7 ms·

I’m not sure what’s different, but I will chime in to say that I’ve been reading about Canada imminent bubble burst for 15 years. I mean, eventually someone may

by wredue 3y ago

I’m not sure what’s different, but I will chime in to say that I’ve been reading about Canada imminent bubble burst for 15 years. I mean, eventually someone may be right, but had I let this get to me and not buy my house 12 years ago, I would be in a much worse position today. Be careful with people trying to predict how markets will move.

jwond 3y ago
People predicting the Canadian housing bubble would burst probably didn't think the government would resort to such absurdly high levels of immigration. https://globalnews.ca/news/10386750/canada-41-million-population/ https://globalnews.ca/news/10386750/canada-41-million-popula...
- skeeter2020 3y ago
  I'm interested that you used the word "absurd" - how come? Historically nothing sets up a country better for future success than lots of immigrants - if it's paired with government policy that doesn't discourage growth...
  - LegitShady 3y ago
    because the rapid growth has put so much pressure on house/rent prices, healthcare availability, general inflation on prices etc that overall the standard of living is falling for everyone.
  - gonzo41 3y ago
    Poor immigrants now == booming growth over the medium term. Rich immigrants just spend the locals out of their homes. The west is importing the wrong type of migrants.
    - me_me_me 3y ago
      In canada's case. This was not the thing at all. It became a trend in china's rich circles to invest in canadian housing market as way to hide money from ccp and to flex your wealth. Chinese new money are prone to trends, and at scale it can have terrible results for city like Vancouver - quick google - "Chinese homebuyers accounted for nearly one-third of Vancouver's real estate market during 2015"
  - phyrex 3y ago
    The argument is that the immigration rate has nearly doubled compared to the baseline (https://www.statista.com/statistics/443063/number-of-immigrants-in-canada/ https://www.statista.com/statistics/443063/number-of-immigra...) and that the country isn’t set up to absorb such a higher number of immigrants, not that immigration is bad as such
  - 3vidence 3y ago
    First canada has one of the largest population growth rates in the world (very unusual for a G7 country) Second, Canada had absolutely terrible business development investment. There is no capital to make use of the increase in population and as a result the GDP per capita is going negative every quarter. Now that the quality of life in Canada is dropping, highly skilled Canadians are trying to get out as fast as they can making the Canadian market even less competitive. I don't think this combination of variables has been present in previous population booms (post WW2). I think we are in new territory here being pushed aggressively by a few companies trying to find even cheaper labor than what was possible.
  - tmnvix 3y ago
    > ...if it's paired with government policy that doesn't discourage growth... Well, exactly. Bringing in large amounts of immigration to support an economy that that largely revolves around property transactions will contribute to an increase in property prices but will drag down GDP per capita and drive up infrastructure costs. This is NZ.
  - TimPC 3y ago
    If Canada took in half the number of immigrants it does it would still have one of the largest rates in the world. We are massive outlier for how many we are taking in and all sorts of things aren't keeping up with the demand. The biggest two are home building rates and the health care sector but there are other problems as well.
    - robocat 3y ago
      Canada has 21% immigrants[1] - it is not an outlier compared to AU/NZ. Canada needs 1/2 again as many immigrants to match Australia which has 30% already. I'm in New Zealand with 27% foreign born. Net migration per 1,000 people (2023) figures[2] are: Australia 6.4, Canada 5.4, New Zealand 4.8 So Australia's immigrant population is also growing 20% faster than Canadas. (albeit emmigrant numbers included so perhaps I'm oversimplifying - I'm not familiar with Oz - but New Zealand has significant outflows). [1] https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_immigrant_and_emigrant_population https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_... [2] https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_net_migration_rate https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_...
