This isn’t just some overvalued tulip in need of a correction. People need homes and can’t afford to exit the housing market entirely. If people can’t afford housing, that means they can’t really afford anything. Expect the economy to have collapsed. Wages and employment will be down. Home ownership will decline.
Only those with capital to ride out a bumpy economy will be able to snatch up the cheap housing.
The solution to our housing crisis is not to tank the economy. The solution is to tackle the supply of housing, income inequality, and corporate equity in residential real estate.
The current economic state isn’t exactly great for the average person either. Especially young people trying to start careers and leave their parent’s house.
Regular people already can’t afford housing. Almost anyone owning a house is a millionaire, or has borrowed a million from the bank as a mortgage.
The former will survive just fine. The latter took a tremendous risk by borrowing a million dollars to buy properly in an overheated market. If it works out then they can enjoy the fruits of their high risk play. If it doesn’t work out, then they should suffer the consequences. That’s how all risks work.
If the housing bubble bursts regular people won’t have a job to buy a house. So much better 👍
I’m very very far from a millionaire and I’m an owner, it’s the same thing for the vast majority of home owners in Canada.
Heck, our cottage was for sale for months before we bought it for 50k, I’ve now sold my condo for a price low enough that with 10k you could have bought it including all the paperwork (and I still had trouble selling it!) and I’m looking to buy a house for about 250k close enough to the city that I can still commute and I still have multiple choices… And I’m not talking about bum fuck nowhere, it’s a city of over 200k with two hospitals and two universities!
Maybe people should start moving outside of Montreal, Toronto, Ottawa, Vancouver… but what do I know? Oh, that’s right, that you’re quick to point the finger and say home owners should deal with the consequences of their choices, but you are unable to point to others who absolutely want to live in the most expensive parts of the country and complain that they’ll never be able to afford anything while housing in more rural location just doesn’t sell.
I talk to a lot of people wanting to buy their first house and all of them want at least a bungalow, none of them even wants to consider that buying a condo or even a semi detached to start might be a good option… So what do they do? They continue living at their parents’ or in an apartment and complain.
Imma burst your bubble. Home ownership in cities is an anomaly in our history, it became prevalent after WW2 and scarcity of urban land means it’s not sustainable to expect to see the population increase and have everyone become an owner.
You think people are able to live if they lose their job because the whole economy crashes?
The only housing I own is a 3 season cottage that we paid 50k back in 2020 at the peak of demand for cottages (that gives you an idea how much of a piece of shit we bought), I don’t have too much to lose, I just realize the consequences of the bubble bursting and these consequences will most definitely hurt those who are already suffering a lot more than the status quo.
Finance is not the economy. And housing should not be a free market. That’s the whole problem with it today. When you make housing a finance product, you get what we have today. It’s fucked up and it needs to be collapsed and redone.
Agreed. We should regulate it. First, we should zone areas of land as only being for certain types of homes. This will ensure that the detached mansion you always dreamed of will not be usurped by some developer wanting to build condos. Next, we should regulate the structures so that someone doesn’t try to build a small/tiny home where you want your glorious mansion. Third, we enforce only one structure per property. Your mansion needs a sizeable backyard for your pool! I have more ideas, but think that’s a good start.
I’ll be the first to vote in favor of a non profit crown corporation taking control over anything that has more than 6 units and to require being registered as a company to own 4 to 6 units!
Not the same at all. The previous housing bubble was a result of widespread fraud by the banks. Now, people know very well to look out for that exact thing happening, and it isn’t.
If there is a bubble right now, which there probably is, it is a speculative bubble. People believe that housing will forever quickly grow in price, so they are willing to pay above reasonable price to not miss out on the opportunity. Which in turn increases the prices further. It’s a self-sustaining cycle, but at some point there won’t be enough capital to sustain it any longer. Can happen in a year, can happen in a decade, can happen tomorrow.
Yes, I am ready for that. I don’t buy this “but the economy” line. It smacks of “too big to fail”, and I think that occasional failure is necessary and healthy.
