The "LOLCANADA" thread...again
So what's new?
I've noticed the Liberals are now ahead in all major polls and Trudeau hasn't even started to campaign yet...i'd be shocked if they lost the election now.
Just shows just how incompetent Conservatives are.
I don't think either of you quite states it correctly. When you look at a 20 year graph of housing prices (and ignore the covid blip) it is basically a straight line upwards. So the whole "cycles" thing in housing isn't really a good explainer in my view. Like sure there are times where things are more a buyers market and times it is more a sellers market and the like, but the bigger trend is just consistent housing price growth over decade
I wish my early childhood home was 20 years ago, but alas I am older than that. My parents bought it for 50k a few years before I was born. Going on Redfin and looking at the house it last sold for around 900k.
Immigration equals more people and more demand for housing. This directly translates to higher prices. I am not sure there is a huge difference between too little to late and out of touch. Saying that immigration has little to do with housing prices, we have no power to change things, and the other guy won't do anything either isn't a winning message. Canada is over 20% immigrant, this has been going on a lot longer than 2023-2024.
There is a big difference between criticizing immigration on short and long term timeframes. The critique of the last two years is that the spike happened so quickly that the markets were not able to absorb the rapidly increased demand fast enough. But that argument doesn’t apply on multi-decade timeframes, where immigration has all sorts of massive economic booms for Canada, markets do have time to absorb demand, and the “directly translate to higher prices” argument doesn’t work nearly as cleanly. Like we didn’t go from 50k to 900k in 50 year or however old you are because we have 20% immigrants, these are both tied into the big economic forces that roll out over decades.
Well yes that called inflation .
Money supply will always increase because government always do debt in the long run and with immigration always higher , banks can loan in always higher numbers, injecting even more liquidity in the market .
while inflation certainly affects the nominal values of things like homes, it is also true that things like average home price to average income has increased over the decades. That is, it isn’t just inflation, it is also steady erosion in affordability metrics
Right those economic forces are supply of housing vs demand of housing. Number of people is the biggest part of the demand side which is directly affected by immigration. If we are unable or unwilling to increase the supply while increasing the demand housing prices will increase. That is what has been happening the past few decades where houses went from like 2x salary to 10x+.
Right those economic forces are supply of housing vs demand of housing. Number of people is the biggest part of the demand side which is directly affected by immigration. If we are unable or unwilling to increase the supply while increasing the demand housing prices will increase. That is what has been happening the past few decades where houses went from like 2x salary to 10x+.
Nah house prices went up a lot not because of shrinking of houses pre covid but interest rates going much lower then historical average.
During covid they hit an all time low.
Fwiw we didn’t had an increase of 40% in immigration during covid right ?
But yeah demand explodes when your money is worth nothing -> everyone can borrow at 0-1% interest rates with no risk of going bankrupt .
Right those economic forces are supply of housing vs demand of housing. Number of people is the biggest part of the demand side which is directly affected by immigration. If we are unable or unwilling to increase the supply while increasing the demand housing prices will increase. That is what has been happening the past few decades where houses went from like 2x salary to 10x+.
You make my point. My criticism of you is that you looked at a relatively slowly increasing demand side pressure (net immigration over the decades), and blamed that for housing prices when the reality as you bold here is multifactor and includes that Canada's too-limited housing inventory is a result of supply side things too like decades of municipal/provincial/federal/economic effects combined. In the short term, the basic problem is that the spike in immigration is "too fast" that supply just can not increase that fast in the period of a couple years. Long term, these asymmetries get absorbed in the economy as supply catches up. Canada's economic growth is also so tied up in immigration where some sort of counterfactual where you imagine there hasn't been decades of immigration growth doesn't even really make sense, like who knows how much weaker our economy would be in that scenario.
while inflation certainly affects the nominal values of things like homes, it is also true that things like average home price to average income has increased over the decades. That is, it isn’t just inflation, it is also steady erosion in affordability metrics
It’s the same thing .
It’s a reduce value of the currency .
It would extremely easy to bring those prices down tomorrow by reducing demands.
Stop cutting internet rates .
Reimpose a min cash down to a 10% level (pre 1992)
Put back the amortization of a mortgage back to 25 years (changes like in 2005 that went to 30+ years)
But those thing would create big big problems economically and for the governments ( especially local with tax income) .
They are stuck now since real estate is such a big part of the economy .
All they wish now imho is prices stay at that level for like a decade with no increase , no economic downturn , no spike in unemployment and no spike in inflation no more .
