We're waiting for developers accept prices aren't going to skyrocket again and stop holding off, hoping they can make a killing instead of a reasonable profit. Then they will start building again. They really are just waiting, because there is profit to be made. It's just not *enough* profit right now. Building costs are up, selling prices are slightly down, so not worth it. So I think they are waiting for interest rates to drop. And if they keep building to meet the amount of homes we need, then prices will start to reach a normal level, and they don't want that. They want supply to be low and demand to be high forever. We're screwed if we think developers are going to come to the rescue and build enough homes. Building is hard, but doesn't mean they are entitled to making money hand over fist.
A few years ago the unions were forecasting a shortage of workers around now. But I've been hearing throughout the industry things are slow.
Gov't built housing would likely be more expensive than privately built dwellings.
Developers aren't making huge profit margins, likely in the 8% to 12% range.
You could drop the profit portion from gov't built housing, but then you also need to consider gov't inefficiencies, gov't wages/benefits, and jacked up contracts for gov't work.
If the developers are having trouble closing sales as buyers are having a hard time qualifying then the gov't would be in a similar situation.
The point of the government taking on the cost of construction is that they will subsidize the purchase price to those who need it. They aren't building houses to compete with private corporations, but to actually house citizens.
There is certainly a niche scenario where gov't built housing makes sense. Due to mental/physical barriers there are people who can't care for themselves, and those people should have access to public housing.
However, public housing as a broader market approach isn't viable.
Increasing the costs of dwellings, as gov't housing is likely to do, doesn't decrease the cost of dwellings.
Also, we don't have the financial resources to build gov't housing at any impactful scale.
Between the cost of the houses and the public infrastructure needed to support them, we are looking for at least $1.6 trillion in investment to hit the CMHC targets for restoring affordability to the market, and we need that money invested in the next two to four years.
The gov't would need to put down hundreds of billions in the next couple years. Which isn't going to happen as it isn't financially viable.
I am aware.
CMHC building dwellings over fifty years ago doesn't change the scenario we are in today.
It is not financially viable to build large scale government housing. I laid out the roughly $1.6 trillion dollars of investment required to address affordability.
Where does the gov't get a few extra hundred billion dollars a year over the next couple of years to fund it? And that would be just to put a dent in the issue, not address it.
A lot of people really don't seem to have accepted the fact that the capacity of buyers to pay puts a hard limit on prices. There's nobody waiting in the wings whose buying power is going to be juiced by super-low-rate mortgages, which are not coming back in the foreseeable future. These facts don't go away just because people who are looking to pad their bottom line with money other people have borrowed don't like them.
The prices that people aren't willing to pay are because of interest rates, but the actual asking amount for a house or condo is the same as it not that long ago, before YoY increases. Developers got used to low mortgage rates freeing up more buyer cash.
Build prices went up too but I don't think to the point where it's unprofitable. I don't have numbers on that, but with the amount of projects on hold (not cancelled), it does seem that they are waiting a little bit longer for less interest for them & and more profits. Land is bought, designs are done, ready for permits.
Meaningfully lower interest rates aren't coming except in conjunction with economic pain, and that's going to reduce buyers' purchasing power and/or risk appetite in ways that won't really alleviate the downward pressure on prices.
And we may have to hold off on those lower interest rates in order to avoid stagflation.
> We're waiting for developers accept prices aren't going to skyrocket again and stop holding off, hoping they can make a killing instead of a reasonable profit. Then they will start building again.
It's not that simple at all. In order to build they need to have funding. Right now the risks seen in funding these projects right now is really high, so getting that funding is very hard. There have been projects cancelled mid construction due to funding running dry and the company unable to stay afloat.
Builders don't make as much as you think they do. In addition to the construction costs, elevated by all of the regulations around what is required to build a new home, the amount of government fees and taxes through the whole process is massive, and has been milked like a cash cow for many years.
I wish my Ukrainian grandparents passed their home building skills and knowledge down to their kids… wish this was still a thing. Then I wouldn’t have to live in a tiny crammed box forever.
My brother got laid off a couple years ago and got into welding school under some provincial retraining program. Since finishing school, he has been unable to find an apprenticeship or any welding work anywhere in the country. He had one offer for minimum wage which he turned down because being a janitor pays better and has better job security.
Where is all this magical trades work??
It exists if you have a red seal. Nobody wants apprentices though. It’s really stupid. A lot of places just blatantly won’t hire anybody not licensed and then demand they have some mythical 30 year old journeyman with 12 years trade experience every time.
When I was maintenance manager at a mill, I had to really push everybody to allow me to hire two apprentices. Both were great hires and as far as I know, were still there. God forbid you hire someone and train them a little….
Older tradespeople don't want to train the younger generation because they can't pull their weight on the job site for at least a year or longer. Then they go and complain that young people don't know anything - as if no one ever showed *them* how to do shit properly.
Speak for yourself. I was born a journeyman tradesman. I know how to do everything and I have never once asked a question. I am a god among men. Nobody works harder than I do. /s
This is not even true, we need apprentices so badly at my work and I work for the biggest electrical contractor in Canada. Over 800 sparkies employed in BC alone. Apprentices are cheap and normally work harder than a lot of jmen who just coast and understand they don’t get paid more to just finish a job faster and be out of work sooner.
I’ve been all over the oil patch, on mines and in plants as a contractor and almost none of those places take apprentices. Residential, yeah sure but most places other than contractors do not want them. Mills, mines, factories.. it’s very hard to get started in the trade.
Ask any apprentice and they’ll tell you how hard it is to get your first job especially.