You haven’t lived through enough cycles then… Even 2008 saw a million people in Canada lose their jobs. The one in the early 90s was probably double that.
Besides, nobody understands what the real numbers would even be. Do you know how much of an implosion is required to return Vancouver or Toronto to “affordable” levels? Prices would need to drop something around 80-85%. That’s absolutely massive, and would wipe out the life savings of 10 million Canadians, who are now going to need more government support to make it through retirement.
There are ways to fix this problem, but they need to be gradual to not end up causing more problems than they fix.
The riskier mortgages are guaranteed by the government, that means everyone pays if people stop paying their mortgage.
Retirement for most owners without a pension fund depends on being able to sell their property, that’s also something the whole country would end up paying for through safety nets.
If prices crash that means even more easy to snatch properties for the richest, so even less supply.
The housing bubble bursting would lead to the same social crisis they had to go through in the USA, wishing for it to burst is wishing for people to die, more than are now because of the bubble.
The housing situation in the USA and in Canada are different though. You would be shifting the cost from those able to snatch the good deals while the crash happens to the whole population having to pay back banks through increased taxes over decades.
Don’t forget all the job losses that come with that, can’t buy a cheap house if you don’t even have a job!
You think you could tax the rich enough to compensate for the insurance on… $400B worth now insured by the CMHC…
Good luck refunding this without impacting everyone in the long term and good luck not getting all those houses in the hands of those who already have a fortune to buy them!
Remember 2008 in the USA? The people who ended up getting their hand on the cheap houses were those that already had a stack, including foreign investors, regular folks came out of that worse off because they lost their house and couldn’t afford to buy another one, in the end you just increase the number of people in the market for cheap housing! 👍
Insurance can collapse and their owners die in an alley. The mistake in 2008 was to save their asses. In early xxth century they would have. Now we pay them billions so they would have the courtesy to retire.
Also congratulations on discovering about how fucked up a free market is for things people need to live. Housing should not be a market.
Dude, that insurance is US! The government insures mortgages with less than 20% in downpayment because banks don’t want to loan money for mortgages because they don’t want to deal with repossession and having to sell them!
You don’t care about selling houses. Their purpose is to shelter people, not to be sold on a market.
The sooner the market crash to oblivion, the sooner people can actually live there. A government has the power to say no to bank and insurance shitters. You don’t actually have to pay them your right to live. The society doesn’t have to comply to every desire of these shitlords.
Yes, the economy would collapse. That would be for the best if you take care of the things that actually mater : house and food.
But I have no illusion about this kind of event happening in America. You guys are too hard into the free market and your capitalist overlords.
It is a free market though, it’s even advantageous to people who don’t have that much money because they can still get a mortgage without a huge downpayment. Back before CMHC mortgages were private loans, the previous owner would be the one financing the new owner at whatever rate they felt was appropriate and at whatever downpayment they felt was appropriate. Today you need 5% and if your credit score is good enough then the bank can’t say no.
But you wouldn’t know that because you’re in Europe and you’re here talking about the Canadian housing market like you had any idea how it works.
So you’re telling me there are no problem of housing in Canada and no one is poor or dying because of it? But then why are we even talking if housing problems are unknown in your country?
Sorry, but depending on location prices bounced back and surpassed pre-crisis levels within few years in US. Same issue that many already highlighted - folks lost their houses during crisis to the ones who can afford it but they still need place to live. Population grows and so are the real estate prices. Investment firms are busy buying up properties and oh boy will they go wild this time, now that this turned into a very targeted industry. So those prices going down only means some people will lose their homes, others their jobs and corporate investors will gain big time. Selected few with sufficient financial cushion will weather it out and the cycle will repeat itself… because nobody builds housing to keep up with the pace of population growth. With a caveat: some rural areas are still underappreciated and if housing is what you seek - go rural, mind you job selection might be limites if any… so gotta be financially independent… oh guess what? Another pass for the average folk. So yeah… new construction is the only way out of it. Bursting the bubble will hurt folks below median a lot more than status quo. (mind you escalation of institutional investors activity would be as tragic as bursting the bubble).
