Canada's housing obsession is cannibalizing productivity: economist
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- เผยแพร่เมื่อ 11 เม.ย. 2024
- Charles St. Arnaud, chief economist at Alberta Central and former economist at the Bank of Canada, joins BNN Bloomberg to talk about how and why Canada's housing obsession is taking a toll on productivity.
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*Canada individuals living in cars due to partial homelessness result from a complex interplay of factors. High housing costs relative to income, stagnant wages, and income inequality drive this issue. Job loss, weak social support, medical expenses, evictions, and lack of affordable housing also contribute, while systemic problems and inadequate policies further perpetuate the phenomenon.*
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Considering the present situation, diversifying by shifting investments from real estate to financial markets or gold is recommended, despite potential future home price drops. Given prevailing mortgage rates and economic uncertainty, this move is prudent, particularly due to stricter mortgage regulations. Seeking advice from a knowledgeable independent financial advisor is advisable for those seeking guidance.
I've remained in touch with a financial analyst since the start of my business. Amid today's dynamic market, the key difficulty is pinpointing the right time to buy or sell when dealing with trending stocks - a seemingly simple task but challenging in reality. My portfolio has grown by more than $600k within just a year, and I've entrusted my advisor with the task of determining entry and exit points.
@@robertl.andersonI'm very much aware of the great benefits of working with a pro but I haven't found one for myself.
*Obviously talking about successful investment, I know I am blessed if not I wouldn't have met someone who is as spectacular as mrs ava Kimberly*
Housing in this country is crazy, and comes at great social cost. And then we wonder why the birth rate is so low and falling.
Canada has not met natural population replacement rates since 1971
@@DW-op7ly Well, one thing is clear: allowing, within a couple of years, millions of immigrants, migrants and international students from countries with much higher fertility rates is not a solution.
@@DW-op7lyIndian?
That's not the case for basically all industrialized countries. Even the ones with affordable housing has low and falling birth rate.
That is your opinion
Finally!!!! Someone is talking about this in this way! Our economy has turned away from a productive product based economy towards a rents based economy of extracting more and more from the population all towards a housing bubble.
I’m a renter. Im also a researcher and architectural designer working on developing machine learning algorithms for self organizing structures. I can’t buy the equipment I need to do this research and afford to live near the university I do the research at. My investment in my own research is hampered by a landlord collecting rent. Canada has to figure out its priorities. Either enable a young generation to build the next economy or tax us with rents until we give up.
We borrowed and spent living the good life/high standard of living
That is what you folks don’t get… we are broke…. Canadians who can’t pay our debts sitting on 2 trillion in Provincial/Federal debt these days
Debt we really started running up in the 1940s.
Sow dem gud ole dais ye pine fer?
we didn’t pay for the first time around
Which we just kicked this debt down the road for future generations to pay for
Problem is, we stopped meeting “natural” population replacement rates in 1971
And we have around 1000 boomers turning 65 each and everyday in Canada (That started in 2011 won’t end until 2028) By 2036 we will have around 11 million Canadian seniors
As by 2032 immigration will make up 100% of our population growth
So we pack in the immigrants the poor ones to make our french fries and more importantly flip us over in bed in the old age home
The rich ones to come support the economy and prop up the real estate
Because most of these boomers are also personally cash poor/in debt
But luckily….most of these boomers????
Shockingly by some engineered miracle the last few decades 😉!!!!! own a 40 year old plus never been renovated, overpriced home some immigrant is willing to overpay for.
Which these boomers can get lines of credit on or reverse mortgage on Or sell if they have to
Which they should not .. … as that home will be one their own personal old age home in the future unless you can show me some links…
on our building/buying enough facilities to house millions of Canadian seniors in the next decade
Yes it’s one big Ponzi scheme that scr (ew) over the younger folks but we don’t want to crash our Ponzi Scheme of economy.
(I have purposely gone to live in countries and among the locals living on a dollar a day wages in comparison to our dollar. You think your life su…cks these days)
Try having 50k of someone else’s currency worth 2 million of our Canadian dollars
Or have what kids you and I did actually have… Having to sell their wares to Russian sailors for a 500 CDN dollar loaf of bread or trying to sail a boat to some distant country for a better life
Or grandmami/grandpapi begging on the street because that nest egg home they have they can’t sell off or afford to live in
So the people at the bottom of our society lose out…. or we all do
Don’t like packing in these immigrants/people as the solution?