      - TimPC 3y ago
        The relevant number is not so much how many people are born outside the country which can include 90 year olds who came to the country in WW2. But rather the YoY population growth from immigration, which is a more accurate measure of recent influx. Canada welcomed 471,550 new permanent residents in 2023 and had an increase of roughly 550,000 temporary residents. That's a net influx of over 1M people for a country of over 40M. Most of Europe takes in about 1% of population in immigration not 2.5%. Australia targeted 195,000 permanent places and a total of 548,000 places across permanent and temporary programs. For a country of 26M that's 2.1% which is still extremely large but well below 2.5%. Also even if we use your numbers, Canada mostly accelerated immigration in 2023 and 2024 but already by 2021 our immigration percentage was up to 23% according to our census so your numbers are badly out of date for measuring recent immigration. In terms of reaching 30% with a net influx of over 1M immigrants a year over those two years, Canada could be as high as 27% immigrant now. Which even if it is lower than the raw total in Australia I'm sure we can acknowledge is a very rapid change that puts major strain on services.
  - me_me_me 3y ago
    > Historically nothing sets up a country better for future success than lots of immigrants Ummm citations needed urgently. I would point out, immigration policy vs anyone without a passport is welcome are two complete scenarios that the only thing in common is that outsiders are coming in. Unchecked immigration policy as a good thing is a myth. People from clashing cultures dont mix naturally. Only results are natural ghetos and cultural clashes. Allowing undocumented people in without any due diligence, only advertises that undesirables from other countries can escape, or being dumped by more crafty foreign leaders. The immigration as a positive is strictly related to being the cause for brain-drain effect. You want intelligent hardworking people in, not just anyone. Also its better if people you are attracting are of similar heritage with similar values and culture. As those people assimilate to host cultures within a generation or two. The european countries don't really have distinctive minorities from their neighbors. The inter-eu immigrants withing generation or two basically become a host country citizens. I would point to Sweden and their current problems, also to the change of mind of the pro-unchecked immigration politicians. Who now are openly and publicly stating they were wrong.
    - TMWNN 3y ago
      > I would point to Sweden and their current problems, also to the change of mind of the pro-unchecked immigration politicians. Who now are openly and publicly stating they were wrong. Context for others: Sweden has no language, income, employment, or skills requirement <https://www.migrationsverket.se/English/Private-individuals/Becoming-a-Swedish-citizen/Apply-for-citizenship/Citizenship-for-adults.html https://www.migrationsverket.se/English/Private-individuals/...> for obtaining citizenship. In completely unrelated news, Arabic is now the second most spoken language in Sweden <https://digitaledition.chicagotribune.com/tribune/article_popover.aspx?guid=7047637a-c5f5-4297-9afa-a273dd443a9a https://digitaledition.chicagotribune.com/tribune/article_po...>.
      - estebank 3y ago
        > Sweden has no language, income, employment, or skills requirement for obtaining citizenship. Neither does the US. Like the US, it has a requirement of having lived in the country with residency for 5 years. In the US those 5 years are after getting a Green Card (permanent residency), not after getting the original dual intent visa that allowed for the Green Card. The Swedish residence requirements seem par for the course[1], if more straightforward than for the US. [1]: https://visaguide.world/europe/sweden-visa/residence-permit/ https://visaguide.world/europe/sweden-visa/residence-permit/