It’s a very thin line but for now they succeed .
You make my point. My criticism of you is that you looked at a relatively slowly increasing demand side pressure (net immigration over the decades), and blamed that for housing prices when the reality as you bold here is multifactor and includes that Canada's too-limited housing inventory is a result of supply side things too like decades of municipal/provincial/federal/economic effects combined. In the short term, the basic problem is that
Yes immigration has been happening for decades. But right now we are seeing record immigration with unsustainable housing prices, a long with Ddoctot shortages, classroom's over capacity, etc. Curious what your justification would be for continued record immigration because I can't make sense of it.
Nah house prices went up a lot not because of shrinking of houses pre covid but interest rates going much lower then historical average.
During covid they hit an all time low.
Fwiw we didn’t had an increase of 40% in immigration during covid right ?
But yeah demand explodes when your money is worth nothing -> everyone can borrow at 0-1% interest rates with no risk of going bankrupt .
I, um, wait, what???
Of course interest rates have played a role in this, but the issue is far, far more complicated than that, and there's no question in my mind that supply vs. demand has been a huge part of it.
I, um, wait, what???
Of course interest rates have played a role in this, but the issue is far, far more complicated than that, and there's no question in my mind that supply vs. demand has been a huge part of it.
Of course but it always starts from the value of money .
At 1% interest rates anyone can borrow vast amount of money to bid on a house .
Put Interest at 10% and almost no one could bid on houses at those level , even with 5 millions immigrants coming per year (unless those are millionaires immigrants from the start ) .
That covid crisis created massive amount of inflation by reducing the value of money near 0.
Yeah it totally facked up the demand/ supply in many markets.
One thing is for sure , our economy is unbalance by many different factors like immigration, lack of supply and an inappropriate value of Canadian $ .
Government try to solve all of this with just the central bank, hopefully a light bulb will someday light up in their head to adress the other issues .
Yes immigration has been happening for decades. But right now we are seeing record immigration with unsustainable housing prices, a long with Ddoctot shortages, classroom's over capacity, etc. Curious what your justification would be for continued record immigration because I can't make sense of it.
Agree
Has any party ever reach 99% chance of winning a majority 1 year out from an election? This is surreal.
There is nothing the Liberals and NDP can say other than "we ****ed this up bigly"
Has any party ever reach 99% chance of winning a majority 1 year out from an election? This is surreal.
There is nothing the Liberals and NDP can say other than "we ****ed this up bigly"
I've said it before. Internally they've known they are toast for awhile, and the policy and decisions they are currently making is to make the Conservatives job as difficult as possible.
You make my point. My criticism of you is that you looked at a relatively slowly increasing demand side pressure (net immigration over the decades), and blamed that for housing prices when the reality as you bold here is multifactor and includes that Canada's too-limited housing inventory is a result of supply side things too like decades of municipal/provincial/federal/economic effects combined. In the short term, the basic problem is that
I think you may misunderstand my position. I have not put all the blame on immigration for housing prices, I am saying it is the main demand side factor and the factor the federal government has the most control over. If Canada had been able to increase housing supply during those periods, then there would be no massive increase in prices. But in the world we live in immigration has been hitting record levels while the housing supply has not kept up. Theoretically the economic supply catches up in the long run, but in reality there are many policy choices that can prevent this from happening and there is a lot of pain in the meantime.
Ok. Earlier you said this:
Immigration equals more people and more demand for housing. This directly translates to higher prices.
I was objecting to this kind of ridiculously one sided viewpoint when in reality the relationship between immigration and housing prices is complex, hardly “directly translates” and in particular has a whole range of supply side and regulatory stuff in the mix. So sure your newer formulation is sort of vacuously true, in that housing policy is primarily provincial and municipal, not federal, and so federally they control the demand side more than otherwise. Regardless, because of how integrated immigration is in the economy on the decades-long timescale it’s basically impossible to substantiate these kind of short pithy claims.
Bit picture: immigration is and has been great for Canada. It might have spiked slightly too high in 2023, so good on liberals for closing that down and returning to strong but healthy levels.
Ok I should have been more clear. In an environment where new housing is not being build at sufficient rates, more immigration will directly translate into higher prices. I don't think this is a particularly controversial claim. You have mentioned that immigration spiked slightly high in 2023 when immigration was at nearly 500k, but it has been around 250,000 to 300,000 for a long time and the housing prices have been steadily outgrowing incomes during this time.