Let’s hear you folks say “I demand to pay more taxes” and “I demand less social services in return”
Or let’s sell 25 year 50 year forward contracts on our natural resources some foreign corporation or Country can come into mine. Using our young as cheap labour
Or let’s be known as the deadbeat generation who had to resort to selling off pieces of Canada
Plus since we stopped replacing ourselves.
It will be more and more likely the great great great grandkids of these new immigrants stuck paying off the debts we run up long after we are gone… As we stick them with the bill
But since we have been sel fish our whole lives living that good life let’s “now” complain about the solutions after decades and decades of this
Our being broke… azzz Canadians who couldn’t replace ourselves
The economy cannot grow off of rent seeking activity like this. We need real productive sectors and real jobs. Being a landlord is not a job. Your job is supposed to pay for the mortgage! Get it out of your head that the tenants can keep bailing you out if you think that way. Stop cannibalizing and destroying our economy please. Because tenants are not going to put up with this anymore it seems. They want a life and future too. Just my opinion.
I agree with you, I am working for high skilled job in cybespace, making good money but buying House is impossible in Vancouver. What I see happening is people moving from BC, imagine all productive labor moves out in next 2-3 years who will pay Landlord's mortgages. All I see is greed around here, people who have house just keep buying, 1,2 3..4..5 and so on. Productivity is locked in rents. Jeez! Hope things get better.
@@india2russia797 same i work in construction as self-employed and i make decent money compared to hourly wages but the fact that you have to make at least a 20% down payment on an average 1M -2M$ townhouse/house is ludicrous and pure insanity. I live here for 5 years now, moved from Montreal and i completely regret this move. There is no housing market in BC.
fear a housing crash due to people buying homes above asking prices with little equity. If prices drop, affordability and potential foreclosures may arise, worsened by future layoffs and rising living costs. I want to invest more than $300k, but I'm not sure on how to mitigate risk.
Consider reallocating from real estate to other reliable investments like stock, crypto or precious metals . Severe recessions offer market buying opportunities with caution, as volatility can yield short-term trading prospects. Not financial advice, but it may be wise to invest, as cash isn't ideal in this period.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
nice! once you hit a big milestone, the next comes easier.. who is your advisor please, if you don't mind me asking?
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Melissa Terri Swayne for the last five years or so, and her returns have been pretty much amazing.
I just looked her up on the internet and found her webpage with her credentials. I wrote her a outlining my financial objectives and planned a call with her.
I said this same thing when I was in Nigeria.
YOU CANNOT BUILD AN ECONOMY WITH REAL ESTATE.
When I came to Canada and I saw this exact same trend I started planning my exit plan because it is stupid.
Real estate will eat your economy and spit it out eventually.
Welcome to poverty and stagnation canada. You did this to yourself. Now get off your seats, grow a backbone, and lets get a real future back. If your a naysayer who just gave up and forgot how to use our civil society and democracy, your welcome to sink into poverty if you dont want to grow a backbone. Just my opinion.
@@abcdedfg8340 what do you suggest doing?
Canada seems to import mostly those that can't make it in their own countries. Harsh but true
Bro. I just want a place to live. Sorry I’m obsessed with living indoors.
Lmao. Leave it to the news cycle to blame people for being unproductive because they can’t afford to live anywhere.
It's not what they are saying...
I have a high end skill that is greatly in demand in BC. There are endless jobs in this niche skill, it pays 110k a year, and the economy is heavily tied to the industry. I want to go there and work, they want me, yet I can't go because if I do I'd be living nearly paycheck to paycheck. I'm moving to the US , Canada is losing all skilled and educated young people because this is ridiculous.
As a small manufacturer, this is absolutely spot-on. In quebec, the first dollar we earn is taxed and we get turned down for government grants to get our own earnings back because we have too much debt on the balance sheet. Contrast this with the US, small businesses can earn the first 100,000 income tax free along with many other incentives for small business to buy machinery without going through a lot of red tape add bureaucracy. If you're living this like we are, none of this comes as a surprise.
Spot on. We need revolution in how businesses are taxed and regulated in this country.
Canada is just a British dominion. It was not designed to be productive, outside of natural ressources extraction.