  - rayiner 3y ago
    > Historically nothing sets up a country better for future success than lots of immigrants - if it's paired with government policy that doesn't discourage growth... Define "success?" Mass immigration to America from continental Europe eventually culminated in the 20th century in the dismantling of the American constitution and the republic the founders created. The resulting country is also completely ungovernable. Generations of cheap immigrant labor ultimately created a materially rich society (for some people), but whether it has been a "success" is quite debatable.
    - dctoedt 3y ago
      > The resulting country is also completely ungovernable. Another way to look at it: By any reasonable measure — and for all its indisputable problems — the U.S. is clearly the most successful large, multi-ethnic society in all of human history. Sure, it's always a work in progress. But let's consider the movie, not just the freeze-frame. When people can vote with their feet, it says something that net migration to the U.S. seems to dwarf that to, say, China [1] or India [2]. [1] https://en.wikipedia.org/wiki/Immigration_to_China https://en.wikipedia.org/wiki/Immigration_to_China [2] https://www.indiaspend.com/governance/millions-of-indians-seek-better-lives-abroad-but-india-treats-immigrants-poorly-study-711347 https://www.indiaspend.com/governance/millions-of-indians-se...
      - rayiner 3y ago
        The US already had the highest standard of living in the world at the time of independence, before it became a multi-ethnic society. The country de Tocqueville wrote about was an overwhelmingly British country. The subsequent trajectory of the US has been one of chipping away at that foundation. The accommodation of vast numbers of immigrants from societies that had no tradition of self government, and little in the way of unifying cultural traditions, created a top-down society that can scarcely be called America. Looking at migrants is a misleading indicator of preference, because the choice to emigrate is an aberrational one. Just 7-8% of people in south or east Asia would emigrate if they had the choice: https://news.gallup.com/poll/245255/750-million-worldwide-migrate.aspx https://news.gallup.com/poll/245255/750-million-worldwide-mi....
  - ffgjgf1 3y ago
    > Historically nothing sets up a country better for future success than lots of immigrants That might be mixing up cause and effect…
  - max51 3y ago
    To things in perspective, Canada has roughly the same number of immigrant and foreign student as the US but they are 1/10 the population. And regarding the house prices... last year they built around 200k new homes (all types, including condos) for >1M new Canadians.
  - anamax 3y ago
    > Historically nothing sets up a country better for future success than lots of immigrants Are immigrants fungible?
- wredue 3y ago
  The immigration “issue” is actually because ain’t nobody having kids, and capitalism demands constant growth.
all2 3y ago
Proponents of what is called the "real estate cycle" say it is about 18 years long (plus or minus, and discounting its disruption due to wars), from peak to peak. They say the next peak is due in late '26 or early '27 (October or March, if the month matters). There are some that say they can predict the movements of land speculation based economies. I'm familiar with old blog posts from back as far as maybe 2005 that predicted the crash in 2008 accurately.
- vasco 3y ago
  Proponents of "millennial cycles" say it's about 1000 years long. They know as much as the 18-year cycle ones. There's guys predicting the end of the world tomorrow from an alien invasion also, and if it happens they'd have been right, but not any smarter.
  - me_me_me 3y ago
    haha, exactly! The bauble bursts for a reason. and the reason that there is not enough housing available for the demand, the investment corpo is now buying up the housing as a new avenue of income and population is still growing is only pointing to prices growing indefinitely. Unless there is a population crash, people suddenly stop requiring having place to live, or someone discovers personal pocket dimensions with free houses. But I wouldnt expect it in next 10 years.
