Average Canadian house price rose to $716,000 in April — up by $100K since January

[impartialobserver]

5 minutes ago, CdnFox said:

Well, recession maybe.  Depression might be stretching it - but then again there's no really solid definition so many economists might well agree with you.

You are correct. There is no consensus definition of what a depression is among economists.. I know, I am one of them. 

Edited May 15, 2023 by impartialobserver

[Dougie93]

Just now, CdnFox said:

Well, recession maybe.  Depression might be stretching it - but then again there's no really solid definition so many economists might well agree with you.

a recession is just two quarters of negative growth

if you don't want to call it a depression

we could call it a secular bear market of historic proportions

not that you can't profit in a secular bear market

if you bought your home before the prices went straight up in 2019

so your mortgage is manageable

that mortgage is shrinking at double digits by inflation alone

and you are still enjoying historically low rates

all you need to be able to do is afford the gas, and the food

then you are laughing

so its like Boomers & Xers are laughing

while Millennials & Zoomers are shut out

[Dougie93]

17 minutes ago, impartialobserver said:

You are correct. There is no consensus definition of what a depression is among economists.. I know, I am one of them. 

the massive easing,  both monetary & fiscal,  masks it

the depression is like an iceberg below that liquidity ocean

you can only see the tips

like labour participation rates for males is Great Depression numbers right now

rates for eviction into homelessness, Depression era rates

the tent cities are all around us

[impartialobserver]

Just now, Dougie93 said:

the massive easing,  both monetary & fiscal,  masks it

the depression is like an iceberg below that liquidity ocean

you can only see the tips

like labour participation rates for males is Great Depression numbers right now

rates for eviction into homelessness, Depression era rates

the tent cities are all around us

That is not the point. The point is that there is no standard definition of "depression" amongst economists. 

[Dougie93]

3 minutes ago, impartialobserver said:

That is not the point. The point is that there is no standard definition of "depression" amongst economists. 

so then economists agree, we can call it a depression if we choose to

[impartialobserver]

6 minutes ago, Dougie93 said:

so then economists agree, we can call it a depression if we choose to

Yes. Recession has a simple quantitative defintion. Depression, not so. 

[Dougie93]

Just now, impartialobserver said:

Yes. Recession has a simple quantitative defintion. Depression, not so. 

I prefer the phrase deflationary spiral anyways

the debt & easing masks a global deflation

what is sold as a Bull is actually a Bear is sheep's clothing

[herbie]

4 hours ago, myata said:

The mindless ride is bound to end somewhere. The entropy will take care of this.

They've been saying that in Vancouver since the 1970s. Didb't stop us buying our first house at 18% interest and selling it for 50% more when it was still 15% interest....

[Tony Hladun]

When the CBC shows us a house buyer it's a young immigrant family with four children.  Those are probably not the norm.  Someone who buys a $700k house is probably selling a $700k house that's paid for.  I used to joke with my neighbour that we should make ourselves billionaires...we'd sell our houses to each other for a billion dollars and then we could go around saying we're each worth a billion dollars.  The price of a house is really an admission ticket to a certain wealth strata.

Yes there aren't enough cheap houses but that's in Toronto and Vancouver.  There are plenty of places in Canada where house prices are much more reasonable, but people need to be willing to live there.  In 1974 I left Toronto because houses cost $50k and as a graduate engineer I only made $10k.  So my wife and I moved to Calgary and bought a house for $27k.  If we're not going to an office why do we need to be in a major city?  But governments need to recognize this and help build smaller communities. 

The real measure of housing health is not the price but it is the number of houses sold.  There will always be corporate and government transfers that pay whatever is necessary.  When sales are few this has an effect of propping up prices. 

All that said, the price of an average house is 40% of the average family income divided by the interest rate.  The near zero interest rates (and QE) have created horrific asset bubbles.  Governments that wring their hands and say how they'll fix it are actually the creators of this problem.  In the meantime we're sliding on ice and when the mortgages need to be renewed, then we'll find out what will really happen.  

Edited May 15, 2023 by Tony Hladun

[I am Groot]

On 5/15/2023 at 12:27 PM, Dougie93 said:

but this is where Canada is caught in the demographic trap

the Canadian population is collapsing

Is it? Says who? Like, if we cut immigration in half would our population fall? Well? No, actually. It would continue to rise.