Yeah well, prefer you pay for your own PPE than dip your hand into my pocket to pay for it. Enough with thie corporate welfare
Big corporations that are public get all the deductions… they get to pay tax last after paying everything else… small businesses suffer, and regular workers suffer most
@@Knowledge.to_Come you really don't know what you're talking about at all. Get an education.
30 years into a housing crisis and you finally noticed - Bravo ! Excellent journalism
30 years? I suppose in Vancouver. On VI things just started getting crazy in 2015. Still bad though.
There will be a case study on Canada in 10 or 20 years and economists/politicians will say, “how did everyone miss the signs?”. The signs have been there for at least 15 years. Is Canada beyond saving? The statistics seem to say yes.
You make it sound like it wasn't on purpose.
Canada is gonna be alot like greece, run for the hills
@@jjthoughts9920hopefully global warming actually happens then 😂, cause without the weather that Greece has - it could be a grim future for Canadians.
@@jjthoughts9920 whats it like in Greece? The economy I mean?
@@MikeyPaper Not good austerity happened and bank runs. Our will get Currency devalued and they are in debt to the imf.
Canada simply needs to introduce very restrictive policies to discourage people from using housing as a financial bid. You buy a home to live in order to be productive. Housing is a non productive asset and should be treated as such. If you are a developer building multiplexes and make a margin, I am all for it. If you are a talented contractor taking on dilapidated homes and fix to make profit, fine. However, encouraging an entire country to be speculators in housing to make quick box is a very good recipe for destroying the economy. What happen to all other sectors of the economy when all the investment is being sucked by housing? this is not a complicated answer as explained by the BNN Bloomberg guest. Canada should also ban buyers from setting the price of home in middle class town. When a single buyer come to your neighborhood and make a crazy over asking offer, they set the price for all homes in the area to new high overnight. Not days. Not months. As as result, the neighborhood (middle class hard working Canadians) are immediately priced out of the town, city even the country. Furthermore, high housing cost will drain the talent pull of the country which is very detrimental for a healthy economy.
I think the government just needs to build a crap ton of public rental housing. Not low income rentals, but just get into the rental business and undercut the market with cheap rent. This will decimate those investors that basically turned homes into rental stock. As you mentioned the investors drove up the price in small towns, they say the prices are high because of short supply but this is not the case. Any average income cannot complete with leveraged cash and cheap interest rates. When your stacking your 3rd and 4th home for rental property, giving 100K over asking a drop in the bucket. Particularly when you can rent the rooms out at $900/head per month.
You can't expect boomers to till the farmlands or work in construction right?
Or anything that requires labor.
This is the core problem we have here. Too many old people with alot of cash and assets in their name!
@@Heartadia thank
1. Fractional reserve banking - Increased the money supply and economy, driving inflation.
2. Cheap interest rates - Amplifies the effect of #1
3. No incentive to build rentals, build condos instead and sell them to people that will rent them out!
4. Increase population.
4.5 Have an "event" when the interest rates go cheaper and make the effect of 1 and 2 the most pronounced as that money flows to #3 ....buy and leverage.
5. profit!
few people are getting very rich... that all matter.
Most Canadians have gone all in on an unproductive illiquid asset. This doesnt bode well when a down turn inevitably occurs.
Housing is much like a car. It get you a safe place to sleep, a car gets you point A to B. Beyond that it doesn’t produce anything, maybe happiness. Happiness can make you make you more productive. So at best, a home should be clean and free of pests and the right temperature. A car should run smooth without smelling bad of exhaust or gas. Going well beyound that is called luxury. I think thats what killing us now is luxeries. Thats why new cars are too expensive, thats why rent is too high because the building and cars have too many luxury features.
@@gormenfreeman499 My real estate produces income. My cars also produce income.
- Mr. Wealthy A.
where would you put the $$$ ???
Are you surprised that productivity suffers when home ownership is something most Canadian citizen can no longer aspire to? a lot easier to be lazy when you don't have a mortgage and live in a slum. These idiots trying to have people work 120 years for just the down payment, we will all be in tents soon enough.
I thought it was due to financial stress and people having to work multiple jobs and probably also not being able to afford enough to save and eat properly. Hungry and burnt out people will definitely not be productive.