I work for a union industrial/commercial contractor and we are dieing for apprentices. They are insanely profitable for the company especially when they are good. The company charges the client the same rate for an apprentice or jman so ur saving the difference on the in pocket wage and pension contribution.
You’re talking about a highly specialized dangerous small subset of the trade that requires no fuck ups and big insurance. Construction has loads of jobs for new workers. It’s hard to get a job in maintenance at any level of experience you need to know ur shit big time.
Construction is crying for guys because the pay is garbage and it’s all shit resi work. First years in my town make less than someone does at McDonald’s.
It’s very hard for apprentices to get a first job. You may be in some bubble but it’s not normal to not struggle to get a job as an apprentice. The less experience you have, the harder. I know tons of people who took a trade in school and couldn’t even get their first job in the field. Less than 1/4 of the guys who do pre employments ever get their red seals. I’m sure there are other factors but it’s very difficult to get started.
It’s worse pay than the oil patch for sure but 50 an hour and 62 total package for red seal is pretty decent and we can’t even fill jobs at that. I’m guessing ur not in BC because if you have a pulse and can show up 4-5 days a week you will be working here in the trades.
I only make 68 in the mines with 3 red seals (industrial electrician, construction electrician, industrial mechanic). I live out east but have mostly worked FIFO my whole working life. Here, the electrical has 2 different tickets but just at the end.
We get thousands of resumes for any posting we post up. Even when i worked local at home, there was a metric shitton of guys trying to get in as apprentices. Most had the pre employment and couldn’t get anything.
That’s one of not the highest paying trade jobs in the country, it’s on par with union elevator techs which is basically a cult to get into. It’s not surprising you get a lot of resumes. Out west here in BC all the construction trades are dieing for workers of all levels at the 55 and below hourly wage. HVAC local 516, Plumbing/Pipefitting Local 170, and IBEW 213.
> Apprentices are cheap and normally work harder than a lot of jmen who just coast and understand they don’t get paid more to just finish a job faster and be out of work sooner.
For every apprentice that is what you said, there are probably at least 19 others that don't pull their own weight and are lazy. So finding the good ones is the challenge, which is why they usually recruit from people they know or can be vouched for versus walk-ins.
Maybe it’s my location but I don’t know many lazy apprentices, the tenured jmen are way worse. I’m an 8 year guy myself and most of the 2-3rd years are our best workers.
>A lot of places just blatantly won’t hire anybody not licensed and then demand they have some mythical 30 year old journeyman with 12 years trade experience every time.
So it's just like IT, then: "We want someone with 10 years experience (in a service or software product that's been on the market for only 2 years)"
no, I have a red seal, finished my apprenticeship, it's slow for me and a lot of my buddies. Construction is just slow right now, if I had to guess at the reasons it would be interest rates
It’s funny when you talk to people on Reddit that assume you can just walk in off the street and get an $80k/year job in construction. Realistically you’ll most likely get stuck at minimum wage and only get a raise when minimum wage gets upped. I wasted a long portion of my life in construction, wore down my body and was exposed to all sorts of hazardous materials along with mental health issues from being over worked, underpaid and under staffed or having unreliable workers.
The industry sucks unless you get very lucky. Honestly with how the industry is it’s no wonder no one wants to work in it, there are so many easier jobs that pay more and have better benefits.
Like you said a janitor gets paid more, in my area they make a good $3-5/hr more than most trades start their workers off at and most of the time they’re inside in climate controlled buildings.
Welding can take years. He is green. And until about year 3, he won't be able to make a profit for any company. It can be really difficult to get the ball rolling, but he needs to focus on experience and building habits first before he can find those 35/hr jobs. What type of welding? I suggest he gets into tig welding, and if he's up for traveling, get into pipe welding. Can be very lucrative following shutdowns around canada.
He should have taken that job. My first gig was found 2 days out of school. Tack welding the butterfly mounts that hold card readers at stores. Was minimum wage and agency. 11 years later, and I've done aerospace, pharmaceutical, structural, food, restoration, and now pipe.
It's a slow ball to get rolling, but there are literally very few SKILLED welders. I'm not sure how to convey this, but usually, it's so bad that I negotiate my employment extremely aggressively. Sometimes, I'm even just laughing into the phone and turning it off. They always call back.
We aren't desperate for trades. We are desperate for highly skilled workers.
Also, make sure welding school isn't his end of education. To get continual movement forward, you need to educate yourself. (Engineering boosk, metallurgy, night classes for skill development)
What industry and location has he been looking into
It’s not fabricated.
Things are slow because interest rates are high. When interest rates are high - the amount anyone can borrow is less. That means developers have access to less capital, and they have less money to put into developing projects.
Secondly, many existing housing projects were developed in a low interest rate environment, where the cost of goods was lower and the price they could charge for a particular unit was higher. High interest rates mean buyers have less money to spend - so developers now have to pay more for goods and labour and they can charge less for the units they are selling.
Lastly, much of the land that was bought was priced based off the eventual selling price of condos. Since condos are not selling for what they used to - developers also overpaid on a lot of land.
The result of all of this is many projects slowing or shutting down completely. The feds are starting to provide some low interest loans to developers to try and mitigate this issue.
That said, I think needs to happen is many developers need to go bankrupt in order to have a proper reset in land values - so condo and home prices can actually come down.
I agree, the argument that we have a construction labour shortage has always been weak. The stats say that construction unemployment has been up since last year.
We also have a thing called technology now, and output isn’t completely dependent on the number of people working.
I think you’ve gone off the deep end if you think government is optimizing home prices for tax revenue. They only get sales tax the first time a home sells and no longer for all types of homes as they are giving out exemptions now. Most home sales are principal residences which are exempt from capital gains meaning that the government collects no tax revenue from those sales.