And maybe if houses were a little more affordable and people had better-paying jobs, and more hope for the future they'd have more kids.

[I am Groot]

23 hours ago, impartialobserver said:

I do not know about Canada but one of the hidden costs involved (at least in NV and OR) is the cost of getting permits. The bureaucratic costs that are set upon the builder make the prospect of building low cost (and therefore low profit) homes somewhat unlikely. Second, with CA expats and their high cash flows willing to pay steep prices.. that prices out the locals. 

It is not so hidden.

A well-functioning housing market results in the market price of housing being close to the feasible cost of constructing it. If prices persistently exceed this construction cost, it is often due to barriers that inhibit new construction. These barriers often stem from excessive regulations. We estimate that, because of the barriers to building more single-family houses, homebuyers in the eight most restrictive cities paid an extra $229,000 per new house between 2007 and 2016. In Vancouver, the cost of housing restrictions is by far the largest in Canada, at $600,000 for the average new house, and ranks among the largest internationally as a share of market costs. Why are housing costs so high? We find that restrictions and extra costs on building new housing – such as zoning regulations, development charges, and limits on housing development on both Greenbelt land and land between urban areas and the Greenbelt – are dramatically increasing the price of housing. The extra costs on new and existing homes are over $100,000 in some Ontario municipalities.

https://www.cdhowe.org/sites/default/files/2021-12/Friday Commentary_513.pdf

[Dougie93]

6 minutes ago, I am Groot said:

Is it? Says who? Like, if we cut immigration in half would our population fall? Well? No, actually. It would continue to rise.

And maybe if houses were a little more affordable and people had better-paying jobs, and more hope for the future they'd have more kids.

they don't have kids when they are industrialized

in an agrarian economy, kids are free labour

in an industrialized economy, kids are a burden

so Canadians have less than two kids per couple

which is below replacement rate

hence we need to import kids from the agrarian societies to make up the difference

I have no quarrel with these immigrants propping the debt & property prices up

as a property owner, I am open for business

Edited May 16, 2023 by Dougie93

[impartialobserver]

4 minutes ago, I am Groot said:

It is not so hidden.

A well-functioning housing market results in the market price of housing being close to the feasible cost of constructing it. If prices persistently exceed this construction cost, it is often due to barriers that inhibit new construction. These barriers often stem from excessive regulations. We estimate that, because of the barriers to building more single-family houses, homebuyers in the eight most restrictive cities paid an extra $229,000 per new house between 2007 and 2016. In Vancouver, the cost of housing restrictions is by far the largest in Canada, at $600,000 for the average new house, and ranks among the largest internationally as a share of market costs. Why are housing costs so high? We find that restrictions and extra costs on building new housing – such as zoning regulations, development charges, and limits on housing development on both Greenbelt land and land between urban areas and the Greenbelt – are dramatically increasing the price of housing. The extra costs on new and existing homes are over $100,000 in some Ontario municipalities.

https://www.cdhowe.org/sites/default/files/2021-12/Friday Commentary_513.pdf

It is somewhat hidden because when you buy a house.. this is not exactly a line item on a bill. You agree to pay the final asking price or not? The composition of that asking price is not part of the transaction other than stuff like title fees and such. The construction cost is not laid out in line item fashion either. 

We have seemingly undesirable land to the east of Reno. Lots of wide open nothing. Some places even have playa (dried up lake bed). Yet, new homes go for $500K and you start to think.. there can't be that much demand to live out on the open desert. The answer.. and one that I only found through public records requests is that the non-construction costs in these rural counties increased by 250% since 2011. 

[I am Groot]

19 minutes ago, Dougie93 said:

 have no quarrel with these immigrants propping the debt & property prices up

as a property owner, I am open for business

You also don't much care what happens to Canada, and have said so.

[Dougie93]

2 minutes ago, I am Groot said:

You also don't much care what happens to Canada, and have said so.

I don't view the immigrants as being a threat to Canada

they come here to do business, wanting to buy properties

I am happy to do business with them

the dysfunction of Canada is related to the structure of the Confederation itself, not the immigrants

[Dougie93]

14 hours ago, I am Groot said:

You also don't much care what happens to Canada, and have said so.

you cannot expect a Loyalist Orangeman of Upper Canada

to have any particular fealty to a Post National State

since that literally means ; not a country anymore

as Canada erased itself by government edict

I didn't leave Canada, Canada left me

rendering me into a Citoyen du Monde therein

at which point, I simply fall back upon my history, the story of my people

Edited May 17, 2023 by Dougie93

[impartialobserver]

this reminds of me when I go back home to Idaho and folks tell me that Idaho has been ruined. What they are really saying is that it is not white enough and also too populated. Most of these folks earn more than in the past, have actual homes (not trailers or renting), and such...unlike the past. 