Entrepreneurs are fleeing Canada. Too many regulations and taxes.
LOL. Canada has been through forty years of corporate and business tax cuts and deregulation. What are you even talking about?
And cant find stable workers because people keep fleeing high living costs. Well canada did this to itself. Turned housing from a place to live into an investment, and forgot the economy needs workers who can stay around and actually spend on local businesses to grow the economy and jobs. Seems like we thought renting people and other businesses into bankruptcy was the way forward, not actually building real productive industries. But if your all okay sinking into poverty, and dont want to grow a backbone, then who can help you? Or grow one and lets fix this so we can all have a real future. Just my opinion.
@@abcdedfg8340absolutely agree, lousy regulations and taxes are one thing, but people don’t really want to blame themselves for the havoc they created. We created a culture of accumulating money from housing and not even reinvesting it into our own businesses for those businesses to invest R&D and capital.
Why did we have to hit rock bottom as a country to find this out? It should have been obvious in the 2010s when prices kept going up 10% a year far outstripping any kind of real income growth. I was born in 1997 - right about the time we turned into absolute lunatics and kept the foot on the housing bubble for a quarter century, and I've got to reap what all you older jerks have sown.
Blame your parents and also your generation that refuses to do many of the jobs others did in their late teens early 20s.
2000/2001 is generally accepted as our modern immigration push in Canada
The Government then must have realized oh sheeet we haven’t replaced ourselves in 30 years
And in 10 years we are about to have about 1000 boomers a day turn 65 (where that would go on for the next 17 years)
The reason they kept low interest rates for pretty much your entire life until 2022
Was because of many reasons, to spur on the economy, prop up real estate as our boomers are mostly cash poor, but house rich, cut down in the interest payments we have to pay on the debt we owe
Etc etc etc
Now we have no other options as we were selfish Canadians
@@DW-op7ly Now you have a generation that is both cash poor AND house poor.
Thank you for your honesty. It's not everyone in the generations above. I know a lot of them questioned what the h*ll was happening too.
Pillar one of how boomers screwed everyone else for their short-term benefit
Very well put, and a boomer, well that's a loser!
The government did terrible job on creating opportunities for new industry. Much easier to get pre con and sell later for huge profits.
Its not up the government, its up to millenial and gen-z to do when previous generation did..we launched businesses. We didn't become 'content creators'.
Another factor. Our abysmally low pto compared to much more productive nations like in the eu. They are more productive and get about twice as much minimum pto off as us. Maybe employees work more efficiently if they have a real vacation to look forward too?
The solution is quite simple. The government needs to just do 2 things:
1. Introduce laws to stop housing from being a business, meaning heavily taxing people owning multiple houses, especially for renting purposes to put houses back into the ownership of those who are in severe need of them for living in.
2. Build more infrastructure (water and electricity) in Crown lands, which constitute 95% of BC lands right now. Then openly sell those lands to individual owners, not to corporate developers. Sure, it is extremely expensive to build infrastructures, but sooner or later, it must be done. There is no other way around it when current cities infrastructures are barely keeping up with the current density.
Those are good but there is nothing more pressing than stopping mass immigration.
3. Make the laws work that are there to prevent money laundering and false documentation for RE and lending.
Agreed, the media should stop referring to housing as an "investment". You don't live in your investments. Housing is shelter. Mismanagement of rates since 2008 is the root cause, rates should have been raised back to historical norms around 5% a long time ago
I had a meeting with a crown land guy in Surrey 2 years ago and when I asked him why the province won't sell off the crown land to build houses or even park an RV and he said "if you don't like it, move" He didn't even have an answer. I think the gov just wants royalties on logs, minerals etc.....it also makes it better for current landowners. mess
Tons of MPs own real estate and rental properties. They won't ever put any laws in against it.
real estate investors were like the Titanic. Now they united, holding hands on a sinking ship.
Will this housing problem ever be solved? It is the lead story 365 days a year. Fix it!
Fixing it also has to take root and individual and grassroots levels. That means being assertive and reasonable on the need even with ones own landlord for affordable living costs. Yes its not a fun conversation, but its better than suffering silently for the sake of trying to be nice and please the landlord. Unless people like consenting to being driven to financial ruin. I can sympathize for landlords who live at home, but investors i just have no sympathy for. Playing with people going homeless or not for profit in real estate is just so wrong in my opinion. Just my opinion.
