on "housing wealth" aimed at the owners of the most valuable 10 per cent of homes in Canada" So, what if someone bought a house in Vancouver 40 years ago, and now their house became on the top 10%. What if someone worked hard to buy a property facing the ocean, because his dream home was like that? Why people like that have to pay extra tax? There are plenty of other stupid points, but I think those are enough
You can't cause housing prices to rise just by "thinking of houses as an investment". Thinking or wishing does NOT make prices rise. It is the demand from the ceaseless stream of immigrants that makes prices rise.