- randomdata 3y ago
  > I'm familiar with old blog posts from back as far as maybe 2005 that predicted the crash in 2008 accurately. The housing crash happened in 2006, though. I suppose being able to predict the crash even a few months in advance is impressive, but as you're hazy about the years, it is possible that it was really 2006 and the crash had already happened, which isn't so impressive. 2008 was the securities crash. That is when the mortgage market started to crumble under the weight of housing no longer having the value it once did with mortgagers left underwater. The housing market had to crash beforehand in order for this to happen. Once one saw that the housing market had crashed, it wouldn't take too much of a Kreskin to realize securities were on the horizon.
rukuu001 3y ago
Same in Australia. I think governments (any party) will pull any lever available to prop up the market because of the role that property plays in the economy.
- perilunar 3y ago
  They’ll also prop up the market because of the role that property plays in their own finances — many politicians own investment properties.
skeeter2020 3y ago
Canada's population just grew by a million people in 9 months; that's like 3%+ annualized growth. Add to that specific regions (Alberta just experienced net migration from every province and territory) and I find it hard to believe that anyone can predict "property bubble" with accuracy greater than 20 years resolution. I'm sure that won't stop so pundit from claiming victory when the music stops (or slows) and they have a chair.
- robocat 3y ago
  Listened to podcast linked here: https://news.ycombinator.com/item?id=39878136 https://news.ycombinator.com/item?id=39878136 Talks about Ontario having immigration of 1.2 million but 800000 is temp visas for study. Be careful with that million population growth number - it might not mean what you think!?
refurb 3y ago
Canada had a massive housing crash in 1990. Housing pricing dropped in Toronto by 30% on average (less in the core, up to 50% in the suburbs). Home owners were screaming for relief. If you bought in 1989, you didn’t break even accounting for inflation until 2005 or later. The last decade has been Groundhog Day compared to the 80’s. Complaints of limited supply, people saying “these prices are the new normal”, people taking on more and more debt. To me the most obvious indicator of a bubble is the disconnect between wages and home prices. Toronto has almost the same home prices as San Francisco yet: 1) wages are lower, 2) taxes are higher and 3) mortgages can’t be fixed for 30 years. Fundamentally it just doesn’t make sense. Sure immigration can drive demand, but the affordability issue remains. What’s driving it is speculation - people think they’ll make a lot of money so they take bigger and bigger risks - fraudulent mortgages, “interest rates have to come down” mentality, “the government will never let housing prices drop” mentality, private mortgages that let borrowers leverage up way beyond government standards. I have no idea when it will correct but I’m confident that they will - they always do.
- randomdata 3y ago
  > wages are lower That may be true, but houses aren't that expensive. If you're, say, Austin Matthews making $13MM per year in Toronto, you can still buy a lot of houses. That capacity is not diminished by some tech mogul in SF making $130MM per year. The question is, as always, will something better come along? Indeed, housing is the purchase of last resort. Give people something better to buy and they will! People in Canada especially are happy to buy real estate like mad at this juncture because, frankly, what else is there to buy? Canada doesn't offer much else. You're not going to work to make $13MM just to hold an IOU forevermore. People making $13MM want to collect on what they've created and have something to show for it. The US housing market crashed back in 2006 because tech started showing promise ("Web 2.0", mobile shortly thereafter) and the money left housing to buy into the newfangled tech. It's not clear what Canada's equivalent will be. Granted, it's banking heavily on skilled immigrants to come up with something, so there is possibility of yield. Time will tell.
  - SV_BubbleTime 3y ago