I can afford a ridiculous high rent but can't afford to buy a house ... I've been reno evicted 3 times in 15 months ... got chased out of BC and now cant find a decent rental in Lethbridge ... im getting desperate.
I know a guy who was evicted because his landlord wanted to paint the walls. Rent happened to double when the apartment was put back on the market.
The Feds have the power to fix Canada's 2 biggest issues overnight (i. terrible GDP per capita and productivity growth, ii. housing crisis): they could lower income tax (so people have an incentive to be uber productive on an individual level) and tax real estate capitals gains to offset those losses. Productivity would go up, shelter prices would go down, investment would shift away from real estate - which is a non-productive asset - and towards productive investments that yield GDP…and they can keep the same tax revenue. A win from almost every angle! They just have to be willing to annoy the filthy rich that benefited from an offset in their ‘shelter timeline’ relative to other Canadians (i.e. they happen to have been at a point in their lives to "buy" a house prior to the start of "the everything bubble"). If only we had actual leaders in power instead of these simpletons who think they’re fooling their citizens. Shame on them. Squandering the potential of our country.
The Feds are part of the filthy rich. They're not taxing themselves.
missed the boat on real estate cap. gains...don't think we'll see those increases again
It’s a great idea but I would postulate the voting base in Canada are mostly homeowners so the chance of any political party getting majority support to do this would be very low.
2/3 of Canadians are home owners, pretty sure no one wants to upset that base…
Are we trying to solve problems or maintain a lottery system wealth divide? Good leaders have the courage to make the right decisions even when they’re unpopular.
Rebates won't expand our industrial compacity
Absurd immigration numbers created a feeding frenzy for limited properties. Who is in charge here?
i guess your ancestors or you yourself immigrated too? Or are you a native?
Its not really true. We have sooooo many empty condos around the country its unreal. The problem is investors. I used to work for small company in TO..we had 120 units. Some investors didn't care about rent income, they just wanted to leave it brand new for resale in the future as brand new unlived in.
Over crowded by immigration is an overstatement. Canada has large land mass, timber is cheap easily available yet homes r expensive as real estate mafia and banks don't want more houses to be built.
Real estate mafia do not want govt to invest in affordable housing projects or entry of new builder. The home they built at 600,000 dollars including material and labour in 2 months is sold at 1.2 million. Where can u double ur money in 2-3 months. Govt is in bed with real estate mafia and blame everything on immigration.
Canada's largest companies r not manufacturing or service but actually banking. They don't want more homes to be built as home prices will decline, reducing their equity on mortgage instruments of trillions of dollars. Banks want PPL to have multiple homes as with rental income they can pay them back rather than occupancy of owner. Banks also now that if owner is living in their home or partially renting basement, he will not be able to cover mortgage payments from rent alone so Banks wants to mortgage only those homes that can be fully rented to cover mortgage payments.
Banks want u to pay down payment less than 20% so that they can charge upto 4% premium on mortgage as insurance.
Canada has enough land timber manpower to build homes at cheaper prices than usa yet Canadian homes r 3 to 5 times expensive than same acrage same material home in USA.
Even many regulations r not helping to build homes like Agriculture land is very difficult to convert into residential area. Yeah forest area water bodies should be protected but agriculture land should be easily allowed to convert into residential property. Already due to global warming in Canada, the land in permafrost that was not able to be used as agriculture is now getting available for agriculture in North so if Ontario agriculture land can be developed as residential area then the loss of agriculture output of canada can be compensated by new land available in North permafrost areas that now become available for cultivation
there is an extreme urge to flee if you dont own a house. Why would you have to work twice as much, because the housing costs twice due to government policies? . 30 year amortizations will become 50 year amoortizations within the next 30 years.
imagine working 50 years and retiring at age 80 only to finally enjoy your home debt free for maybe 5 years.
You are supposed to be a professional or start a business or invest...this is a capitalist country, not a slave trade.
Canada stopped building affordable housing 30 years ago. So we ended up with only expensive high-margin housing being built. So we spent a large amount on of money to buy housing that does not house many people. The government has to re-introduce policies that promote affordable housing again. It is cheap to build, cheaper to rent and cheaper to buy. This will free up cash to invest in other areas.