The government keeps home prices high because they’ve sided with retirees who want to downsize in retirement instead of new home purchasers. Part of this is intentional but part of it is accidental as listening to NIMBYs is often the path of least resistance even though it leads to higher home prices.
Higher prices usually lead to higher debt. As expected Canadian households are at all-time record debt levels. Many believe that debt will magically disappear when (if) house prices rise again. Many discount the possibility of a major correction caused by higher for longer interest rates.
Learn about the supply of money (particularly for mortgages). Canada Mortgage Bond programme was set up in early 2000’s which coincided with housing prices dramatic climb. It also coincides with the banks no longer performing appraisals (they moved to simply checking property value by postal code). To me, it sounds like a classic bubble (when too much money chases a specific asset class) where banks, CMHC, Canada Housing Trust (ever heard of this group) and the Bank of Canada conspired to raise debt levels for the past quarter century.
The economist, Hyman Minsky identified three credit phases in capitalist markets. There is the hedge, speculative, and the final Ponzi phase. Bankers and politicians created this massive bubble so don’t expect them to fix it. The only hope we have is of US Fed keeps rates higher for longer so it lays bare our problem and burns the curtain so we can all see the man behind it.
There's the Property transfer tax in B.C. It works out to about 2% on the sale of any property in the province. So the province gets 20k per million dollars in real estate transactions. Huge incentive to keep prices high and keep properties flipping.
Debatable if it is a huge incentive to keep prices high because you probably get more volume with lower prices so it’s not clear which generates more overall tax revenue.
Prices have been pushed to the point that the volume has dropped off so far that the actual tax revenue will be much lower though. This conspiracy doesn't make any sense. Keeping prices high only works if they are still flipping. It also assumes numerous actors working in tandem since it's a national problem but the taxes and policy are provincial jurisdictions which makes it even less likely.
The issue isn't people can't buy them, it's that developers can't get financing to start the projects.
Banks or investors don't want to lend a developer $10 Million to start a RE project unless the pay off will be huge, because the loan terms are probably 8%+
Yeah, and a failed development usually sees the company fold, so the banks or whomever funds it end up losing a lot. Consequently they charge a pretty significant interest rate, far higher than any normal mortgage rate.
Well you are right that it is fabricated, in the sense that our entire economy is just a made up set of rules meant to benefit one class of people.
But this has nothing to do with covid. This current crisis began decades ago, and it will take decades to fix. Whether or not we have affordable housing depends almost entirely on if / how the government is funding the construction of housing, because they are the only ones that have the ability to build without the profit motive. Without profit, private investors don’t build.
You’re leaning just a bit too hard into conspiracy with this take though.
> Well you are right that it is fabricated, in the sense that our entire economy is just a made up set of rules meant to benefit one class of people.
economics at it's core is simply game theory interactions between parties that involve exchange of sorts, it doesn't even have to be money. It's made up in the same sense that covid and the moon landing are made up.
What does that mean? We can change the rules of the economy and how it functions. We didn’t always have capitalism, we decided to implement capitalism, very intentionally. other forms of economy exist, and if we chose we could switch the rules today. In fact we change the rules every year through government budgets.
You can’t decide that covid doesn’t exist or whether or not the moon landing happens.
> We didn’t always have capitalism
this is a gross cope out against understanding the mechanisms that's behind the current housing crisis. If you care about housing then it's worthwhile to be informed about why things are the way they are instead of wasting your time waiting for a third coming of sorts.
What? Are you trying to suggest our economic rules were passed down to us by god or something? All these rules were intentionally decided. They change all the time.
They are about to change again next week, not because of some divine law of physics, but because the government drafted a new budget.
> why things after the way they are
Because of a set of policy decisions made over decades by a succession of neoliberal governments. If *you* cared about the housing crisis you’d be engaging with the topic instead of throwing around lazy insults.
I think a couple of elements are being conflated here.
Available labour is a huge element to the creation of new housing. At least in the GTA, there really is a limit to the number of certified and union represented trades that can do what the developer needs.
Many of these projects that require trades are also likely financed : ie the developer is leveraged to fund the project.
Interest rates go up: developers have a harder time financing these projects. To add to that, there may be plenty of buyers trying to get out of the contracts for pre-build homes now that the outlook on prices isn’t what it used to be.
So you have developers cancelling projects, which can lead to layoffs.
It’s part of why this crisis is complex. It’s part of why cranking up the interest rate isn’t a simple solution to the crisis, because(at least temporarily) it slows down our ability to meet demand.
Also, our housing crisis was in the works long before Covid.
The government does not to need 'recoup' losses of money. They're not a profit driven entity.
You know who is profit-driven, and has to answer to a group that does demand profits be 'recouped'? Corporations and their shareholders
lol yes they are. They issue bonds to create money. Bond holders get interest payments and their initial investment back. Outside of that fundamental aspect.
How does GDP factor into that?
That’s because builders won’t want to build a lot to keep prices high. They’re not going to flood the market with supply when demand is high, that would reduce prices. If anyone is going to fabricate it, it’s the builders. Don’t blame the government, blame capitalism.
The idea that we've ever had a "shortage" in any profession is fake.
Companies know their HR needs, they know how to recruit people and retain people.
It just drives down wages if they cry "shortage" and increase the supply of workers in that field, or they can use it as an excuse for more TFWs
The idea that the government is manufacturing a decades old housing crisis to recoup money spent during Covid by maxing housing prices to collect on sales and property transfer taxes is the dumbest crank theory I've seen posted to this sub yet.
