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Depends on geography. For example, in Canada, housing is up 30% YoY. Trudeau's Federal government recently said that even a 10% correction in housing would be

Depends on geography. For example, in Canada, housing is up 30% YoY. Trudeau's Federal government recently said that even a 10% correction in housing would be unacceptable. In practice, Canadian housing isn't housing - it's a 30% (or better) government bond that you get to live in or rent out. That's a 30% return guaranteed by a sovereign state that will gladly destroy everything else in the country to prop up housing. There is no investment like it anywhere else in the world, which is why Canada is seeing the largest real estate bubble in the world. The best part? You can sell your principle residence completely tax free. Not a penny in tax paid from capital appreciation.

SadCanadian 6y ago
I live here in Toronto and it’s an absolute dumpster fire. The country is increasingly becoming hollowed out and residential investments are increasing as a % of total investments. In addition, there is no plan for prosperity. GDP per capita has been stagnant or negative and the productivity numbers are weak. The housing sector is becoming a giant leech sucking the life of out of productive investment. Engineers have quit to become real estate agents and try their hand at selling to foreigners or over-leveraged locals. Very little hope here from the eyes of a local. Maybe you can study software to get out and go to an American city. America remains relatively industrious. Canada is just becoming a high tax version of Monaco (doesn’t even make sense but still).
- jcims 5y ago
  I live about four hours due south of you and loved visiting Toronto as a kid. I had seen similar commentary recently about the real-estate market and thought folks were exaggerating. From what I could see, they weren't. Just now I was going to make a joke about the long game being in Nunavut but checked my work first and, uhh, nope. That's some crazy shit. $600k for a (nice) 5br on a half acre in the tundra? No thanks. I know we look funny from up there but we do love y'all. My sister-in-law is from Guelph and lives in Ohio, we just accidentally bought matching F150's. So feel free to come down any time. The politics suck but the people are fine.
  - smnrchrds 5y ago
    Unlike in the south, high property prices in the territories are due to the cost of shipping building materials, not the price of land.
    - jcims 5y ago
      It seems the pandemic has flattened that out. Construction material prices here in the midwest are up 100-150%.
Logon90 5y ago
A 30% return on real estate or a 30% depreciation of CAD? That's the interesting question. Though the best one to ask at this point is: crypto or real estate?
smnrchrds 5y ago
> Trudeau's Federal government recently said that even a 10% correction in housing would be unacceptable. Could you please provide a source? I cannot find anything on the web. > it's a 30% (or better) government bond This cannot possibly be true. First of all, 2020 was a special year for asset prices, not just in Canada and not just for real estate, but for all assets all around the world. Second of all, even if the first assertion is correct, there is a world of difference between not allowing prices to decline vs not allowing them to increase any less than 30% YoY. Third, 1.3^27 is 1192. Average home prices in Vancouver is over 1 million CAD. Do you honestly argue in 27 years, the current homeowners could sell off their property and net a sweet >1 billion CAD? That we would have millions of billionaires in Canada in 27 years?
- SadCanadian 5y ago
  It was not the federal government that explicitly said this (emphasis explicitly) but rather an MP for Vaughn in Ontario. His name is Adam Vaughan and he said this two weeks or so ago. https://betterdwelling.com/canada-says-property-bubble-not-great-for-locals-good-for-foreign-investors/ https://betterdwelling.com/canada-says-property-bubble-not-g... Yes, BetterDwelling is a permabear but Vaughan's comments are legitimate. He said it in an interview with TVO. On another note, the 30% number seems ridiculous. And, yet, do not be surprised if Canadians seriously believe this. Remember, people have been screaming bubble for a decade, and there has been no such pop yet. Of course, I think this is unsustainable. At 6-12% growth rate you're looking at like low to mid 8 figure values...for the average home. At 15-30% you're looking at hundreds of millions of dollars over 30 years. Ridiculous, isn't it? Interesting discussion on the Financial Times comments section about young people feeling insecure also highlights this property inflation. Basically, the AngloSphere has decided to inflate assets and forget about industrious activity. In the long run, you just end up with a hollow, low productivity and low social mobility country. Is this acceptable? Well, Canadians aren't voting against it. Of course, this is because they think they are getting richer. In reality, the country is just heavily indebted and consuming tomorrow's income today. I am keeping most of my savings down south with the Americans and their equity market. If the BoC can keep the bonanza going, so can the Americans.