Happy to see Canadians waking up and opening eyes beyond housing. Fun fact when Canadians say Real estate or housing, they don't mean shelter which is a basic necessity to quality of life of citizens, they mean the only selling asset in the economy. 😁
This country is condemned.
Real Estate sector to be approx 7-10 % ..Not 30-40% of GDP... Canada has neglected this and everything is broken now.....High time to correct this and pay attention to other sectors...
Good point. No wonder we have no money for anything else after paying the rent 😅
Canadians are waking up and realizing it's better to have a Delaware LLC and only serve US customers.
2008 average household income versus average house prices collapsed at multiples of 6 or less. In Vancouver and Toronto these multiples are over 20. Save your money. Sit on the sidelines. The Canadian housing pyramid scheme can't continue without new people foolish enough to buy in.
The fact that there is already an excessive amount of demand awaiting its absorption, despite how everyone is frightened and calling the crash, is another reason why it is less likely to occur that way. 2008 saw no one, at least not the broad public, making this forecast, as I'll explain below. The ownership rate was noted to have peaked in 2004 in the other comment. Having previously peaked in the second quarter of 2020, we are currently at the median level. Between 2008 and 2012, it dropped by 3%, and by the second quarter of 2020, it had dropped from 68 to 65.
Real estate and stock investments may be good decisions, especially if you have a solid trading strategy that can see you through prosperous days.
You're not doing anything wrong; the problem is that you don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could hope to earn a high salary in these challenging conditions.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
were so fucked this world is a joke
At this point is impossible to stop so the government will do anything in it´s power to keep the bubble in real estate.
Fewer people here are skilled in trades, our economy is tinier than many geographically smaller nations, we focus more so on university degrees for mid to high-status careers than skilled trades, Canadian products tend to be inferior to American-made products yet significantly more expensive, especially things like electronics, there are fewer banks here, fewer (but larger) hospitals, fewer commercial entertainment options, more people here live in big cities than in America, building opportunities are drastically more limited here due to it being colder, materials being more expensive, skilled workers being rarer, and regulations being so strict. Australia is likely to lead us within the decade in terms of both commercial real estate and technological development. Our taxes are more inhospitable to businesses, and entrepreneurs who accrue or want to build wealth tend to either move their wealth to better, more sensible investments like the United States, because there are just so many more opportunities, it's infinitely more secure, and the U.S. is the world's leader in comprehensive property rights and protections that have stood the test of not just decades, but centuries, whereas Canada does not have any of those protections enshrined in law/it's Charter. Canada lacks basic business infrastructure that anyone with entrepreneurial intentions but who isn't rich would come to prize, and this includes extremely basic systems and provisions such as LLCs, certain tax elections, and ownership formats for those after low risk. Every other relevant nation in the world, especially many of those who rely on the States for nominal trade, have either the option for LLC or something equivalent, whereas all Canada has is basic Corporate options with few tax treatment distinctions. This incentivizes people with business plans to incorporate in America, not Canada, which is ultimately a superior economy anyway due to its strong economic diversity. Canada only really has Ontario and BC (and arguably Alberta and the east coast, depending on what you consider *most* relevant); the U.S., on the other hand, has a myriad of major economic centers, including New York, Texas, Arizona, Illinois, California, Florida, Nevada, Georgia, Hawaii, and even sparsely populated and colder areas like Wyoming and Delaware --- two of the hottest legal/business zones to incorporate, resolve legal disputes (business), save taxes, and file. West Virginia would be a fairly crucial player, too, were it not for the shutting down of their top sectors that generated the U.S. lots of income, economic growth potential, and essential skills including skilled labor in mining, drilling, lumbering, etc., though it sucks for anything related to agriculture or harvesting crop.
Canada, for all its size, is not only severely underutilized, but lacking in innovation (besides in medical and health care fields), productivity, skilled labor, and entrepreneurship --- *_especially_* entrepreneurship. And you can tell here...there's far less business/capitalist/commercial attitude than in other countries, especially the States, and unlike Americans, Canadians tend to favor government regulation, handouts, and involvement, whereas "the American spirit" tends to be more rebellious, daring, and capitalistic (even among socialists).