I feel like we keep going in circles where yes immigration is fine if adequate housing is being built, but adequate housing isn't being built and it hasn't been for a while. So whether you want to blame immigration or housing policy it doesn't matter, having high levels of immigrations during a housing crisis is poor policy and from what I can tell unpopular as well.
Even that seems to phrase "immigration" as the sort of ultimate trump card. Like "because other things are bad, we will blame immigration". But the source of the problem is largely the other things that are bad, not the immigration itself.
I'll give an example of what I mean. One of Trudeau's big housing initiatives is the housing accelerator fund. It offers a tonne of money to municipalities that do rezoning to allow more "missing middle" things, like for example 4-6 unit townhouses on what was previously zoned as a single family dwelling (poilievre proposed something similar, with a bit more stick and a bit less carrot). Well it's been a bit of a failure to actual incentivize these types of things not because they don't get rezoned - they do and municipalities take those fed dollars - but be cause municipalities have been spiking up development fees, so you'll have something like a crazy 40% increase in development fees over a short period that drops housing starts way down. This is just one small piece of the puzzle, but it shows some of the complication and notice that there is a lot of interconnection here so hard to just point fingers in one place (like do you blame the feds who shouldn't really be involved in the first place but maybe need to restructure the programs with more penalities for non-zoning related pricing, blame the provinces whose jurisdiction it is, blame the municapalities).
Ok but here is the point: all that mess is happening not because of immigration. So looking at bad housing and blaming immigration (which you initially ONLY mentioned although have iterated better and better) just really misses the mark.
As a small time developer, speaking strictly from the supply point of view and what has impacted construction of housing:
1) Rates rates rates. The higher the rate, the less the developer can refinance at the end of a rental project. It's called "take out" financing. It's based on debt coverage ratio and the rates have very significant direct correlation with what projects work and what doesn't. If a developer can't pull out all his capital at the end of the project, he won't go forward. No developer out there wants to be "stuck". Meaning capital stuck in projects and then unable to do any more deals.
2) Home buyers. Developers can't start a condo project unless 70% of the condos are presold. Most condo/house developers won't even dare begin building a project without that 70% pre-sold threshold. Banks won't even consider giving construction financing unless you hit a 70% threshold. If developers don't think they can hit 70% fast enough, they won't even do the project or buy the land. The interest on holding costs are too high to sit there waiting while in project launch. And if you launch and are unable to hit the 70% threshold after say 1 year, you will have wasted a **** load of money and forced to abandon the project.
Rates impact how many home buyers there are out there.
3) Construction costs. Everything costs more from materials to labour. And Canada due to its construction unions doesn't have cheap labour like USA does. That is why USA is able to pump out rental developments almost all across the sun belt where supply > demand and rents are going down, even in high interest rate environment.
4) Higher development charges / zoning and permitting timelines. It takes almost 1.5 years to get a new construction building permits in Montreal. All across Canada you have onerous timelines + development charges. And municipalities, being the socialist mafias they are, keep jacking the costs up.
In low interest rate times, developers can eat those costs and timelines, but during times like this many of them go into hibernation.
Ya good post. Interest rates will hopefully subside and stop throwing fuel on the fire, but they are hardly the whole problem.
lol Trudeau is pretty funny here. Like I don’t know which of you guys thinks the future prime minister screeching insane conspiracies about communism is appealing, but like poilievre should cut the this crap immediately. So sad to see the MAGA style politics here in Canada
Ok I should have been more clear. In an environment where new housing is not being build at sufficient rates, more immigration will directly translate into higher prices. I don't think this is a particularly controversial claim. You have mentioned that immigration spiked slightly high in 2023 when immigration was at nearly 500k, but it has been around 250,000 to 300,000 for a long time and the housing prices have been steadily outgrowing in
Actually it is obviously true even is more houses are built, because with the same houses being built, absent immigration, prices would be lower.
The only case when this is not true is when there is a dramatic scarcity of construction workers in a country and immigrants are construction workers (which could have been true sometimes in some areas of the USA)
lol Trudeau is pretty funny here. Like I don’t know which of you guys thinks the future prime minister screeching insane conspiracies about communism is appealing, but like poilievre should cut the this crap immediately. So sad to see the MAGA style politics here in Canada
Yeah he's super funny!
Liberals should stop copying the Democrats and calling Polivere "weird" immediately, actually don't. It's important the Liberals keep embarrassing themselves, like using the same slang my 9 year old uses and telling his opposition to "touch grass".