[herbie]

So let's blame the sellers, not the fool who paid $2.3 million for the house Dad bought for $19.900 in 1960.

 

[CdnFox]

1 minute ago, herbie said:

So let's blame the sellers, not the fool who paid $2.3 million for the house Dad bought for $19.900 in 1960.

 

Why blame anyone. You're trying to suggest that selling something you own at market value makes you a bad person. Or that purchasing a thing at market value makes you a bad person.  Neither is true.

The problem is we don't have enough homes. If we did it wouldn't be an issue . if you want to "blame" anyone then blame the provincial and federal gov'ts who created the environment that lead to that without consideration.

[herbie]

No I'd never condemn making a profit, that's how I lived.

I'm trying to point out how people seem to have completely forgotten how to act as consumers. If it's too much - don't buy it. If no one buys $2+ gas, or $50lb steak the price will fall. It works both ways.

Unfortunately with not buying a house it only works if your rent doesn't keep skyrocketing. Hell I've seen rents for mobile homes here listed at $2000 a month and know the owners, if they even have a mortgage on it, are paying $500-$600. If I was 30 years younger, I'd grab the one next door and have an instant $1000 or better income

Edited May 16, 2023 by herbie

[Dougie93]

3 hours ago, CdnFox said:

The problem is we don't have enough homes. If we did it wouldn't be an issue . if you want to "blame" anyone then blame the provincial and federal gov'ts who created the environment that lead to that without consideration.

the bottom line here in Ontario

is that, if you are lucky, you will marry the woman of your dreams

at which point you will find out that your wife is all about property

so to make your wife happy, you will have to climb the property ladder

find your dream girl, marry her, buy her a fully detached home

then kick back on the deck and grill some steaks with her

that's  the meaning of life for we men of Upper Canada

 

[CdnFox]

25 minutes ago, herbie said:

No I'd never condemn making a profit, that's how I lived.

I'm trying to point out how people seem to have completely forgotten how to act as consumers. If it's too much - don't buy it. If no one buys $2+ gas, or $50lb steak the price will fall. It works both ways.

Unfortunately with not buying a house it only works if your rent doesn't keep skyrocketing. Hell I've seen rents for mobile homes here listed at $2000 a month and know the owners, if they even have a mortgage on it, are paying $500-$600. If I was 30 years younger, I'd grab the one next door and have an instant $1000 or better income

Well -your second paragraph peels the onion i'm afraid.  Because we're not building enough homes for our population it doesn't really matter if someone buys or rents - either way  they're going to get kind of screwed. If more people rent then rents go up, if more people buy then housing prices go up and if we keep building fewer homes than our growth demands both are going to continue to go up.

People will have to very seriously re-evaluate their expectations for living spaces - and evne that only helps for so long before there's not enough again.

[CdnFox]

1 minute ago, Dougie93 said:

the bottom line here in Ontario

is that, if you are lucky, you will marry the woman of your dreams

at which point you will find out that your wife is all about property

so to make your wife happy, you will have to climb the property ladder

find your dream girl, marry her, buy her a fully detached home

then kick back on the deck and grill some steaks with her

that's  the meaning of life for we men of Upper Canada

That is oddly specific, but sure!

[SpankyMcFarland]

Many countries are facing the same problem in their major cities. Even Germany - which has taken a much more sceptical view of the property ‘boom’ than the Anglosphere - is seeing sharply rising rents in Berlin. 

[impartialobserver]

Do not know about Canada but the construction industry is having a difficult time hiring folks especially in the Western US. The pay is great but the younger crowd is opting for the office job, technology job, etc. instead of the strenuous but rewarding work of framing, drywall, concrete, stucco, electrical, etc. They are doing so because their dad, brother, uncle is physically broken down and they do not want to be that way. Keep in mind, that there are ways to not have the bad back and bad knees but that gets left out. They simply see construction as this industry where you toil in the heat or cold, end up physical broken down, and usually have no work from late Oct. to late Feb.