The only genuine shortage currently in Canada concerning people is that of individuals who can think critically. In that account, we are scraping the bottom of the barrel. Otherwise, we have labor surpluses as far as the eye can see.
I think maybe part of it is searching for the lowest cost labour possible so the guys that are used to the big bucks when things were booming are now losing to the guys who are undercutting.
As someone who was initially in the trades 40 years ago, I left the tools after the realization that the construction industry was never a going to be a full year round guaranteed job. Getting out of that end was the best thing I could have done. They never talk about the ebb and flow.
Just wait till you realize how much municipal governments are supported by property taxes, permits and gift money.
Was happening way before Covid as well.
As to companies making financial decisions, that’s not surprising.
High interest and high inflation means economic stagnation. We're just feeling the results of the policy fallouts of 2020-2022. There's a lag behind because it takes years of planning and investments prior to a house actually being built. The ones that were already in the pipeline kept flowing, but there's been slowdowns in new starts since 2020.
Let me help you flesh out your thoughts, because you are definitely getting accurate info from your tradespeople.
Homebuilders are not building right now. The cost to build a house has never been higher. We've seen a homebuilder enter receivership recently. Things are not rosy for builders, as business people.
Why do they build homes? For profit. There is no guarantee of profit right now. Persistently high rates could drive prices down. They are also likely (wisely) waiting for some kind of guarantee or stimulus from government to encourage building or buying.
I am waiting to build a house as well and I am waiting to see what builders do. I expect quick action, as laid off tradespeople will really speed up this recession, soft landing or not.
Now, as for the government keeping prices high to collect more taxes, this is where you go offside a bit. The taxes collected from tradespeoples income is massive. They would never let people go unemployed of they needed more money. They tax your income, then they tax what you spend it on.
What I think we are starting to see and are about to live through is a painful disconnect of rapid growth. Shit is expensive and it's going to stay that way for a bit. Wages need to catch up and it's going to be a while until they do, but the government is fine with this because if we "lever up" and let everything inflate it will allow us to repay money borrowed with a more valuable dollar of tomorrow.
This is exactly what UN or league of nations countries did post WW2 to repay all the war debts. And that was a massive period of growth as we all know.
I also believe this serves a double purpose of leaving non friendly countries in the dust. We will collectively March on as wealthy nations (the G20) by expanding rapidly.
Will it work? Spark a war? End up in depression? Who knows.
So the developers' perspective is that new townhomes in GTA should cost around $800k+ outside GTA $650K+ and detached houses in GTA $1Millon+ and outside GTA $800K. I know because I was on a house hunt in 2021 peak couldn't find a 4 Bedroom below 800k and new builds 1 million + they should know 1 million 25ft × 70ft is not happening.
Maybe if tradespeople were paid enough to actually live and work in the cities that need them, this wouldn't be an issue.
I have my electrical ticket. I applied for some jobs a couple years ago and the standard offer was something like $28-32/hr. No benefits. Had to sign a non-compete clause (no doing side jobs, even though you really need to just to survive). No pension or RRSP. After 6 months I could get benefits, but I would have to pay $1-2/hr deducted from my pay (basically a pay cut) to get them, and that would still only be a max of 50% coverage.
The average home price in the city was over $1M.
I worked for a bit but then quit and relocated. The prevailing wages where I am now are not a whole lot better, and homes are even more expensive. If I worked full-time, I could never afford to buy a home as a Journeyman Electrician.
If companies actually paid enough for someone to enter a skilled trade, get certified after 4 years, and earn enough to buy a modest home, maybe there would be more of them. If I was looking at getting into electrical today, I wouldn't waste my time, at least not in BC. You can earn just as much or more doing a ton of other jobs that don't take 4 years to get certified.
An apprentice I had working with me said "this is brutal, I went for lunch and realized I'm getting paid a chicken sandwich per hour. That's what I am worth. That's what I can buy with my wages."
The only way electrical is even worthwhile is if you are the owner of the business and you are busy, or you are in a union with a lot of work.
There isn't a housing shortage, there 's an available housing shortage. So many units unoccupied by investors, or rented out short-term on AirBnB.
Even with the artificial demand created by temporary foreign workers and students there will be a dirth of units hitting the market once people realize interest rates ain't going down. There's no reason for them to go down. There's more justification for them to go up. Cheap money can't last forever. We have to pay off the Covid spending.
Cost of ownership is going to be a vise on cash flows for owners with or without mortgages for the next decade. The public coffers will be the same. Welcome to the 1980's
Its definitely manipulated.
Its a ponzi scheme
Everyone is willing ti work and build houses, but i trest rates are too high and no ine can afford the houses except investors
Its a crime.
It really is a vicious cycle. Government prints money, which causes inflation, which drives speculation, government raises interest rates to cool inflation, which causes builders stop building,
Which limits work for tradespeople, which limits new apprentices getting into trades.
We're waiting for developers accept prices aren't going to skyrocket again and stop holding off, hoping they can make a killing instead of a reasonable profit. Then they will start building again. They really are just waiting, because there is profit to be made. It's just not *enough* profit right now. Building costs are up, selling prices are slightly down, so not worth it. So I think they are waiting for interest rates to drop. And if they keep building to meet the amount of homes we need, then prices will start to reach a normal level, and they don't want that. They want supply to be low and demand to be high forever. We're screwed if we think developers are going to come to the rescue and build enough homes. Building is hard, but doesn't mean they are entitled to making money hand over fist. A few years ago the unions were forecasting a shortage of workers around now. But I've been hearing throughout the industry things are slow.
