7 ms·

> the real estate value bubble has expanded beyond all reasonable limits. I'm very interested to find out how this ends...

sebmellen 4y ago
Societal breakdown and balkanization in Canada? Seems it is already approaching that point.
- monkeybutton 4y ago
  Rent was extremely low in Québec for a long time after the referendum.
- icpmacdo 4y ago
  Having lived my whole life in many different parts of Canada I think it's quite unlikely. It's seemingly easy to romanticize apocalyptic scenarios like that when consuming news/media but I have found very low tolerance for them when interacting with real people across many different communities here.
nostromo 4y ago
Inflation is the only way it can end without another financial crisis. A married couple both making 150k will be seen as middle class soon. It’s already true in a few cities.
Calamitous 4y ago
I’m more curious how it started.
- beiller 4y ago
  Banking oligopoly is my guess. You see similar problems in Australia which has a similar banking setup. New Zealand I don't know how their banks work, but I do know they are up there in the clouds as well. Same deal?
- giarc 4y ago
  Mortgage rates of 1.x% probably didn't help.
  - tiborsaas 4y ago
    Yearly 1% is very cheap, we have around 6% in Hungary :)
    - giarc 4y ago
      We are now up to ~4.5% for fixed interest mortgages and ~2.5% for variable rate mortgage. But in the depths of the pandemic, the rates went near 0.
    - retcon 4y ago
      And that's at your lower bound. Here's why: Edit putting this here as intended Viktor Orban's Bank" Financial Times feature of this morning. https://archive.ph/tINOK https://archive.ph/tINOK This won't help "Hungary Loses the trust of its European neighbours"https://archive.ph/rXucw https://archive.ph/rXucw. Also FT earlier . I contrast these articles because Orban ended foreign currency and foreign banks mortgage loan supply and nationalized the risks, now linking domestic mortgages to the political situation which is for everyone now a reckoning but any reckoning Orban isn't the best prepared for.
- RedShift1 4y ago
  I think it started with mostly foreigners buying up property, not to live in but as investment to keep the value of their money, like using housing as an alternate currency to dollars
  - jmspring 4y ago
    I have been venturing to Vancover BC for the better part of the last 30 years. In that time, there were waves of hippies selling in Kits and moving to the Okanagan, etc. Prices went up. What has happened in the last 15+ years is a noticable vacancy when you look at housing as you walk around. An influx of foreing money has been buying up and keeping properties vacant. This is happening all up and down the west coast. Some of that money may not be foreign, but a lot is. BC has attempted a lack of occupancy tax and it seems like it's not working.
    - epicureanideal 4y ago
      But if we were able to build to keep up with demand, in theory the price would not increase so sharply...
- halostatue 4y ago
  AirBnB investors, flippers, and other speculative purchasers.
beiller 4y ago
It will end in either a correction of the price of housing, or a correction on the currency those houses are priced in to bring it back in line with the rest of the world, because from my understanding the economics when adjusted for wages in Canada is the number that is way out of whack. Place your bets!
- carlgreene 4y ago
  > to bring it back in line with the rest of the world Can you explain what you mean by this? The USA and Canada are both quite low when comparing median home price to median income[0] 0: https://www.numbeo.com/property-investment/rankings_by_country.jsp https://www.numbeo.com/property-investment/rankings_by_count...
  - beiller 4y ago
    I see here showing Canada as #7 on the list (House-price-to-income ratio) https://www.statista.com/statistics/237529/price-to-income-ratio-of-housing-worldwide/ https://www.statista.com/statistics/237529/price-to-income-r... I live in Canada and have a very high wage and I feel like it is not affordable, but maybe I'm just too cheap!
    - cameronh90 4y ago
      That seems to be rate of change since 2015?
- tjr225 4y ago
  I’m curious where exactly in the rest of the world you think these cheap homes are in major metropolitan areas? https://www.cnbc.com/2019/04/12/hong-kong-average-house-price-hits-1point2-million.html https://www.cnbc.com/2019/04/12/hong-kong-average-house-pric... Canada doesn’t even make it to the top 3 Edit: I got a bit more curious so found a more up to date article and Van makes it to 3rd: https://www.bosshunting.com.au/lifestyle/real-estate/most-expensive-housing-markets/ https://www.bosshunting.com.au/lifestyle/real-estate/most-ex... However, you can see that expensive housing is not something unique to Canadian cities.