A crash isn’t a bad thing if you can build a firewall against profiteering. Governments could buy property, instead of allowing the wealthy to, and governments could force the rich to take a haircut and/or tax the hell out them and then spend our way out of recession.
It won’t happen, but it isn’t impossible or even improbable.
I’m ready for it to pop and the consequences thereof. I know I will have to shoulder some of the burden. Too bad that businesses love to privatize gains and nationalize risks, but that’s the mess we’re in.
To copy another of my comments, I don’t buy this “but the economy” line. It smacks of “too big to fail”, and I think that occasional failure is necessary and healthy.
We’re taking millions of jobs just disappearing, people’s savings gone, most banks going bankrupt…
I know it’s hard to imagine, but the housing bubble can’t burst in a vacuum and in our country it’s taking everything with it and could mean decades to come back to some form of normalcy.
Heck, you would probably not get to enjoy the potential drop in price because you would have had to move to another country to find a job, just like the Quebecois had to do at the beginning of last century.
Same. Burn it all down. I’m tired of paying my landlord the equivalent of a mortgage for fuck all security because I don’t have enough for a downpayment.
If you’re unable to save money for a downpayment while paying the equivalent of a mortgage then you’re not ready to own.
You guys believe you just buy a house and that’s it, you know how much you’re paying every month and it will be the same for the next 25 years or something? Freaking hell, some of you are in for a big surprise the first time a pipe bursts and you need to pay to redo a bathroom!
That’s ridiculous. I do put money away. The problem is that the size of downpayment needed is growing way faster than I could hope to save. How often do these adverse affects actually happen? Once or twice? You can also DIY.
Other things you can reliably budget for, new roof is every 20 years, maybe new appliances every 10 years. General upkeep? Renters do that already but you can DIY and you have a say in what happens.
Your argument is basically if you can’t save for a home while already paying for a home you can’t afford a home.
A downpayment is 5% minimum, you’re unable to save 15k to 20k to buy a house because you’re paying the equivalent of a mortgage? Then sorry bud, you just don’t have the finances to own, it’s that’s simple. I do everything myself and a bathroom still costs thousands to renovate when it’s not an emergency, if you need to redo everything? Add a couple thousands again.
Your argument is basically if you can’t save for a home while already paying for a home you can’t afford a home.
More like if you can’t save for a house while already paying for a house you won’t be able to maintain a house.
That’s ridiculous. I do put money away. The problem is that the size of downpayment needed is growing way faster than I could hope to save. How often do these adverse affects actually happen? Once or twice? You can also DIY.
Other things you can reliably budget for, new roof is every 20 years, maybe new appliances every 10 years. General upkeep? Renters do that already but you can DIY and you have a say in what happens.
Your argument is basically if you can’t save for a home while already paying for a home you can’t afford a home.
I’m ready for this bubble to pop.
The last time a housing bubble popped, so did the entire economy.
You sure you’re ready for that?
One hundred percent.
This isn’t just some overvalued tulip in need of a correction. People need homes and can’t afford to exit the housing market entirely. If people can’t afford housing, that means they can’t really afford anything. Expect the economy to have collapsed. Wages and employment will be down. Home ownership will decline.
Only those with capital to ride out a bumpy economy will be able to snatch up the cheap housing.
The solution to our housing crisis is not to tank the economy. The solution is to tackle the supply of housing, income inequality, and corporate equity in residential real estate.
Ok, so you’re not ready for the bubble to pop then.
No one is ready for a depression. We need it tho. We can’t keep doing this.
It’s either depression or severe dystopia. Pick one.
The longer we put it off, the worse its going to be
Ok but I am
I don’t think you realise the consequences on regular people.
The current economic state isn’t exactly great for the average person either. Especially young people trying to start careers and leave their parent’s house.
