4 ms·

Let's be clear: none of the condo or homeowners "deserve" these economic gains, they are merely a wall that is raised ever higher to ensure that new entrants to

Let's be clear: none of the condo or homeowners "deserve" these economic gains, they are merely a wall that is raised ever higher to ensure that new entrants to the country are forced to pay their wages to existing homeowners' valuations. Which is what makes complaints that it somehow doesn't benefit homeowners all the more outrageous: saying that "sure I'm on the other side of this wall, but I can only use my wealth to stay in this side of the wall" minimizes an absolutely huge unfair advantage you have over people unlucky enough to be born after you or not have wealthy parents.

junofan 3y ago
Also (in general) I don’t think most people would be so sanguine if their condo lost $75k/yr over 8 years.
- neltnerb 3y ago
  Not to even get into how weird it is that something that is literally in worse condition at the end than the beginning, just like a car, increases in value instead of decreasing. And even more that this is the assumption, despite it being based entirely on demand and not at all on quality.
- throw__away7391 3y ago
  This is the scary bit for me. It doesn't take much imagination to speculate that homes are possibly dramatically overvalued at present and current prices are unsustainable. This can't end well.
  - psunavy03 3y ago
    The only time home prices collapsed was when the mortgages underlying them were shown to be funny money. This is largely not the case right now, at least in the US. I can't speak for Canada, but the US largely has a supply problem which can't keep up with demand.
- smsm42 3y ago
  My house lost about 60-70k from the top one of the years (I suck at timing the market). I couldn't care less - I'm not going to sell it anytime soon, and this price is imaginary anyway, and the imaginary price recovered half of it since then, and I still have no idea how much it would be priced when I am going to sell - but I'll be worrying about it then, no point in doing it now. Of course, if that happened every year for 8 years, that would probably be weird, but that would also mean I could buy houses with my pocket change by the end of it.
- bugglebeetle 3y ago
  This is more or less how housing works in Japan outside of Tokyo and maybe a couple other places and I would say they’re doing a lot better than Canada.
ipaddr 3y ago
That's like saying no deserves economic gains by investing in the stock market. You are complaining you were too young and not rich enough to buy Microsoft or Apple shares from the start and feel you will never catch up to those. Write your own story. Find a city with home prices similiar to Toronto 40 years buy and wait. Toronto 40 years ago was very different from the city you know. You had farm land, military bases, going to Yorkdale by bus was two bus tickets. Toronto has grown the people who bet on Toronto were rewarded. It could have went the other way if Quebec didn't almost leave Canada which moved invest from Montreal to Toronto. The Toronto stock exchange at the time was mainly mining financing.
- epistasis 3y ago
  No, the stock market is exactly the opposite of real estate investing. Land is finite, capital is not. Speculation on land value is non-productive, whereas capitalization of productive economic firms is precisely the definition of economic productivity. Real estate gains, when they are not from development, are all rentierism, the enemy of economists of all sorts.
  - deathless 3y ago
    We are so far from exhausting usable land that this argument is ridiculous. There will be more cities. 3rd tier cities will become 1st tier cities (and probably vice versa). Go invest in a city or town wisely (and don't forget to be lucky!) and you will be rewarded.
    - epistasis 3y ago
      Land is all about location, and what is near it. The idea that you could build out in a field ignores the true value and the true finiteness of land, the geography of agglomerations of skill and people.
      - Tiktaalik 3y ago
        Also drive around and you'll find that not all land is created equal. Much of Canada muskeg, tundra, and just awful places to be, which is why no one lives there. British Columbia looks big on a map, turn on the topographic layer and oops it's all mountain. No wonder everyone lives in a handful of tiny valleys. And oops we flooded tons of the valleys for hydro power too, further driving down the actual available prime land one can live on. If no one lives in a place there's usually a good reason.
smsm42 3y ago
What do you mean by "deserve"? It looks like you are making some kind of hidden morality market, where market gains are or should be distributed according to some kind of moral merit, based on unspecified criteria. But no market in the history of humanity has ever worked that way. I think it's safe to assume none ever will. So what's the point? Yes, it's not "fair" that some people are born in better circumstances and some in worse, some are lucky and some are not, so what? Yes, the son of Bill Gates has a huge "unfair advantage" over me whose parents are not billionaires. So what?
- medvezhenok 3y ago
  The point is, the more that gains are distributed randomly in society (and not due to productive effort or doing something useful), the more unstable a society becomes. Sort of how the Weimar hyperinflation in the 1920s (which exacerbated the feeling that things are unfair) set the stage for the rise of Hitler in the 30s. If taken to the extreme, it leads to the collapse of law&order. It’s also why feudal systems were inherently unstable and suffered many uprisings.
  - smsm42 3y ago
    Weimar wasn't random in any way or form. A lot of purposeful action went into making Weimar what it was, and the subsequent events what they were. It wasn't the result of random distribution of gains, it was a result of many purposeful actions of many people. Inflation included of course.
    - medvezhenok 3y ago
      The randomness depends on the perspective - I'm sure that for the people in power or in the know it was not random, but to a random peasant/worker in Germany, it probably seemed pretty random. Same as stock market investing - you can say that the profits are due to smart investing, but you can't ignore all of the centralized decision makers that put their thumb on the scale (i.e. 2008 bailouts?), which preference specific outcomes. In fact, this intervention makes the resulting disparate outcomes worse than random in the eyes of many people (i.e. people are more willing to accept the winner of a random lottery than a lottery that they believe was rigged).

