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> In Canada, pre-covid, we saw the average house price increase in value more than the average wage in the country. That is point blank crazy. That is a weird f
by 908B64B197 6y ago
> In Canada, pre-covid, we saw the average house price increase in value more than the average wage in the country. That is point blank crazy. That is a weird financialisation of the economy that we don't yet understand - inflation in a fixed asset that doesn't increase productivity.
This is a result of an overly conservative investment landscape and out of control immigration quotas. Housing is used as a way to park money in a jurisdiction that has more predictable laws.
- jariel 6y agoIt's mostly very low interest rates, longer term mortgages, aggressive selling on the part of banks, and the 'belief' that housing 'cannot go down'. Just like when interest rates are higher in one country than the next, money flows there. ROI is higher in housing than other sectors, money flows there. Foreign buyers and mass immigration are driving factors, but I don't think the primary issue. Another way of putting it, is that real productivity is way down, and the real economy is in deflation - stuff is getting cheaper, and the opportunities to create value are fewer and far between, the only places left are the stock market and housing etc..
- 908B64B197 6y ago> longer term mortgages These exist because prices have jumped up so much relative to income, so it's a side effect of speculation really. > Another way of putting it, is that real productivity is way down, and the real economy is in deflation - stuff is getting cheaper, and the opportunities to create value are fewer and far between, the only places left are the stock market and housing etc.. That worries me. I'd rather prefer growth to come from new IP than magic assets that can never go down.