Much better than not having a place to live because businesses are closing and unemployment is through the roof and you don’t have a job.
Regular people already can’t afford housing. Almost anyone owning a house is a millionaire, or has borrowed a million from the bank as a mortgage.
The former will survive just fine. The latter took a tremendous risk by borrowing a million dollars to buy properly in an overheated market. If it works out then they can enjoy the fruits of their high risk play. If it doesn’t work out, then they should suffer the consequences. That’s how all risks work.
If the housing bubble bursts regular people won’t have a job to buy a house. So much better 👍
I’m very very far from a millionaire and I’m an owner, it’s the same thing for the vast majority of home owners in Canada.
Heck, our cottage was for sale for months before we bought it for 50k, I’ve now sold my condo for a price low enough that with 10k you could have bought it including all the paperwork (and I still had trouble selling it!) and I’m looking to buy a house for about 250k close enough to the city that I can still commute and I still have multiple choices… And I’m not talking about bum fuck nowhere, it’s a city of over 200k with two hospitals and two universities!
Maybe people should start moving outside of Montreal, Toronto, Ottawa, Vancouver… but what do I know? Oh, that’s right, that you’re quick to point the finger and say home owners should deal with the consequences of their choices, but you are unable to point to others who absolutely want to live in the most expensive parts of the country and complain that they’ll never be able to afford anything while housing in more rural location just doesn’t sell.
I talk to a lot of people wanting to buy their first house and all of them want at least a bungalow, none of them even wants to consider that buying a condo or even a semi detached to start might be a good option… So what do they do? They continue living at their parents’ or in an apartment and complain.
Imma burst your bubble. Home ownership in cities is an anomaly in our history, it became prevalent after WW2 and scarcity of urban land means it’s not sustainable to expect to see the population increase and have everyone become an owner.
I’m starting to think you have too much to lose to care for people not being able to live because houses are too expensive.
You think people are able to live if they lose their job because the whole economy crashes?
The only housing I own is a 3 season cottage that we paid 50k back in 2020 at the peak of demand for cottages (that gives you an idea how much of a piece of shit we bought), I don’t have too much to lose, I just realize the consequences of the bubble bursting and these consequences will most definitely hurt those who are already suffering a lot more than the status quo.
Finance is not the economy. And housing should not be a free market. That’s the whole problem with it today. When you make housing a finance product, you get what we have today. It’s fucked up and it needs to be collapsed and redone.
Agreed. We should regulate it. First, we should zone areas of land as only being for certain types of homes. This will ensure that the detached mansion you always dreamed of will not be usurped by some developer wanting to build condos. Next, we should regulate the structures so that someone doesn’t try to build a small/tiny home where you want your glorious mansion. Third, we enforce only one structure per property. Your mansion needs a sizeable backyard for your pool! I have more ideas, but think that’s a good start.
Oh wait.
I’ll be the first to vote in favor of a non profit crown corporation taking control over anything that has more than 6 units and to require being registered as a company to own 4 to 6 units!
Not the same at all. The previous housing bubble was a result of widespread fraud by the banks. Now, people know very well to look out for that exact thing happening, and it isn’t.
If there is a bubble right now, which there probably is, it is a speculative bubble. People believe that housing will forever quickly grow in price, so they are willing to pay above reasonable price to not miss out on the opportunity. Which in turn increases the prices further. It’s a self-sustaining cycle, but at some point there won’t be enough capital to sustain it any longer. Can happen in a year, can happen in a decade, can happen tomorrow.
Yes, I am ready for that. I don’t buy this “but the economy” line. It smacks of “too big to fail”, and I think that occasional failure is necessary and healthy.
You haven’t lived through enough cycles then… Even 2008 saw a million people in Canada lose their jobs. The one in the early 90s was probably double that.
