Bank of Canada says it is not seeing the decline in house prices it had expected

[CdnFox]

5 hours ago, ExFlyer said:

Don't understand your comment.

What can BOC do about shortage of housing?They don't buy land. They don't buy material. They don't hire workers. They don't build houses.

They do control interest rates to try and prevent fools from borrowing money they cannot afford to pay back.

the boc expected the costs of housing to come down DESPITE knowing about the supply issue.  That was the point,  "We're SHOCKED that prices stayed high despite the fact that there's no homes".  That smacks of incomptetence.  Of course prices stayed high

 

[ExFlyer]

2 hours ago, eyeball said:

This makes it sound even like more collective punishment. And what about the foolish banks that foolishly shovel money out the door?

Oh right, the taxpayer has their back.

Banks are a business and make money for their shareholders and, they do. They owe you nothing.

What do they owe the taxpayer and what does the taxpayer do for them?

[eyeball]

Just now, ExFlyer said:

Banks are a business and make money for their shareholders and, they do. They owe you nothing.

What do they owe the taxpayer and what does the taxpayer do for them?

Taxpayers bail out the banks when the fools they loan money to default on their loans.

[ExFlyer]

6 minutes ago, CdnFox said:

the boc expected the costs of housing to come down DESPITE knowing about the supply issue.  That was the point,  "We're SHOCKED that prices stayed high despite the fact that there's no homes".  That smacks of incomptetence.  Of course prices stayed high

 

What it smacks of is a stupid statement.

I am not a governor of the bank and am fully aware that if there is no supply, then prices go up.

The governor should be taken to task for a foolish statement. It hearkens not of incompetence but of dumb things people say.

[blackbird]

Why would the Bank of Canada expect to see a decline in house prices just because they raised the interest rates to an unprecedented level?  Canada is short millions of homes.  There is no way the prices are going to drop just because the BOC hopes they drop.  The shortage and demand is too great.

[CdnFox]

24 minutes ago, ExFlyer said:

What it smacks of is a stupid statement.

Well some would argue that for the bank to be stupid with regards to economics is in fact an example of both stupidity AND incompetence

Quote

I am not a governor of the bank and am fully aware that if there is no supply, then prices go up.

Well maybe you SHOULD be. Sounds like you're already better qualified.

Quote

The governor should be taken to task for a foolish statement. It hearkens not of incompetence but of dumb things people say.

Agreed - and displaying that kind of 'dumb' in his position is a serious issue - it casts doubt over our entire system and it's ability to respond.

[ExFlyer]

33 minutes ago, eyeball said:

Taxpayers bail out the banks when the fools they loan money to default on their loans.

Not quite but there is CDIC.

Edited October 27, 2023 by ExFlyer

[eyeball]

19 minutes ago, ExFlyer said:

Not quite

What do you mean by not quite?

[ExFlyer]

50 minutes ago, eyeball said:

What do you mean by not quite?

A business getting money from government....how unheard of LOL

[eyeball]

4 hours ago, ExFlyer said:

A business getting money from government....how unheard of LOL

Not quite.

[ExFlyer]

On 10/27/2023 at 9:02 PM, eyeball said:

Not quite.

Yes quite.

Government bail outs of business is a normal activity.

[blackbird]

Part of the problem is the massive number of immigrants Canada is bringing in every year.  I think the Liberals goal is to bring in 500,000 immigrants per year.  How is this going to help the housing crisis?  Of course it is just going to make it worse.  

[CdnFox]

2 hours ago, blackbird said:

Part of the problem is the massive number of immigrants Canada is bringing in every year.  I think the Liberals goal is to bring in 500,000 immigrants per year.  How is this going to help the housing crisis?  Of course it is just going to make it worse.  

It's a problem, but it's deeper than that.  the way our system exists, it pretty much forces developers to build slilghtly fewer homes than our population growth requires.  So no matter how many immigrants we bring in we're going to be hooped as it is,

But - increasing immigration makes it worse.  And a sudden sharp drop would at least take the pressure off and help a little bit for a short time - the buildings already underway would still be finished so for a little while new supply would keep up with new demand. If you used that time to solve the deeper problems then you might get back on the road to recovery.

[herbie]

On 10/27/2023 at 11:55 AM, eyeball said:

Taxpayers bail out the banks when the fools they loan money to default on their loans.

Actually they don't. The banks cover that in their rate calculations. There have been no bailouts as such.

And the BOC expected that with higher interest rates, fewer people could afford to buy at the absurd prices and that would cause prices to fall significantly. Entirely reasonable expectation.
They failed to account for the fact people need somewhere to live and investors would still snap them up and profit from ridiculous rents for that very reason. Added on, that too many Canadians are bone stubborn and will bankrupt themselves to buy houses, cars, gas and Tbone streaks regardless of the price before sacrificing the slightest inconvenience. Just like they "need" $150 mo StarLink internet and $100 a month cell phones.

[Army Guy]

46 minutes ago, herbie said:

They failed to account for the fact people need somewhere to live and investors would still snap them up and profit from ridiculous rents for that very reason. Added on, that too many Canadians are bone stubborn and will bankrupt themselves to buy houses, cars, gas and Tbone streaks regardless of the price before sacrificing the slightest inconvenience. Just like they "need" $150 mo StarLink internet and $100 a month cell phones.

