Jared A. Brock- Canada’s Real Estate Market is a Giant Pyramid Scheme
The northern frauds are about to lose all of their smart young people
Millions of Canadian homeowners are now millionaires. To be clear, they didn’t actually earn this money. They just bought a house three to ten years ago, and are now watching their net worths skyrocket by robbing the poorest people in society via engineered inflation.
It’s not their fault, of course, but let’s be honest: They’re also not voting for parties and politicians who would reset the market to sanity and implement long-term affordable homeownership.
That would crush their unearned net worths.
They’re also not voting for parties and politicians who would reset the market to sanity and implement long-term affordable homeownership.”
Absolutely, positively, spot on. And therein lies the problem.
Is it? Let’s face it, the millenials and Gen X types ARE voting for the Status Quo. They vote for Blackie and Meethead, despite them not working for their interests, just giving them lip service to their affordability issues.
Real Interest rates should have been normalized several years ago, and I’ve voted for that, but it hasn’t happened. Yes, I’m a homeowner, sitting on a currently valued million plus home. But, it’s all relative, if I sell, I buy back into the same market.
I have to live somewhere, right?
There are those that cash out and downsize, but, sometimes, it doesn’t work as one wants. Cashing out, for your retirement fund, can mean downsizing to a condo (ugh), and I know a few examples of that type of retirement planning.
If rates normalized today, as we see rumblings of a possibility, the side effects would be a crash in the equity markets, along with house markets. We can thank government for not acting much earlier than they did. And now we all face 2 pyhrric choices, an economic crash, or, continued rampant inflation. Nice.
This article would be more effective with more facts and argument, and less cherry-picked data and hyperbole.
Agree. Useless article. Interest rates are returning to their normal 20 year average. This will drive housing costs down considerably and back to their normal level. That’s it. It’s not complicated. All the anxiety and over analysis is just click bait
Useless, yes… but it’s supply & demand that keep urban house prices high.
Lack of construction, zoning, high material costs, increasing urban population, inflation, geography all contribute to higher house prices.
Want a cheaper house? Move to a rural area.
Really? Mom and dad’s house sold for 100,000 5 years ago, last month sold for 500,000. 100 year old house more than livable, on a double lot. Village of 400, 45 minutes from any city.
Your only rich if you own it.
People totally forgot about 2008 and how many Americans where underwater.
We missed our turn – it’s coming.
I know lots of good hardworking kids in their late twenties- they work their asses off but they are smart enough to say that’s not worth it, and it isn’t. When it comes to overpriced housing. But they deserve an honest shot at a home, and to be honest I hope the bottom falls out of the market.
Our busiest years where the last two, during a Pandemic, one guy spent 178,000 just on his suburban London backyard.
Cash or line of credit ?
We will see.
Higher interest rates reduce demand. Simple.
In 2020, my wife and I sold our house in Canada for twice what we paid for it 10 years earlier and moved to central Mexico. Despite our new area being expensive by Mexican standards due to the number of expats living here, we bought a stunning house twice the size of the previous one in Canada with a jaw-dropping view of the lake and surrounding mountains. It cost half what we sold the Canadian house for and less than one-quarter of what it would sell for anywhere in the GTA. The only downside is that, if we had kept it for another year, we would have tripled our investment on it rather than just doubling it. In my view, the Canadian market is completely unhinged.
How’s that for facts and argument?
The only pol and party I see who would return us to sanity is Max and the PPC.
The CPC are excluded because they are of course, the blue-tie wing of the Uniparty. The red/orange wing is the other half of that corrupt vulture.
And then there’s the aspect of provincial government assessments used primarily for jacking up property taxes.
The house I inherited was appraised at just under a quarter million dollars and it looks like it. The B. C. government insists that houses “similar” to it are worth much more than that and, a few years ago, it was considered to be well over $300,000. I called B. C. Assessment and told them they were nuts, explaining my situation.
As an act of apparent generosity, that office knocked off $20,000. Whoopeedoo!
I’m about to sell my house for the appraised value. To ask for more would be unrealistic and dishonest and the buyer agreed with my reasoning. My elderly aunt reminded me that I might get a lot of people mad at me because by selling it for that price, I’ll drive down the prices of the houses in the immediate neighbourhood.
Sheesh! On the one hand, people want high house prices simply for bragging rights, but give them a reason and opportunity to pay less property tax and I’m sure somebody would want to skin me.
No argument with your pov, but the reality is that regardless of the state of the structure on the property, currently in the high priced areas of BC at least, it’s the land value that’s the big number. Cost of construction for renos and new construction isn’t helping either.
I believe it’s currently around $300/sq. ft.