Besides, nobody understands what the real numbers would even be. Do you know how much of an implosion is required to return Vancouver or Toronto to “affordable” levels? Prices would need to drop something around 80-85%. That’s absolutely massive, and would wipe out the life savings of 10 million Canadians, who are now going to need more government support to make it through retirement.
There are ways to fix this problem, but they need to be gradual to not end up causing more problems than they fix.
You’re saying this but no you’re not.
The riskier mortgages are guaranteed by the government, that means everyone pays if people stop paying their mortgage.
Retirement for most owners without a pension fund depends on being able to sell their property, that’s also something the whole country would end up paying for through safety nets.
If prices crash that means even more easy to snatch properties for the richest, so even less supply.
The housing bubble bursting would lead to the same social crisis they had to go through in the USA, wishing for it to burst is wishing for people to die, more than are now because of the bubble.
Except in the US it brought prices back down to “normal” levels. Their were still expensive but they remained more affordable than here.
The housing situation in the USA and in Canada are different though. You would be shifting the cost from those able to snatch the good deals while the crash happens to the whole population having to pay back banks through increased taxes over decades.
Don’t forget all the job losses that come with that, can’t buy a cheap house if you don’t even have a job!
Government decides who pay taxes. Shitty governments decide everyone pays the same. Good government redistribute.
In the early 20th century people responsible for crisis, bubbles and stuff were severly punished. It can be done.
Also, you should get familiar with the story of the boiling frog. Wishing things won’t get worse will only get you dead eventually.
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Every damned time. Replace ‘lap’ with ‘counter’ and ‘notice her’ with ‘stop her from knocking something off’ #ragdoll
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TIL how to poach brains
Our housing market as a whole is worth 6.1T
You think you could tax the rich enough to compensate for the insurance on… $400B worth now insured by the CMHC…
Good luck refunding this without impacting everyone in the long term and good luck not getting all those houses in the hands of those who already have a fortune to buy them!
Remember 2008 in the USA? The people who ended up getting their hand on the cheap houses were those that already had a stack, including foreign investors, regular folks came out of that worse off because they lost their house and couldn’t afford to buy another one, in the end you just increase the number of people in the market for cheap housing! 👍
Insurance can collapse and their owners die in an alley. The mistake in 2008 was to save their asses. In early xxth century they would have. Now we pay them billions so they would have the courtesy to retire.
Also congratulations on discovering about how fucked up a free market is for things people need to live. Housing should not be a market.
Dude, that insurance is US! The government insures mortgages with less than 20% in downpayment because banks don’t want to loan money for mortgages because they don’t want to deal with repossession and having to sell them!
You don’t care about selling houses. Their purpose is to shelter people, not to be sold on a market.
The sooner the market crash to oblivion, the sooner people can actually live there. A government has the power to say no to bank and insurance shitters. You don’t actually have to pay them your right to live. The society doesn’t have to comply to every desire of these shitlords.
Yes, the economy would collapse. That would be for the best if you take care of the things that actually mater : house and food.
But I have no illusion about this kind of event happening in America. You guys are too hard into the free market and your capitalist overlords.
You can’t buy a house if it’s not a free market. That’s the whole point.
It is a free market though, it’s even advantageous to people who don’t have that much money because they can still get a mortgage without a huge downpayment. Back before CMHC mortgages were private loans, the previous owner would be the one financing the new owner at whatever rate they felt was appropriate and at whatever downpayment they felt was appropriate. Today you need 5% and if your credit score is good enough then the bank can’t say no.
But you wouldn’t know that because you’re in Europe and you’re here talking about the Canadian housing market like you had any idea how it works.
So you’re telling me there are no problem of housing in Canada and no one is poor or dying because of it? But then why are we even talking if housing problems are unknown in your country?
They remained more affordable, for a time. And then housing prices went right back through the roof.
I bought a foreclosed house in 2012 for ~280k. It had been purchased by the previous owner for about 480k.
I put about 150k into it, 100k the first year to make it a liveable property, and 50k or so over the next ten years.