by wredue 3y ago

jwond 3y ago

People predicting the Canadian housing bubble would burst probably didn't think the government would resort to such absurdly high levels of immigration. https://globalnews.ca/news/10386750/canada-41-million-population/ https://globalnews.ca/news/10386750/canada-41-million-popula...

skeeter2020 3y ago
I'm interested that you used the word "absurd" - how come? Historically nothing sets up a country better for future success than lots of immigrants - if it's paired with government policy that doesn't discourage growth...
- LegitShady 3y ago
  because the rapid growth has put so much pressure on house/rent prices, healthcare availability, general inflation on prices etc that overall the standard of living is falling for everyone.
- gonzo41 3y ago
  Poor immigrants now == booming growth over the medium term. Rich immigrants just spend the locals out of their homes. The west is importing the wrong type of migrants.
  - me_me_me 3y ago
    In canada's case. This was not the thing at all. It became a trend in china's rich circles to invest in canadian housing market as way to hide money from ccp and to flex your wealth. Chinese new money are prone to trends, and at scale it can have terrible results for city like Vancouver - quick google - "Chinese homebuyers accounted for nearly one-third of Vancouver's real estate market during 2015"
- phyrex 3y ago
  The argument is that the immigration rate has nearly doubled compared to the baseline (https://www.statista.com/statistics/443063/number-of-immigrants-in-canada/ https://www.statista.com/statistics/443063/number-of-immigra...) and that the country isn’t set up to absorb such a higher number of immigrants, not that immigration is bad as such
- 3vidence 3y ago
  First canada has one of the largest population growth rates in the world (very unusual for a G7 country) Second, Canada had absolutely terrible business development investment. There is no capital to make use of the increase in population and as a result the GDP per capita is going negative every quarter. Now that the quality of life in Canada is dropping, highly skilled Canadians are trying to get out as fast as they can making the Canadian market even less competitive. I don't think this combination of variables has been present in previous population booms (post WW2). I think we are in new territory here being pushed aggressively by a few companies trying to find even cheaper labor than what was possible.
- tmnvix 3y ago
  > ...if it's paired with government policy that doesn't discourage growth... Well, exactly. Bringing in large amounts of immigration to support an economy that that largely revolves around property transactions will contribute to an increase in property prices but will drag down GDP per capita and drive up infrastructure costs. This is NZ.
- TimPC 3y ago
  If Canada took in half the number of immigrants it does it would still have one of the largest rates in the world. We are massive outlier for how many we are taking in and all sorts of things aren't keeping up with the demand. The biggest two are home building rates and the health care sector but there are other problems as well.
  - robocat 3y ago
    Canada has 21% immigrants[1] - it is not an outlier compared to AU/NZ. Canada needs 1/2 again as many immigrants to match Australia which has 30% already. I'm in New Zealand with 27% foreign born. Net migration per 1,000 people (2023) figures[2] are: Australia 6.4, Canada 5.4, New Zealand 4.8 So Australia's immigrant population is also growing 20% faster than Canadas. (albeit emmigrant numbers included so perhaps I'm oversimplifying - I'm not familiar with Oz - but New Zealand has significant outflows). [1] https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_immigrant_and_emigrant_population https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_... [2] https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_net_migration_rate https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_...
    - TimPC 3y ago
      The relevant number is not so much how many people are born outside the country which can include 90 year olds who came to the country in WW2. But rather the YoY population growth from immigration, which is a more accurate measure of recent influx. Canada welcomed 471,550 new permanent residents in 2023 and had an increase of roughly 550,000 temporary residents. That's a net influx of over 1M people for a country of over 40M. Most of Europe takes in about 1% of population in immigration not 2.5%. Australia targeted 195,000 permanent places and a total of 548,000 places across permanent and temporary programs. For a country of 26M that's 2.1% which is still extremely large but well below 2.5%. Also even if we use your numbers, Canada mostly accelerated immigration in 2023 and 2024 but already by 2021 our immigration percentage was up to 23% according to our census so your numbers are badly out of date for measuring recent immigration. In terms of reaching 30% with a net influx of over 1M immigrants a year over those two years, Canada could be as high as 27% immigrant now. Which even if it is lower than the raw total in Australia I'm sure we can acknowledge is a very rapid change that puts major strain on services.
- me_me_me 3y ago