junofan 3y ago

Also (in general) I don’t think most people would be so sanguine if their condo lost $75k/yr over 8 years.

neltnerb 3y ago
Not to even get into how weird it is that something that is literally in worse condition at the end than the beginning, just like a car, increases in value instead of decreasing. And even more that this is the assumption, despite it being based entirely on demand and not at all on quality.
throw__away7391 3y ago
This is the scary bit for me. It doesn't take much imagination to speculate that homes are possibly dramatically overvalued at present and current prices are unsustainable. This can't end well.
- psunavy03 3y ago
  The only time home prices collapsed was when the mortgages underlying them were shown to be funny money. This is largely not the case right now, at least in the US. I can't speak for Canada, but the US largely has a supply problem which can't keep up with demand.
smsm42 3y ago
My house lost about 60-70k from the top one of the years (I suck at timing the market). I couldn't care less - I'm not going to sell it anytime soon, and this price is imaginary anyway, and the imaginary price recovered half of it since then, and I still have no idea how much it would be priced when I am going to sell - but I'll be worrying about it then, no point in doing it now. Of course, if that happened every year for 8 years, that would probably be weird, but that would also mean I could buy houses with my pocket change by the end of it.
bugglebeetle 3y ago
This is more or less how housing works in Japan outside of Tokyo and maybe a couple other places and I would say they’re doing a lot better than Canada.

ipaddr 3y ago

That's like saying no deserves economic gains by investing in the stock market. You are complaining you were too young and not rich enough to buy Microsoft or Apple shares from the start and feel you will never catch up to those. Write your own story. Find a city with home prices similiar to Toronto 40 years buy and wait. Toronto 40 years ago was very different from the city you know. You had farm land, military bases, going to Yorkdale by bus was two bus tickets. Toronto has grown the people who bet on Toronto were rewarded. It could have went the other way if Quebec didn't almost leave Canada which moved invest from Montreal to Toronto. The Toronto stock exchange at the time was mainly mining financing.

epistasis 3y ago
No, the stock market is exactly the opposite of real estate investing. Land is finite, capital is not. Speculation on land value is non-productive, whereas capitalization of productive economic firms is precisely the definition of economic productivity. Real estate gains, when they are not from development, are all rentierism, the enemy of economists of all sorts.
- deathless 3y ago
  We are so far from exhausting usable land that this argument is ridiculous. There will be more cities. 3rd tier cities will become 1st tier cities (and probably vice versa). Go invest in a city or town wisely (and don't forget to be lucky!) and you will be rewarded.
  - epistasis 3y ago
    Land is all about location, and what is near it. The idea that you could build out in a field ignores the true value and the true finiteness of land, the geography of agglomerations of skill and people.
    - Tiktaalik 3y ago
      Also drive around and you'll find that not all land is created equal. Much of Canada muskeg, tundra, and just awful places to be, which is why no one lives there. British Columbia looks big on a map, turn on the topographic layer and oops it's all mountain. No wonder everyone lives in a handful of tiny valleys. And oops we flooded tons of the valleys for hydro power too, further driving down the actual available prime land one can live on. If no one lives in a place there's usually a good reason.

smsm42 3y ago

What do you mean by "deserve"? It looks like you are making some kind of hidden morality market, where market gains are or should be distributed according to some kind of moral merit, based on unspecified criteria. But no market in the history of humanity has ever worked that way. I think it's safe to assume none ever will. So what's the point? Yes, it's not "fair" that some people are born in better circumstances and some in worse, some are lucky and some are not, so what? Yes, the son of Bill Gates has a huge "unfair advantage" over me whose parents are not billionaires. So what?

medvezhenok 3y ago
The point is, the more that gains are distributed randomly in society (and not due to productive effort or doing something useful), the more unstable a society becomes. Sort of how the Weimar hyperinflation in the 1920s (which exacerbated the feeling that things are unfair) set the stage for the rise of Hitler in the 30s. If taken to the extreme, it leads to the collapse of law&order. It’s also why feudal systems were inherently unstable and suffered many uprisings.
- smsm42 3y ago
  Weimar wasn't random in any way or form. A lot of purposeful action went into making Weimar what it was, and the subsequent events what they were. It wasn't the result of random distribution of gains, it was a result of many purposeful actions of many people. Inflation included of course.
  - medvezhenok 3y ago
    The randomness depends on the perspective - I'm sure that for the people in power or in the know it was not random, but to a random peasant/worker in Germany, it probably seemed pretty random. Same as stock market investing - you can say that the profits are due to smart investing, but you can't ignore all of the centralized decision makers that put their thumb on the scale (i.e. 2008 bailouts?), which preference specific outcomes. In fact, this intervention makes the resulting disparate outcomes worse than random in the eyes of many people (i.e. people are more willing to accept the winner of a random lottery than a lottery that they believe was rigged).