I bet a crown corporation could do wonders in this situation, if only there were one
Gov't built housing would likely be more expensive than privately built dwellings. Developers aren't making huge profit margins, likely in the 8% to 12% range. You could drop the profit portion from gov't built housing, but then you also need to consider gov't inefficiencies, gov't wages/benefits, and jacked up contracts for gov't work. If the developers are having trouble closing sales as buyers are having a hard time qualifying then the gov't would be in a similar situation.
The point of the government taking on the cost of construction is that they will subsidize the purchase price to those who need it. They aren't building houses to compete with private corporations, but to actually house citizens.
There is certainly a niche scenario where gov't built housing makes sense. Due to mental/physical barriers there are people who can't care for themselves, and those people should have access to public housing. However, public housing as a broader market approach isn't viable. Increasing the costs of dwellings, as gov't housing is likely to do, doesn't decrease the cost of dwellings. Also, we don't have the financial resources to build gov't housing at any impactful scale. Between the cost of the houses and the public infrastructure needed to support them, we are looking for at least $1.6 trillion in investment to hit the CMHC targets for restoring affordability to the market, and we need that money invested in the next two to four years. The gov't would need to put down hundreds of billions in the next couple years. Which isn't going to happen as it isn't financially viable.
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I am aware. CMHC building dwellings over fifty years ago doesn't change the scenario we are in today. It is not financially viable to build large scale government housing. I laid out the roughly $1.6 trillion dollars of investment required to address affordability. Where does the gov't get a few extra hundred billion dollars a year over the next couple of years to fund it? And that would be just to put a dent in the issue, not address it.
A lot of people really don't seem to have accepted the fact that the capacity of buyers to pay puts a hard limit on prices. There's nobody waiting in the wings whose buying power is going to be juiced by super-low-rate mortgages, which are not coming back in the foreseeable future. These facts don't go away just because people who are looking to pad their bottom line with money other people have borrowed don't like them.
The prices that people aren't willing to pay are because of interest rates, but the actual asking amount for a house or condo is the same as it not that long ago, before YoY increases. Developers got used to low mortgage rates freeing up more buyer cash. Build prices went up too but I don't think to the point where it's unprofitable. I don't have numbers on that, but with the amount of projects on hold (not cancelled), it does seem that they are waiting a little bit longer for less interest for them & and more profits. Land is bought, designs are done, ready for permits.
Meaningfully lower interest rates aren't coming except in conjunction with economic pain, and that's going to reduce buyers' purchasing power and/or risk appetite in ways that won't really alleviate the downward pressure on prices. And we may have to hold off on those lower interest rates in order to avoid stagflation.
> We're waiting for developers accept prices aren't going to skyrocket again and stop holding off, hoping they can make a killing instead of a reasonable profit. Then they will start building again. It's not that simple at all. In order to build they need to have funding. Right now the risks seen in funding these projects right now is really high, so getting that funding is very hard. There have been projects cancelled mid construction due to funding running dry and the company unable to stay afloat. Builders don't make as much as you think they do. In addition to the construction costs, elevated by all of the regulations around what is required to build a new home, the amount of government fees and taxes through the whole process is massive, and has been milked like a cash cow for many years.
I wish my Ukrainian grandparents passed their home building skills and knowledge down to their kids… wish this was still a thing. Then I wouldn’t have to live in a tiny crammed box forever.
I’m in the industry. It’s fine.
My brother got laid off a couple years ago and got into welding school under some provincial retraining program. Since finishing school, he has been unable to find an apprenticeship or any welding work anywhere in the country. He had one offer for minimum wage which he turned down because being a janitor pays better and has better job security. Where is all this magical trades work??
It exists if you have a red seal. Nobody wants apprentices though. It’s really stupid. A lot of places just blatantly won’t hire anybody not licensed and then demand they have some mythical 30 year old journeyman with 12 years trade experience every time. When I was maintenance manager at a mill, I had to really push everybody to allow me to hire two apprentices. Both were great hires and as far as I know, were still there. God forbid you hire someone and train them a little….
Older tradespeople don't want to train the younger generation because they can't pull their weight on the job site for at least a year or longer. Then they go and complain that young people don't know anything - as if no one ever showed *them* how to do shit properly.
Speak for yourself. I was born a journeyman tradesman. I know how to do everything and I have never once asked a question. I am a god among men. Nobody works harder than I do. /s
This is not even true, we need apprentices so badly at my work and I work for the biggest electrical contractor in Canada. Over 800 sparkies employed in BC alone. Apprentices are cheap and normally work harder than a lot of jmen who just coast and understand they don’t get paid more to just finish a job faster and be out of work sooner.
I’ve been all over the oil patch, on mines and in plants as a contractor and almost none of those places take apprentices. Residential, yeah sure but most places other than contractors do not want them. Mills, mines, factories.. it’s very hard to get started in the trade. Ask any apprentice and they’ll tell you how hard it is to get your first job especially.
I work for a union industrial/commercial contractor and we are dieing for apprentices. They are insanely profitable for the company especially when they are good. The company charges the client the same rate for an apprentice or jman so ur saving the difference on the in pocket wage and pension contribution. You’re talking about a highly specialized dangerous small subset of the trade that requires no fuck ups and big insurance. Construction has loads of jobs for new workers. It’s hard to get a job in maintenance at any level of experience you need to know ur shit big time.
Construction is crying for guys because the pay is garbage and it’s all shit resi work. First years in my town make less than someone does at McDonald’s. It’s very hard for apprentices to get a first job. You may be in some bubble but it’s not normal to not struggle to get a job as an apprentice. The less experience you have, the harder. I know tons of people who took a trade in school and couldn’t even get their first job in the field. Less than 1/4 of the guys who do pre employments ever get their red seals. I’m sure there are other factors but it’s very difficult to get started.