  > Historically nothing sets up a country better for future success than lots of immigrants Ummm citations needed urgently. I would point out, immigration policy vs anyone without a passport is welcome are two complete scenarios that the only thing in common is that outsiders are coming in. Unchecked immigration policy as a good thing is a myth. People from clashing cultures dont mix naturally. Only results are natural ghetos and cultural clashes. Allowing undocumented people in without any due diligence, only advertises that undesirables from other countries can escape, or being dumped by more crafty foreign leaders. The immigration as a positive is strictly related to being the cause for brain-drain effect. You want intelligent hardworking people in, not just anyone. Also its better if people you are attracting are of similar heritage with similar values and culture. As those people assimilate to host cultures within a generation or two. The european countries don't really have distinctive minorities from their neighbors. The inter-eu immigrants withing generation or two basically become a host country citizens. I would point to Sweden and their current problems, also to the change of mind of the pro-unchecked immigration politicians. Who now are openly and publicly stating they were wrong.
  - TMWNN 3y ago
    > I would point to Sweden and their current problems, also to the change of mind of the pro-unchecked immigration politicians. Who now are openly and publicly stating they were wrong. Context for others: Sweden has no language, income, employment, or skills requirement <https://www.migrationsverket.se/English/Private-individuals/Becoming-a-Swedish-citizen/Apply-for-citizenship/Citizenship-for-adults.html https://www.migrationsverket.se/English/Private-individuals/...> for obtaining citizenship. In completely unrelated news, Arabic is now the second most spoken language in Sweden <https://digitaledition.chicagotribune.com/tribune/article_popover.aspx?guid=7047637a-c5f5-4297-9afa-a273dd443a9a https://digitaledition.chicagotribune.com/tribune/article_po...>.
    - estebank 3y ago
      > Sweden has no language, income, employment, or skills requirement for obtaining citizenship. Neither does the US. Like the US, it has a requirement of having lived in the country with residency for 5 years. In the US those 5 years are after getting a Green Card (permanent residency), not after getting the original dual intent visa that allowed for the Green Card. The Swedish residence requirements seem par for the course[1], if more straightforward than for the US. [1]: https://visaguide.world/europe/sweden-visa/residence-permit/ https://visaguide.world/europe/sweden-visa/residence-permit/
- rayiner 3y ago
  > Historically nothing sets up a country better for future success than lots of immigrants - if it's paired with government policy that doesn't discourage growth... Define "success?" Mass immigration to America from continental Europe eventually culminated in the 20th century in the dismantling of the American constitution and the republic the founders created. The resulting country is also completely ungovernable. Generations of cheap immigrant labor ultimately created a materially rich society (for some people), but whether it has been a "success" is quite debatable.
  - dctoedt 3y ago
    > The resulting country is also completely ungovernable. Another way to look at it: By any reasonable measure — and for all its indisputable problems — the U.S. is clearly the most successful large, multi-ethnic society in all of human history. Sure, it's always a work in progress. But let's consider the movie, not just the freeze-frame. When people can vote with their feet, it says something that net migration to the U.S. seems to dwarf that to, say, China [1] or India [2]. [1] https://en.wikipedia.org/wiki/Immigration_to_China https://en.wikipedia.org/wiki/Immigration_to_China [2] https://www.indiaspend.com/governance/millions-of-indians-seek-better-lives-abroad-but-india-treats-immigrants-poorly-study-711347 https://www.indiaspend.com/governance/millions-of-indians-se...
    - rayiner 3y ago
      The US already had the highest standard of living in the world at the time of independence, before it became a multi-ethnic society. The country de Tocqueville wrote about was an overwhelmingly British country. The subsequent trajectory of the US has been one of chipping away at that foundation. The accommodation of vast numbers of immigrants from societies that had no tradition of self government, and little in the way of unifying cultural traditions, created a top-down society that can scarcely be called America. Looking at migrants is a misleading indicator of preference, because the choice to emigrate is an aberrational one. Just 7-8% of people in south or east Asia would emigrate if they had the choice: https://news.gallup.com/poll/245255/750-million-worldwide-migrate.aspx https://news.gallup.com/poll/245255/750-million-worldwide-mi....
- ffgjgf1 3y ago
  > Historically nothing sets up a country better for future success than lots of immigrants That might be mixing up cause and effect…
- max51 3y ago
  To things in perspective, Canada has roughly the same number of immigrant and foreign student as the US but they are 1/10 the population. And regarding the house prices... last year they built around 200k new homes (all types, including condos) for >1M new Canadians.
- anamax 3y ago
  > Historically nothing sets up a country better for future success than lots of immigrants Are immigrants fungible?
wredue 3y ago
The immigration “issue” is actually because ain’t nobody having kids, and capitalism demands constant growth.