SadCanadian 6y ago

I live here in Toronto and it’s an absolute dumpster fire. The country is increasingly becoming hollowed out and residential investments are increasing as a % of total investments. In addition, there is no plan for prosperity. GDP per capita has been stagnant or negative and the productivity numbers are weak. The housing sector is becoming a giant leech sucking the life of out of productive investment. Engineers have quit to become real estate agents and try their hand at selling to foreigners or over-leveraged locals. Very little hope here from the eyes of a local. Maybe you can study software to get out and go to an American city. America remains relatively industrious. Canada is just becoming a high tax version of Monaco (doesn’t even make sense but still).

jcims 5y ago
I live about four hours due south of you and loved visiting Toronto as a kid. I had seen similar commentary recently about the real-estate market and thought folks were exaggerating. From what I could see, they weren't. Just now I was going to make a joke about the long game being in Nunavut but checked my work first and, uhh, nope. That's some crazy shit. $600k for a (nice) 5br on a half acre in the tundra? No thanks. I know we look funny from up there but we do love y'all. My sister-in-law is from Guelph and lives in Ohio, we just accidentally bought matching F150's. So feel free to come down any time. The politics suck but the people are fine.
- smnrchrds 5y ago
  Unlike in the south, high property prices in the territories are due to the cost of shipping building materials, not the price of land.
  - jcims 5y ago
    It seems the pandemic has flattened that out. Construction material prices here in the midwest are up 100-150%.

Logon90 5y ago

A 30% return on real estate or a 30% depreciation of CAD? That's the interesting question. Though the best one to ask at this point is: crypto or real estate?

smnrchrds 5y ago

> Trudeau's Federal government recently said that even a 10% correction in housing would be unacceptable. Could you please provide a source? I cannot find anything on the web. > it's a 30% (or better) government bond This cannot possibly be true. First of all, 2020 was a special year for asset prices, not just in Canada and not just for real estate, but for all assets all around the world. Second of all, even if the first assertion is correct, there is a world of difference between not allowing prices to decline vs not allowing them to increase any less than 30% YoY. Third, 1.3^27 is 1192. Average home prices in Vancouver is over 1 million CAD. Do you honestly argue in 27 years, the current homeowners could sell off their property and net a sweet >1 billion CAD? That we would have millions of billionaires in Canada in 27 years?

SadCanadian 5y ago
It was not the federal government that explicitly said this (emphasis explicitly) but rather an MP for Vaughn in Ontario. His name is Adam Vaughan and he said this two weeks or so ago. https://betterdwelling.com/canada-says-property-bubble-not-great-for-locals-good-for-foreign-investors/ https://betterdwelling.com/canada-says-property-bubble-not-g... Yes, BetterDwelling is a permabear but Vaughan's comments are legitimate. He said it in an interview with TVO. On another note, the 30% number seems ridiculous. And, yet, do not be surprised if Canadians seriously believe this. Remember, people have been screaming bubble for a decade, and there has been no such pop yet. Of course, I think this is unsustainable. At 6-12% growth rate you're looking at like low to mid 8 figure values...for the average home. At 15-30% you're looking at hundreds of millions of dollars over 30 years. Ridiculous, isn't it? Interesting discussion on the Financial Times comments section about young people feeling insecure also highlights this property inflation. Basically, the AngloSphere has decided to inflate assets and forget about industrious activity. In the long run, you just end up with a hollow, low productivity and low social mobility country. Is this acceptable? Well, Canadians aren't voting against it. Of course, this is because they think they are getting richer. In reality, the country is just heavily indebted and consuming tomorrow's income today. I am keeping most of my savings down south with the Americans and their equity market. If the BoC can keep the bonanza going, so can the Americans.