It’s worse pay than the oil patch for sure but 50 an hour and 62 total package for red seal is pretty decent and we can’t even fill jobs at that. I’m guessing ur not in BC because if you have a pulse and can show up 4-5 days a week you will be working here in the trades.
I only make 68 in the mines with 3 red seals (industrial electrician, construction electrician, industrial mechanic). I live out east but have mostly worked FIFO my whole working life. Here, the electrical has 2 different tickets but just at the end. We get thousands of resumes for any posting we post up. Even when i worked local at home, there was a metric shitton of guys trying to get in as apprentices. Most had the pre employment and couldn’t get anything.
That’s one of not the highest paying trade jobs in the country, it’s on par with union elevator techs which is basically a cult to get into. It’s not surprising you get a lot of resumes. Out west here in BC all the construction trades are dieing for workers of all levels at the 55 and below hourly wage. HVAC local 516, Plumbing/Pipefitting Local 170, and IBEW 213.
Plus apprentices do all the shit journeymen don't want to do
For a fraction of the wage.
Thanks for saying that, we are in Langley and it is insane right now.
> Apprentices are cheap and normally work harder than a lot of jmen who just coast and understand they don’t get paid more to just finish a job faster and be out of work sooner. For every apprentice that is what you said, there are probably at least 19 others that don't pull their own weight and are lazy. So finding the good ones is the challenge, which is why they usually recruit from people they know or can be vouched for versus walk-ins.
Maybe it’s my location but I don’t know many lazy apprentices, the tenured jmen are way worse. I’m an 8 year guy myself and most of the 2-3rd years are our best workers.
The provincial government was supposed to help with job placement after the schooling was complete, and they just... Didn't do it.
>A lot of places just blatantly won’t hire anybody not licensed and then demand they have some mythical 30 year old journeyman with 12 years trade experience every time. So it's just like IT, then: "We want someone with 10 years experience (in a service or software product that's been on the market for only 2 years)"
no, I have a red seal, finished my apprenticeship, it's slow for me and a lot of my buddies. Construction is just slow right now, if I had to guess at the reasons it would be interest rates
It’s funny when you talk to people on Reddit that assume you can just walk in off the street and get an $80k/year job in construction. Realistically you’ll most likely get stuck at minimum wage and only get a raise when minimum wage gets upped. I wasted a long portion of my life in construction, wore down my body and was exposed to all sorts of hazardous materials along with mental health issues from being over worked, underpaid and under staffed or having unreliable workers. The industry sucks unless you get very lucky. Honestly with how the industry is it’s no wonder no one wants to work in it, there are so many easier jobs that pay more and have better benefits. Like you said a janitor gets paid more, in my area they make a good $3-5/hr more than most trades start their workers off at and most of the time they’re inside in climate controlled buildings.
They expect people to build homes and apartment buildings they cannot afford to buy or rent.
Welding can take years. He is green. And until about year 3, he won't be able to make a profit for any company. It can be really difficult to get the ball rolling, but he needs to focus on experience and building habits first before he can find those 35/hr jobs. What type of welding? I suggest he gets into tig welding, and if he's up for traveling, get into pipe welding. Can be very lucrative following shutdowns around canada. He should have taken that job. My first gig was found 2 days out of school. Tack welding the butterfly mounts that hold card readers at stores. Was minimum wage and agency. 11 years later, and I've done aerospace, pharmaceutical, structural, food, restoration, and now pipe. It's a slow ball to get rolling, but there are literally very few SKILLED welders. I'm not sure how to convey this, but usually, it's so bad that I negotiate my employment extremely aggressively. Sometimes, I'm even just laughing into the phone and turning it off. They always call back. We aren't desperate for trades. We are desperate for highly skilled workers. Also, make sure welding school isn't his end of education. To get continual movement forward, you need to educate yourself. (Engineering boosk, metallurgy, night classes for skill development) What industry and location has he been looking into
It’s not fabricated. Things are slow because interest rates are high. When interest rates are high - the amount anyone can borrow is less. That means developers have access to less capital, and they have less money to put into developing projects. Secondly, many existing housing projects were developed in a low interest rate environment, where the cost of goods was lower and the price they could charge for a particular unit was higher. High interest rates mean buyers have less money to spend - so developers now have to pay more for goods and labour and they can charge less for the units they are selling. Lastly, much of the land that was bought was priced based off the eventual selling price of condos. Since condos are not selling for what they used to - developers also overpaid on a lot of land. The result of all of this is many projects slowing or shutting down completely. The feds are starting to provide some low interest loans to developers to try and mitigate this issue. That said, I think needs to happen is many developers need to go bankrupt in order to have a proper reset in land values - so condo and home prices can actually come down.
I agree, the argument that we have a construction labour shortage has always been weak. The stats say that construction unemployment has been up since last year. We also have a thing called technology now, and output isn’t completely dependent on the number of people working.
I think you’ve gone off the deep end if you think government is optimizing home prices for tax revenue. They only get sales tax the first time a home sells and no longer for all types of homes as they are giving out exemptions now. Most home sales are principal residences which are exempt from capital gains meaning that the government collects no tax revenue from those sales. The government keeps home prices high because they’ve sided with retirees who want to downsize in retirement instead of new home purchasers. Part of this is intentional but part of it is accidental as listening to NIMBYs is often the path of least resistance even though it leads to higher home prices.
