Trudeau says real estate needs to be more affordable, but lowering home prices would put retirement plans at risk

[CdnFox]

 

Politically speaking, that was absolutely not the right thing to say.

 

[Michael Hardner]

36 minutes ago, CdnFox said:

Politically speaking, that was absolutely not the right thing to say.

 

I agree, but there's something to it.  For anyone to make rents affordable they'd have to crash the market wouldn't they?

 

I don't have a dog in this fight but I think it's a huge problem that nobody wants to face...

[CdnFox]

Just now, Michael Hardner said:

I agree, but there's something to it.  For anyone to make rents affordable they'd have to crash the market wouldn't they?

 

I don't have a dog in this fight but I think it's a huge problem that nobody wants to face...

Well yes and no.

First off let's deal with his reasoning. The idea that it's necessary for retirement is a little flawed. People either still need a home to live in, or their downsizing which means they have to buy another home when they sell. If price is dropped that also means the price drop on the new smaller home that they are downsizing to also drops. There is still a slight loss if prices drop but given what I just noted it's not nearly as bad as people would think.

Secondly prices don't really need to drop much in order for them to become more affordable over time. Even if price is stagnated and didn't rise considering that inflation already affects people's wages it would not be many years until people earned enough that they could afford the houses at the prices that they are currently set at. So you may see it. Of extensive slow or no growth, kind of like what we saw in the 80s, but eventually wages and earnings would make those prices affordable. 

And additionally certain policies may make homes in areas that are less expensive more realistic or practical to buy. For example if there were sufficient medical services and entertainment in a smaller town a person may sell their home in the city and move to that smaller town in order to get the benefit of downsizing economically. The smaller town they benefit from additional work etc however that generally doesn't just happen by accident it does require some planning.

There's no doubt that in order for homes to become affordable the days of a 20% increase on the value of your home year after year have to go. But that doesn't mean there has to be a big drop in price per se. If they are clever, there are other solutions to mitigate and severely reduce any negative financial impact while still allowing people to get into their own home

[Moonbox]

16 hours ago, Michael Hardner said:

I agree, but there's something to it.  For anyone to make rents affordable they'd have to crash the market wouldn't they?

I don't have a dog in this fight but I think it's a huge problem that nobody wants to face...

That pretty much sums up Trudeau's attitude on everything though, doesn't it?  Acknowledge problems and offer platitudes with no solutions, while actively exacerbating the problem.  

The housing crisis in Canada, I would say, is probably the greatest policy failure in Canada in at least 50 years (possibly ever), and it played out slowly and obviously through Justin's complacent watch.  Multiple generations of Canadians are now faced with the reality that most of them will never own a home, and our PM is telling us he's more concerned  with boomers' retirement slush funds, whilst insisting on immigration targets for which we can't even fulfill basic needs.