I sold it last year for about 850k…
I then bought a new house that cost about 450k when it was built 4 years ago, for about 680k, in a less expensive market.
Sorry, but depending on location prices bounced back and surpassed pre-crisis levels within few years in US. Same issue that many already highlighted - folks lost their houses during crisis to the ones who can afford it but they still need place to live. Population grows and so are the real estate prices. Investment firms are busy buying up properties and oh boy will they go wild this time, now that this turned into a very targeted industry. So those prices going down only means some people will lose their homes, others their jobs and corporate investors will gain big time. Selected few with sufficient financial cushion will weather it out and the cycle will repeat itself… because nobody builds housing to keep up with the pace of population growth. With a caveat: some rural areas are still underappreciated and if housing is what you seek - go rural, mind you job selection might be limites if any… so gotta be financially independent… oh guess what? Another pass for the average folk. So yeah… new construction is the only way out of it. Bursting the bubble will hurt folks below median a lot more than status quo. (mind you escalation of institutional investors activity would be as tragic as bursting the bubble).
We really have to be taxing the hell out of the rich like we did in the “make Canada great again” days, if we want a cushion for this crash.
Yeah, this.
A crash isn’t a bad thing if you can build a firewall against profiteering. Governments could buy property, instead of allowing the wealthy to, and governments could force the rich to take a haircut and/or tax the hell out them and then spend our way out of recession.
It won’t happen, but it isn’t impossible or even improbable.
I’m ready for it to pop and the consequences thereof. I know I will have to shoulder some of the burden. Too bad that businesses love to privatize gains and nationalize risks, but that’s the mess we’re in.
To copy another of my comments, I don’t buy this “but the economy” line. It smacks of “too big to fail”, and I think that occasional failure is necessary and healthy.
We’re not talking a dip in the stock market.
We’re taking millions of jobs just disappearing, people’s savings gone, most banks going bankrupt…
I know it’s hard to imagine, but the housing bubble can’t burst in a vacuum and in our country it’s taking everything with it and could mean decades to come back to some form of normalcy.
Heck, you would probably not get to enjoy the potential drop in price because you would have had to move to another country to find a job, just like the Quebecois had to do at the beginning of last century.
Same. Burn it all down. I’m tired of paying my landlord the equivalent of a mortgage for fuck all security because I don’t have enough for a downpayment.
If you’re unable to save money for a downpayment while paying the equivalent of a mortgage then you’re not ready to own.
You guys believe you just buy a house and that’s it, you know how much you’re paying every month and it will be the same for the next 25 years or something? Freaking hell, some of you are in for a big surprise the first time a pipe bursts and you need to pay to redo a bathroom!
That’s ridiculous. I do put money away. The problem is that the size of downpayment needed is growing way faster than I could hope to save. How often do these adverse affects actually happen? Once or twice? You can also DIY.
Other things you can reliably budget for, new roof is every 20 years, maybe new appliances every 10 years. General upkeep? Renters do that already but you can DIY and you have a say in what happens.
Your argument is basically if you can’t save for a home while already paying for a home you can’t afford a home.
A downpayment is 5% minimum, you’re unable to save 15k to 20k to buy a house because you’re paying the equivalent of a mortgage? Then sorry bud, you just don’t have the finances to own, it’s that’s simple. I do everything myself and a bathroom still costs thousands to renovate when it’s not an emergency, if you need to redo everything? Add a couple thousands again.
Your argument is basically if you can’t save for a home while already paying for a home you can’t afford a home.More like if you can’t save for a house while already paying for a house you won’t be able to maintain a house.
That’s ridiculous. I do put money away. The problem is that the size of downpayment needed is growing way faster than I could hope to save. How often do these adverse affects actually happen? Once or twice? You can also DIY.
Other things you can reliably budget for, new roof is every 20 years, maybe new appliances every 10 years. General upkeep? Renters do that already but you can DIY and you have a say in what happens.
Your argument is basically if you can’t save for a home while already paying for a home you can’t afford a home.