I’m looking at my Assessment for this year;
Land: $482K
Buildings: $226K
The house alone is 2,000 sq.ft…ie at $300/sq ft. it’s replacement cost (fire for example) would be at least $650K
That would bring the property value up to $1.1M+/-
Dan
And the Turd, supported by Jagmeet, will want to tax the value of your house.
To make the rich pay.
Interest rates are rising in western nations as the world’s primary central banks cease enlarging their balance sheets. As the artificially depressed rates disappear, the inevitable normalization of markets must proceed. The bubbles in bonds and equities are deflating. Soon housing too.
People do not NEED stocks and bonds, but they do NEED housing.
We are too far behind to catch up to demand in the near term, so don’t expect to see housing prices drop in any substantial way.
Uh huh.
https://www.google.com/amp/s/beta.ctvnews.ca/national/business/real-estate/2022/5/18/1_5908296.amp.html
This guy is just a dick
Your house is only worth as much as someone who is willing to pay for it.
Exactly…same for anything.
What you are about to observe in Canada’s housing market is what happens when you run out of cheap Chinese credit.
In the best case scenario.
As for the worst… let’s say that the effects of a direct nuclear strike on Toronto won’t do much for your home equity.
TWAT
the stupid strikes again. Many Chinese, ans Indian buyers are doing so with cash, so credit has nothing to do with it.
Speak for yourself. This long-time homeowner will vote for anything BUT the Liberal/NDP axis of evil. Will I take a financial hit personally? Yep. Will it be WAY better for the country? You damn betcha. I can always earn more money. Here’s hoping Poilievre can get elected PM.
How did this guy arrive at the conclusion that Canada is “a hyper-individualist anti-society”? If anything, we are hyper-collectivist, which is why entrepreneurial thinkers move elsewhere to succeed.
That was my thought too. I agree with the idea that it’s becoming a fool’s errand to find affordable housing here. I have two friends who moved to South Dakota for their kids benefit.
But “hyper-individualist anti-society”? That’s nonsense
Sounds like Francisco is a tad bitter about not being in on the unearned millions in the housing market.
I am a beneficiary of the housing boom, but it took risks and a lot oh hard work to achieve it.
The layers of snow-balling taxation on ‘all things housing’ is the biggest cause of housing costs rising through the roof. … the shortage of affordable housing for the commoners is the other. Planning ahead to avoid situations like this one is totally in the purview of government.
In both cases it is the government, at all levels who are to blame …. But with advice from the WEF and the payoffs … well … what’s a corrupt politician to do?
I always vote conservative in the hope of sanity, meanwhile I will take the money.
I read his article on how to “solve” the housing crisis. In a nutshell, he advocates central planning, even going so far as to advocate something like a UBI. He advocates price controls for housing, by tying housing prices to income. Chronic shortages, anyone?
“I’d personally ban all for-profit land-lording, but Canadians are far too conservative to ever pass such a commons-improving law.”
Commons improving? More like society destroying. The guy’s a socialist. He’s not on our side. Not by a long shot.
BC tried that, back in BC’s Dave Barrett~NDP government (correct me if I’m wrong?) era…BC’s first experience with Socialism(?).
They brought in rent control, and basically told investors NOT to put their money into rental housing. That and the Federal Gov’t’s changing Tax law to prevent professionals from using rental housing expenses (investments) as a write down against their professional income pretty much killed new rental construction. Investment money now flowed into condo construction and spurred the land rush for those condo projects.
In BC at least, Expo ’86 poured gas on the fire. Huge building boom in the Lower Mainland…condos of course.
BC tried that, back in BC’s Dave Barrett~NDP government (correct me if I’m wrong?) era…BC’s first experience with Socialism(?).
Yup. It’s 50 years ago this coming September that B. C. took leave of its senses and elected the “Little Fat Dave” Dippers. Among the “blessings” they bestowed on the province are ICBC as well as land banks (one couldn’t buy land, but rent it for specific time periods).
The province was never the same after that.
Most of his writing credits in his mini-bio are for leftist sources. And such concern for the “workers”. :^(
We have a small hobby farm valued between 2and3 mil.
We could buy a nice place in Panama or Belize or Portugal where English is spoken(although not the first language)for between 100 and 500 thou)
Being 79 health insurance is substantial at about 3000 per month but affordable given the lower cost of living.
At the rate of decline in Canada I’m seriously considering it. Loss of free speechWHO new mandates,unrealized CApital gains tax. Etc etc. No mandates which is important as both wife and I had serious reactions to the jab and will not be getting any more. Daughter is unvaxed so will probably join us( providing she can get out of the country thanks to the turd )