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Up here in Canada, there is absolutely no doubt that we're in a bubble. By every measure we're in trouble... consumer debt levels, income-to-price and price-to-

by zukzuk 5y ago

Up here in Canada, there is absolutely no doubt that we're in a bubble. By every measure we're in trouble... consumer debt levels, income-to-price and price-to-rent ratios... This infographic has been making the rounds and pretty much sums things up: https://twitter.com/i/status/1377353707478601729 https://twitter.com/i/status/1377353707478601729 Even the apologists who previously tried to to explain this in terms urbanization, desirability, immigration, etc have capitulated. It remains to be seen whether we're just an odd case (along with maybe NZ and a few others), or a canary in the coal mine for our neighbours to the south, but the situation here at this point is virtually guaranteed to end badly for everyone involved.

milkytron 5y ago
From my understanding, Canada's housing market is largely being influenced by foreign investors. I've read that lots of foreign investors are buying homes in cash, over market rate, and then letting them sit vacant. If Canada's laws don't discourage this and others see it as a safe way to store their wealth, this could be a possible explanation for the insane rise in home costs compared to other countries.
- 908B64B197 5y ago
  > I've read that lots of foreign investors are buying homes in cash, over market rate, and then letting them sit vacant. This is used to launder illegally acquired assets that are brought in the country. Then as a bootstrap toward acquiring western passports. > If Canada's laws don't discourage this It encourages it. Out of control immigration quotas as well as lax regulations regarding birth tourism and a liberal-party friendly immigrant base has made it a no brainer for the current party to keep the bubble expanding.
- railsgirls112 5y ago
  Hasn't that been the case in places like NYC for a bit now? I remember reading about like single digit occupancy rates in massive luxury apts. I'd imagine that would have only increased but would love a check on my understanding.
- sidlls 5y ago
  It's what drives the price increases in the Bay Area in California, as well. When 20% or more of the purchases in a given year are by foreign persons, it is problematic. They don't live here, they buy properties and let them sit vacant or rent them out. We need to basically prohibit ownership of anything but a primary residence by any entity that isn't a citizen or permanent resident (corporate entities would qualify if 100% of their true beneficial owners meet the same standard).
ggjjjttt 5y ago
My impression is that everyone involved has crossed the rubicon of moral hazard. Even a 30% crash won't be enough for the majority of people: https://betterdwelling.com/canadian-property-bubble-nears-systemic-failure-and-not-even-a-big-crash-can-fix-it/ https://betterdwelling.com/canadian-property-bubble-nears-sy...

by zukzuk 5y ago

milkytron 5y ago

From my understanding, Canada's housing market is largely being influenced by foreign investors. I've read that lots of foreign investors are buying homes in cash, over market rate, and then letting them sit vacant. If Canada's laws don't discourage this and others see it as a safe way to store their wealth, this could be a possible explanation for the insane rise in home costs compared to other countries.

908B64B197 5y ago
> I've read that lots of foreign investors are buying homes in cash, over market rate, and then letting them sit vacant. This is used to launder illegally acquired assets that are brought in the country. Then as a bootstrap toward acquiring western passports. > If Canada's laws don't discourage this It encourages it. Out of control immigration quotas as well as lax regulations regarding birth tourism and a liberal-party friendly immigrant base has made it a no brainer for the current party to keep the bubble expanding.
railsgirls112 5y ago
Hasn't that been the case in places like NYC for a bit now? I remember reading about like single digit occupancy rates in massive luxury apts. I'd imagine that would have only increased but would love a check on my understanding.
sidlls 5y ago
It's what drives the price increases in the Bay Area in California, as well. When 20% or more of the purchases in a given year are by foreign persons, it is problematic. They don't live here, they buy properties and let them sit vacant or rent them out. We need to basically prohibit ownership of anything but a primary residence by any entity that isn't a citizen or permanent resident (corporate entities would qualify if 100% of their true beneficial owners meet the same standard).

ggjjjttt 5y ago

My impression is that everyone involved has crossed the rubicon of moral hazard. Even a 30% crash won't be enough for the majority of people: https://betterdwelling.com/canadian-property-bubble-nears-systemic-failure-and-not-even-a-big-crash-can-fix-it/ https://betterdwelling.com/canadian-property-bubble-nears-sy...