all2 3y ago

Proponents of what is called the "real estate cycle" say it is about 18 years long (plus or minus, and discounting its disruption due to wars), from peak to peak. They say the next peak is due in late '26 or early '27 (October or March, if the month matters). There are some that say they can predict the movements of land speculation based economies. I'm familiar with old blog posts from back as far as maybe 2005 that predicted the crash in 2008 accurately.

vasco 3y ago
Proponents of "millennial cycles" say it's about 1000 years long. They know as much as the 18-year cycle ones. There's guys predicting the end of the world tomorrow from an alien invasion also, and if it happens they'd have been right, but not any smarter.
- me_me_me 3y ago
  haha, exactly! The bauble bursts for a reason. and the reason that there is not enough housing available for the demand, the investment corpo is now buying up the housing as a new avenue of income and population is still growing is only pointing to prices growing indefinitely. Unless there is a population crash, people suddenly stop requiring having place to live, or someone discovers personal pocket dimensions with free houses. But I wouldnt expect it in next 10 years.
randomdata 3y ago
> I'm familiar with old blog posts from back as far as maybe 2005 that predicted the crash in 2008 accurately. The housing crash happened in 2006, though. I suppose being able to predict the crash even a few months in advance is impressive, but as you're hazy about the years, it is possible that it was really 2006 and the crash had already happened, which isn't so impressive. 2008 was the securities crash. That is when the mortgage market started to crumble under the weight of housing no longer having the value it once did with mortgagers left underwater. The housing market had to crash beforehand in order for this to happen. Once one saw that the housing market had crashed, it wouldn't take too much of a Kreskin to realize securities were on the horizon.

rukuu001 3y ago

Same in Australia. I think governments (any party) will pull any lever available to prop up the market because of the role that property plays in the economy.

perilunar 3y ago
They’ll also prop up the market because of the role that property plays in their own finances — many politicians own investment properties.

skeeter2020 3y ago

Canada's population just grew by a million people in 9 months; that's like 3%+ annualized growth. Add to that specific regions (Alberta just experienced net migration from every province and territory) and I find it hard to believe that anyone can predict "property bubble" with accuracy greater than 20 years resolution. I'm sure that won't stop so pundit from claiming victory when the music stops (or slows) and they have a chair.

robocat 3y ago
Listened to podcast linked here: https://news.ycombinator.com/item?id=39878136 https://news.ycombinator.com/item?id=39878136 Talks about Ontario having immigration of 1.2 million but 800000 is temp visas for study. Be careful with that million population growth number - it might not mean what you think!?

refurb 3y ago

Canada had a massive housing crash in 1990. Housing pricing dropped in Toronto by 30% on average (less in the core, up to 50% in the suburbs). Home owners were screaming for relief. If you bought in 1989, you didn’t break even accounting for inflation until 2005 or later. The last decade has been Groundhog Day compared to the 80’s. Complaints of limited supply, people saying “these prices are the new normal”, people taking on more and more debt. To me the most obvious indicator of a bubble is the disconnect between wages and home prices. Toronto has almost the same home prices as San Francisco yet: 1) wages are lower, 2) taxes are higher and 3) mortgages can’t be fixed for 30 years. Fundamentally it just doesn’t make sense. Sure immigration can drive demand, but the affordability issue remains. What’s driving it is speculation - people think they’ll make a lot of money so they take bigger and bigger risks - fraudulent mortgages, “interest rates have to come down” mentality, “the government will never let housing prices drop” mentality, private mortgages that let borrowers leverage up way beyond government standards. I have no idea when it will correct but I’m confident that they will - they always do.

randomdata 3y ago
> wages are lower That may be true, but houses aren't that expensive. If you're, say, Austin Matthews making $13MM per year in Toronto, you can still buy a lot of houses. That capacity is not diminished by some tech mogul in SF making $130MM per year. The question is, as always, will something better come along? Indeed, housing is the purchase of last resort. Give people something better to buy and they will! People in Canada especially are happy to buy real estate like mad at this juncture because, frankly, what else is there to buy? Canada doesn't offer much else. You're not going to work to make $13MM just to hold an IOU forevermore. People making $13MM want to collect on what they've created and have something to show for it. The US housing market crashed back in 2006 because tech started showing promise ("Web 2.0", mobile shortly thereafter) and the money left housing to buy into the newfangled tech. It's not clear what Canada's equivalent will be. Granted, it's banking heavily on skilled immigrants to come up with something, so there is possibility of yield. Time will tell.
- SV_BubbleTime 3y ago