This statement sounds like a basic calculation one,  that would belong on the top 10 things that effect prices of anything...Supply and demand...Immigration levels at some of the highest we have had, and still growing which is creating other crisis besides price increases. .it's all a result in failed Liberal policies and actions, with a twist of pandemic thrown in...

Canadians are not stubborn, everyone needs housing, it is a basic human right...purchasing your own home is an investment into your future, hopefully one day to pay it off and use it as a retirement nest egg...

Renting is just pouring your money into someone else pocket for their future , and land lords don't care about your future. rents are are at record levels, greedy landlords are cashing in....now you can't afford to buy and barely afford to rent....

[CdnFox]

49 minutes ago, Army Guy said:

This statement sounds like a basic calculation one,  that would belong on the top 10 things that effect prices of anything...Supply and demand...Immigration levels at some of the highest we have had, and still growing which is creating other crisis besides price increases. .it's all a result in failed Liberal policies and actions, with a twist of pandemic thrown in...

Canadians are not stubborn, everyone needs housing, it is a basic human right...purchasing your own home is an investment into your future, hopefully one day to pay it off and use it as a retirement nest egg...

Renting is just pouring your money into someone else pocket for their future , and land lords don't care about your future. rents are are at record levels, greedy landlords are cashing in....now you can't afford to buy and barely afford to rent....

Well here's the thing - housing isn't actually a human right.  There's no human right that says you shall be granted a  home no matter what.

We tend to recognize that it's something close to an essential thing, and we recgonize that it's in our best interest to make sure everyone has some.

But it's not a right.  A landlord who owns property has not "obligaiton" to provide you or anyone else with a home, and a homeowner has no obligation to sell you their home.

This is where a market economy usually shines -there's an essential need and strong demand, normally the market would move to fill it

But gov'ts at ALL levels have policy in place that severely retards that effort and we don't build enough homes. Haven't for decades now.

That is where the solution lies and  nothing else is going to fix this,

[eyeball]

3 hours ago, herbie said:

Actually they don't. The banks cover that in their rate calculations. There have been no bailouts as such.

As I understand it CMHC protects mortgage lenders.

[CdnFox]

36 minutes ago, eyeball said:

As I understand it CMHC protects mortgage lenders.

Yeah but that payout comes from the CMHC insurance all people have to pay when they have a cmhc mortgage. If you have less than 25 percent down (or whatever it is today) then you must buy cmhc mortgage insurance on it - and if there's a pay out it comes from that insurance, not the taxpayers.

[eyeball]

Got it, thanks.

[herbie]

4 hours ago, Army Guy said:

Renting is just pouring your money into someone else pocket for their future

exactly what I tell my daughter when she confesses yo spending $400 in one month for door dash. Priorities.

[ExFlyer]

14 hours ago, CdnFox said:

Well here's the thing - housing isn't actually a human right.  There's no human right that says you shall be granted a  home no matter what.

We tend to recognize that it's something close to an essential thing, and we recgonize that it's in our best interest to make sure everyone has some.

But it's not a right.  A landlord who owns property has not "obligaiton" to provide you or anyone else with a home, and a homeowner has no obligation to sell you their home.

This is where a market economy usually shines -there's an essential need and strong demand, normally the market would move to fill it

But gov'ts at ALL levels have policy in place that severely retards that effort and we don't build enough homes. Haven't for decades now.

That is where the solution lies and  nothing else is going to fix this,

I am glad to see your points are what I argued with you about a while ago.

It is pure supply and demand and, the supply will not be there if builders cannot make a profit. Another point is that builders want profit but the developers want one too and most importantly, the landlord in the case of rentals units, the person that owns the building, needs to make a profit, not just on the units but to include all the operating costs of that unit and building.

While all levels of government certainly account for a portion of the cost building, todays high cost of land, labour and materials is equally to blame.

 

[Nationalist]

This situation is driving me nuts. I'd like to sell 1 property and retire. But the prices keep going up in Toronto.

[CdnFox]

4 hours ago, ExFlyer said:

While all levels of government certainly account for a portion of the cost building, todays high cost of land, labour and materials is equally to blame.

 

Obviously they play a factor in cost but they're not really 'to blame'.

The value of land is equal to the value of what you can build on it and nothing more. It's high because the value of the properties built on it are high, so solving that problem takes care of that.

The cost of building, assembling, and selling and renting property has always been there. And to be honest - those costs purely are not all that high.  I know for a short while there lumber was through the roof but the biggest costs without a doubt come from the various govt's both directly and indirectly.

People don't even understand all the costs. For example - i have to buy the land today  but i probabyl can't build on it for 2 years and then it's another year ill i finish building and sell, so for 3 years i have to either pay interest on the money used to buy the land, lose interest on the money i spent on the land that's just sitting there if i paid cash (or a combo of both)  AND i'll have to pay property tax AND probably some form of security or clean up or the like.  THat's going to add hundreds of thousands of dollars or much more depending on the size of the land - and that's before a single permit is applied for, a single stick of lumber is bought, etc etc.

The cost of building a nice cozy little 1500 sq ft home in one configuration or another  which should be fine for a small family starting out or someone downsizing should be somewhere around 300,000 dollars or less right now with efficiencies and such that are avialable. That same brand new home is going to sell for about 1.5 million dollars or more in the vancouver area right now. The vast majority of that 1,2 millon is in costs associated with gov'ts.

We can easily build homes that are affordable for people. They're doing it all over the world.  But we can't with the way our gov'ts are set up.