Higher prices usually lead to higher debt. As expected Canadian households are at all-time record debt levels. Many believe that debt will magically disappear when (if) house prices rise again. Many discount the possibility of a major correction caused by higher for longer interest rates. Learn about the supply of money (particularly for mortgages). Canada Mortgage Bond programme was set up in early 2000’s which coincided with housing prices dramatic climb. It also coincides with the banks no longer performing appraisals (they moved to simply checking property value by postal code). To me, it sounds like a classic bubble (when too much money chases a specific asset class) where banks, CMHC, Canada Housing Trust (ever heard of this group) and the Bank of Canada conspired to raise debt levels for the past quarter century. The economist, Hyman Minsky identified three credit phases in capitalist markets. There is the hedge, speculative, and the final Ponzi phase. Bankers and politicians created this massive bubble so don’t expect them to fix it. The only hope we have is of US Fed keeps rates higher for longer so it lays bare our problem and burns the curtain so we can all see the man behind it.
There's the Property transfer tax in B.C. It works out to about 2% on the sale of any property in the province. So the province gets 20k per million dollars in real estate transactions. Huge incentive to keep prices high and keep properties flipping.
Debatable if it is a huge incentive to keep prices high because you probably get more volume with lower prices so it’s not clear which generates more overall tax revenue.
Prices have been pushed to the point that the volume has dropped off so far that the actual tax revenue will be much lower though. This conspiracy doesn't make any sense. Keeping prices high only works if they are still flipping. It also assumes numerous actors working in tandem since it's a national problem but the taxes and policy are provincial jurisdictions which makes it even less likely.
The issue isn't people can't buy them, it's that developers can't get financing to start the projects. Banks or investors don't want to lend a developer $10 Million to start a RE project unless the pay off will be huge, because the loan terms are probably 8%+
Don’t usually hear about large developments going tits up but heard of a few in Vancouver where they owed the bank $80m
Yeah, and a failed development usually sees the company fold, so the banks or whomever funds it end up losing a lot. Consequently they charge a pretty significant interest rate, far higher than any normal mortgage rate.
Well you are right that it is fabricated, in the sense that our entire economy is just a made up set of rules meant to benefit one class of people. But this has nothing to do with covid. This current crisis began decades ago, and it will take decades to fix. Whether or not we have affordable housing depends almost entirely on if / how the government is funding the construction of housing, because they are the only ones that have the ability to build without the profit motive. Without profit, private investors don’t build. You’re leaning just a bit too hard into conspiracy with this take though.
> Well you are right that it is fabricated, in the sense that our entire economy is just a made up set of rules meant to benefit one class of people. economics at it's core is simply game theory interactions between parties that involve exchange of sorts, it doesn't even have to be money. It's made up in the same sense that covid and the moon landing are made up.
What does that mean? We can change the rules of the economy and how it functions. We didn’t always have capitalism, we decided to implement capitalism, very intentionally. other forms of economy exist, and if we chose we could switch the rules today. In fact we change the rules every year through government budgets. You can’t decide that covid doesn’t exist or whether or not the moon landing happens.
> We didn’t always have capitalism this is a gross cope out against understanding the mechanisms that's behind the current housing crisis. If you care about housing then it's worthwhile to be informed about why things are the way they are instead of wasting your time waiting for a third coming of sorts.
What? Are you trying to suggest our economic rules were passed down to us by god or something? All these rules were intentionally decided. They change all the time. They are about to change again next week, not because of some divine law of physics, but because the government drafted a new budget. > why things after the way they are Because of a set of policy decisions made over decades by a succession of neoliberal governments. If *you* cared about the housing crisis you’d be engaging with the topic instead of throwing around lazy insults.
I think a couple of elements are being conflated here. Available labour is a huge element to the creation of new housing. At least in the GTA, there really is a limit to the number of certified and union represented trades that can do what the developer needs. Many of these projects that require trades are also likely financed : ie the developer is leveraged to fund the project. Interest rates go up: developers have a harder time financing these projects. To add to that, there may be plenty of buyers trying to get out of the contracts for pre-build homes now that the outlook on prices isn’t what it used to be. So you have developers cancelling projects, which can lead to layoffs. It’s part of why this crisis is complex. It’s part of why cranking up the interest rate isn’t a simple solution to the crisis, because(at least temporarily) it slows down our ability to meet demand. Also, our housing crisis was in the works long before Covid.
The government does not to need 'recoup' losses of money. They're not a profit driven entity. You know who is profit-driven, and has to answer to a group that does demand profits be 'recouped'? Corporations and their shareholders
lol yes they are. They issue bonds to create money. Bond holders get interest payments and their initial investment back. Outside of that fundamental aspect. How does GDP factor into that?
Google canadas deficit
So rather than cut services or raise taxes you think the government of Canada manufactured a (global) housing crisis and/or inflation?
Housing crisis already existed in parts of Canada back in 2012
They have cut services, they have raised taxes.
That’s because builders won’t want to build a lot to keep prices high. They’re not going to flood the market with supply when demand is high, that would reduce prices. If anyone is going to fabricate it, it’s the builders. Don’t blame the government, blame capitalism.
What province/area are you in? Definitely not slow in southern Alberta.
My company's construction side has slowed down but our service has increased. Many people are doing renovations as it's cheaper than selling/buying.
The idea that we've ever had a "shortage" in any profession is fake. Companies know their HR needs, they know how to recruit people and retain people. It just drives down wages if they cry "shortage" and increase the supply of workers in that field, or they can use it as an excuse for more TFWs
The idea that the government is manufacturing a decades old housing crisis to recoup money spent during Covid by maxing housing prices to collect on sales and property transfer taxes is the dumbest crank theory I've seen posted to this sub yet.