sebmellen 4y ago

Societal breakdown and balkanization in Canada? Seems it is already approaching that point.

monkeybutton 4y ago
Rent was extremely low in Québec for a long time after the referendum.
icpmacdo 4y ago
Having lived my whole life in many different parts of Canada I think it's quite unlikely. It's seemingly easy to romanticize apocalyptic scenarios like that when consuming news/media but I have found very low tolerance for them when interacting with real people across many different communities here.

nostromo 4y ago

Inflation is the only way it can end without another financial crisis. A married couple both making 150k will be seen as middle class soon. It’s already true in a few cities.

Calamitous 4y ago

I’m more curious how it started.

beiller 4y ago
Banking oligopoly is my guess. You see similar problems in Australia which has a similar banking setup. New Zealand I don't know how their banks work, but I do know they are up there in the clouds as well. Same deal?
giarc 4y ago
Mortgage rates of 1.x% probably didn't help.
- tiborsaas 4y ago
  Yearly 1% is very cheap, we have around 6% in Hungary :)
  - giarc 4y ago
    We are now up to ~4.5% for fixed interest mortgages and ~2.5% for variable rate mortgage. But in the depths of the pandemic, the rates went near 0.
  - retcon 4y ago
    And that's at your lower bound. Here's why: Edit putting this here as intended Viktor Orban's Bank" Financial Times feature of this morning. https://archive.ph/tINOK https://archive.ph/tINOK This won't help "Hungary Loses the trust of its European neighbours"https://archive.ph/rXucw https://archive.ph/rXucw. Also FT earlier . I contrast these articles because Orban ended foreign currency and foreign banks mortgage loan supply and nationalized the risks, now linking domestic mortgages to the political situation which is for everyone now a reckoning but any reckoning Orban isn't the best prepared for.
RedShift1 4y ago
I think it started with mostly foreigners buying up property, not to live in but as investment to keep the value of their money, like using housing as an alternate currency to dollars
- jmspring 4y ago
  I have been venturing to Vancover BC for the better part of the last 30 years. In that time, there were waves of hippies selling in Kits and moving to the Okanagan, etc. Prices went up. What has happened in the last 15+ years is a noticable vacancy when you look at housing as you walk around. An influx of foreing money has been buying up and keeping properties vacant. This is happening all up and down the west coast. Some of that money may not be foreign, but a lot is. BC has attempted a lack of occupancy tax and it seems like it's not working.
  - epicureanideal 4y ago
    But if we were able to build to keep up with demand, in theory the price would not increase so sharply...
halostatue 4y ago
AirBnB investors, flippers, and other speculative purchasers.

beiller 4y ago

It will end in either a correction of the price of housing, or a correction on the currency those houses are priced in to bring it back in line with the rest of the world, because from my understanding the economics when adjusted for wages in Canada is the number that is way out of whack. Place your bets!

carlgreene 4y ago
> to bring it back in line with the rest of the world Can you explain what you mean by this? The USA and Canada are both quite low when comparing median home price to median income[0] 0: https://www.numbeo.com/property-investment/rankings_by_country.jsp https://www.numbeo.com/property-investment/rankings_by_count...
- beiller 4y ago
  I see here showing Canada as #7 on the list (House-price-to-income ratio) https://www.statista.com/statistics/237529/price-to-income-ratio-of-housing-worldwide/ https://www.statista.com/statistics/237529/price-to-income-r... I live in Canada and have a very high wage and I feel like it is not affordable, but maybe I'm just too cheap!
  - cameronh90 4y ago
    That seems to be rate of change since 2015?
tjr225 4y ago
I’m curious where exactly in the rest of the world you think these cheap homes are in major metropolitan areas? https://www.cnbc.com/2019/04/12/hong-kong-average-house-price-hits-1point2-million.html https://www.cnbc.com/2019/04/12/hong-kong-average-house-pric... Canada doesn’t even make it to the top 3 Edit: I got a bit more curious so found a more up to date article and Van makes it to 3rd: https://www.bosshunting.com.au/lifestyle/real-estate/most-expensive-housing-markets/ https://www.bosshunting.com.au/lifestyle/real-estate/most-ex... However, you can see that expensive housing is not something unique to Canadian cities.