1. Canadian mortage owners owe $1.86 for every $1.00 they earn (Fact reported over and over).
2. That was at a rock bottom interest rate of 0.25% (As of July 2022; four month time frame, the rate has been raised to 2.5%). That is 10x more interest.
3. “Basic Math” for math’s sake. That $1.86 (0.86 portion which is interest) is exponentially larger. Ofcourse, many of those are fixed, but anyone on variable who hasn’t switched to fixed yet, will probably do as the prime rate from the BoC can go as high as they want (see 1980’s and 1990’s inflation curves).
4. You can argue that today is different than the previous bubbles – sure, but on a macro ecnomic point of view: aka. “Basic Math” POV, a lot of people, especially people who bid 500K over asking are going to get really really really hurt.
5. FOMO is real. Buckle up and live on food bank donations. Or money launder like the Ozarks – there are always big dirty money looking for a front insulation layer.

In the case of Canada, even where people had access to ‘extra’ money (by whatever means) in order to pay more for housing, I don’t think we actually had a exaggerated supply problem (in respect of population growth). I’ve looked into housing completions (as provided by the Canada Mortgage and Housing Corporation) from 2006 to 2019, plus housing starts from 2000 to 2005, (as a surrogate for completions, assuming the starts in December in one year are finished by December of the next). Over this 20 year period, there was about 3.48 million housing completions across the country, and this compares to a total population growth of about 7.15 million persons (source: macrotrends). Noting that over 50% of the completions between 2006 and 2019 were detached houses, semis and duplexes based on CMHC data (i.e. 3+ bedroom configurations), and assuming the same ratio between 2000 and 2005, that means these ‘homes’ could theoretically house at least 4 x 1.74 million = 6.96 million individuals, and that doesn’t include the remaining 1.74 million
completions classified as ‘apartments and other’. Given that not all 7.15 million persons added to the population would require their very own self-contained home (i.e. a 1:1 ratio), it seems highly implausible that there is a housing shortage in any absolute sense. And even so, how could you measure such population growth, if people didn’t already have a place to live?

Yet, we know that home prices have out-accelerated median incomes since at least the year 2000 (source: Bank of Canada presentation to the Canadian Association of Business Economics, August 2015). Previously, prices were typically 3-5x’s median incomes, but now have ballooned to 8-15x’s as much. The National Bank of Canada Housing Affordability Monitor dated February 3, 2021 clearly demonstrated the extent of unaffordability, by showing the amount of time it would take persons with median household incomes just to save for a down payment for a non-condo home, based on the median home price in their metropolitan area (& assuming no pre-existing debt). It’s 289 MONTHS in the case of Toronto. The NBC monitor from Q1 of 2022 shows its even become WORSE since then (i.e. 363 months in the case of Toronto). And that’s just for the down payment; not the mortgage!

Even if you believe that we actually did have a physical shortage of housing (pan-nationally, for all types, simultaneously — seriously????), relative to population growth, one still has to ask themselves: how can the prices be demanded higher, when there isn’t the incomes (or availability of credit) to support them? After all, something could be highly popular / in demand, but if the price commanded is so much higher than what people have / can get access to, then how can the item sell at all? My costs in supplying a good can be very high, and I may be justified in asking for a high price, but what if no one can afford what I am demanding? Why did I go ahead with the production of the good in this case? How long will it take to sell at the higher price, while costing me money to hold onto it?

Myself, I would appreciate it if there was a broad consensus across the country that prices for housing went up so much, simply because they could. There’s really no other reason.

Also inefficient use. How many developers have no said half their inventory is bought by Realtors trying to add $100k to the price of each home?

I don’t think anyone is saying we don’t need to build any more but the cost is related to credit over the past few years, moral hazard, and FOMO needs.

You’re quoting the economist from the Liberal Party’s loophole to fundraising who never discloses where their financing comes from. .

Real economists have ripped that to shred (including BMO, who won the award for best analysts over the past two years), explaining younger countries have fewer homes per capita, because they still structure into family units. It’s older countries like Italy where you have a single nonna in one apartment and a mom and dad in another, and childless adults..

haha. No one’s fleeing large cities. There’s literally a video on their TikTok where they show this is the narrative every single bubble peak.

Yes, it’s internet stranger you that did the math but won’t show anyone. Unlike the bank that gave the numbers, you can’t trust their math. They’re just trying to devalue all of their assets and lose money! Stoopid banks.

The backlink works, you have to login nitwit.

They aren’t producing negative news, they’re literally quoting what an economist is telling rich people. The point is poor people like you don’t have access to the same information that rich people are being told. Just go buy another house if you think it’s always a good investment, no one cares.

Now explain how immigration climbed in the 90s while home prices and building fell.

Nope. Look at the stats for the number of people buying a second home. Ron Butler interview was gold, where he explains people are just buying a second home and using the first one as leverage as a downpayment when they upgrade. It’s a leverage ponzi.