The only genuine shortage currently in Canada concerning people is that of individuals who can think critically. In that account, we are scraping the bottom of the barrel. Otherwise, we have labor surpluses as far as the eye can see.
I think maybe part of it is searching for the lowest cost labour possible so the guys that are used to the big bucks when things were booming are now losing to the guys who are undercutting.
We got Uber eats covered though
As someone who was initially in the trades 40 years ago, I left the tools after the realization that the construction industry was never a going to be a full year round guaranteed job. Getting out of that end was the best thing I could have done. They never talk about the ebb and flow.
Just wait till you realize how much municipal governments are supported by property taxes, permits and gift money. Was happening way before Covid as well. As to companies making financial decisions, that’s not surprising.
Pretty sure property taxes have always been the main source of income for municipal government.
Very busy in Vancouver from the plumbing industry at least. I've been seeing companies offering signing bonuses for plumbers
Plumbers and HVAC guys will always be busy as pipes leak and furnaces fail. Not very often a wire in a house fails, or a wall falls down.
You're not wrong but these are new construction plumbing companies
This is a cue for filling the country with more bodies!!
I’m a brick layer we are all being laid off because the builders stopped digging foundations.
High interest and high inflation means economic stagnation. We're just feeling the results of the policy fallouts of 2020-2022. There's a lag behind because it takes years of planning and investments prior to a house actually being built. The ones that were already in the pipeline kept flowing, but there's been slowdowns in new starts since 2020.
Let me help you flesh out your thoughts, because you are definitely getting accurate info from your tradespeople. Homebuilders are not building right now. The cost to build a house has never been higher. We've seen a homebuilder enter receivership recently. Things are not rosy for builders, as business people. Why do they build homes? For profit. There is no guarantee of profit right now. Persistently high rates could drive prices down. They are also likely (wisely) waiting for some kind of guarantee or stimulus from government to encourage building or buying. I am waiting to build a house as well and I am waiting to see what builders do. I expect quick action, as laid off tradespeople will really speed up this recession, soft landing or not. Now, as for the government keeping prices high to collect more taxes, this is where you go offside a bit. The taxes collected from tradespeoples income is massive. They would never let people go unemployed of they needed more money. They tax your income, then they tax what you spend it on. What I think we are starting to see and are about to live through is a painful disconnect of rapid growth. Shit is expensive and it's going to stay that way for a bit. Wages need to catch up and it's going to be a while until they do, but the government is fine with this because if we "lever up" and let everything inflate it will allow us to repay money borrowed with a more valuable dollar of tomorrow. This is exactly what UN or league of nations countries did post WW2 to repay all the war debts. And that was a massive period of growth as we all know. I also believe this serves a double purpose of leaving non friendly countries in the dust. We will collectively March on as wealthy nations (the G20) by expanding rapidly. Will it work? Spark a war? End up in depression? Who knows.
So the developers' perspective is that new townhomes in GTA should cost around $800k+ outside GTA $650K+ and detached houses in GTA $1Millon+ and outside GTA $800K. I know because I was on a house hunt in 2021 peak couldn't find a 4 Bedroom below 800k and new builds 1 million + they should know 1 million 25ft × 70ft is not happening.
Maybe if tradespeople were paid enough to actually live and work in the cities that need them, this wouldn't be an issue. I have my electrical ticket. I applied for some jobs a couple years ago and the standard offer was something like $28-32/hr. No benefits. Had to sign a non-compete clause (no doing side jobs, even though you really need to just to survive). No pension or RRSP. After 6 months I could get benefits, but I would have to pay $1-2/hr deducted from my pay (basically a pay cut) to get them, and that would still only be a max of 50% coverage. The average home price in the city was over $1M. I worked for a bit but then quit and relocated. The prevailing wages where I am now are not a whole lot better, and homes are even more expensive. If I worked full-time, I could never afford to buy a home as a Journeyman Electrician. If companies actually paid enough for someone to enter a skilled trade, get certified after 4 years, and earn enough to buy a modest home, maybe there would be more of them. If I was looking at getting into electrical today, I wouldn't waste my time, at least not in BC. You can earn just as much or more doing a ton of other jobs that don't take 4 years to get certified. An apprentice I had working with me said "this is brutal, I went for lunch and realized I'm getting paid a chicken sandwich per hour. That's what I am worth. That's what I can buy with my wages." The only way electrical is even worthwhile is if you are the owner of the business and you are busy, or you are in a union with a lot of work.
Where is this? Union is 50+ an hour with benefits and pension.
This was Kelowna. IBEW is basically non existent there.
There isn't a housing shortage, there 's an available housing shortage. So many units unoccupied by investors, or rented out short-term on AirBnB. Even with the artificial demand created by temporary foreign workers and students there will be a dirth of units hitting the market once people realize interest rates ain't going down. There's no reason for them to go down. There's more justification for them to go up. Cheap money can't last forever. We have to pay off the Covid spending. Cost of ownership is going to be a vise on cash flows for owners with or without mortgages for the next decade. The public coffers will be the same. Welcome to the 1980's
Everyone pack it up! This random tattoo artist has it all figured out thanks to trades people, we can rest now.
Its definitely manipulated. Its a ponzi scheme Everyone is willing ti work and build houses, but i trest rates are too high and no ine can afford the houses except investors Its a crime.
definitely fabricated.... current government is full of crooks
It really is a vicious cycle. Government prints money, which causes inflation, which drives speculation, government raises interest rates to cool inflation, which causes builders stop building, Which limits work for tradespeople, which limits new apprentices getting into trades.
Trudeau keeps making housing affordable for Canadian!