Nothing stated here is absolute; I speak in generalities. Cheers! 🥂
EDIT: More people appear to _prefer to_ live in big cities here relative to Americans BECAUSE THE DENSITY HERE IS HIGHER, excluding places like Houston, Phoenix, and LA for obvious reasons. Also worth noting is what our cities tend to produce more urban sprawl than, say, somewhere like New York City. Also like (modern) NYC, middle-class and upper-class come to Toronto-proper to invest and growth their wealth but not to live or retire. And people in general come to rent, not own --- again, for obvious reasons: high taxation, harsh cost of living, pollution and heavy crime, high population density, lackluster real estate market, etc. Even the job market has tanked drastically, and since no one seems to know how to build or produce much of anything actually essential because so many people have been prioritizing mid to high-status degrees for things like teaching (which has been collapsing in public schools), health care, and business, the services available currently are trending upward in cost, rendering the cost of both maintenence and acquisition tankable only for those with upper-class riches, meaning, like in New York City, the upperclass, uper-middleclass, and middle-middle class are leaving, while poor people who cannot afford to up and leave are left to stay behind in the stagnating city, fighting for increasingly fewer jobs --- which pay lower and lower the higher and higher minimum wage soars, taxation on business pile, and cost of doing business sky-rockets.
High crime rates my butt
Try again
A lot of the money people earn is leaving the country when foreign temporary workers send remittances, billions of dollars every year!
bingo.
The Canadian government spent a huge amount on me from birth to age 25 and then as I'm about to start my most productive years, I moved permanently to the U.S. and now Canada will realize almost none of the benefits of their investments in me except some minimal taxes I paid working from 16-25. Why did I leave? Given the career prospects there, cost of housing, and my tax bracket, I realized I was going to have a much higher quality of life in the U.S. The housing crisis there is creating misery for people who can't leave and causing the most productive members of society to leave. If you are educated in a STEM field, you can easily move to the U.S. and receive higher pay, lower taxes, and a more affordable quality of life.
I think our whole immigration policy to prop up the population & economy will backfire shortly as people realize they can’t get ahead here. And we’ll likely have a Canadian brain drain for the reasons you mentioned. It’s sad to see.
Why do government spend for real estate when do something for free? Change policies.
Canada has upside down priorities.
International students are using the program to buy homes and fsst track to permanent residency. This has to stop!. Next energy costs are too high. We keep exporting oil abd gss abd materials to the usa. We should be using them within Canada. Keep raising the interes rates. Tjat should be yhe major policy.
Oh yea because wanting shelter is a obsession
People invest in housing for a bunch of reasons; 1) it's not the public financial markets, which have crashed 3 times in the last 25 years. 2) It's gone up for over 20 years straight, pretty much, which brings in more and more investors. 3) Capital gains are taxed preferentially. 4) You can borrow 80% of your investment, which you can't easily do in any other speculative market, which multiples price gains 5-fold.
And no.5.. we all need a place to live
Couple corrections mate
1) People invest in housing because its the perfect asset for dummies who aren't willing to learn fixed income and equities markets. Not sure your point about the financial markets, every single one has also recovered within less than 12 months and gone up meaning only people who sold would have ever lost anything, the crashes are completely irrelevant to the casual investor
2) Both financial markets and real estate have seen negative periods but both have "gone up one up for over 20 years straight, pretty much"
3) S&P500 has seen a 4.15x return over the last 25 years, Canadian housing 5.25x and US housing 4x.
4) You can borrow 80% of your investment in a ton of futures, commodities & equities markets on margin which is done by all large hedge funds and institutions
5) In Canada Interest expense on a property used to generate income (investment property) is a tax write off
.
People need cheap places to rent so they can work and stack money that they can invest later and buy their own housing. Renters can’t save anymore. I can see why some people chose to live in their cars, its a way to save money and get ahead.
It is absolutely true. No one wants do invest in Canada anymore. We have franchises and only. Horrible environment for open a business
Thanks to high taxes and government meddling.
1) When prices are artificially low, it results in hoarding.
2) Hoarding artificially creates scarcity.
3) Scarcity increases prices.
The problem in Canada is not that we don't have enough housing units. It's that we have too many people with 3rd and 4th mortgages. It's a hoarding problem.
When the Bank of Canada kept interest rates artificially low after the financial crisis, the result was that people who would have normally been saving their money took on more debt.
Mass immigration along with a boom in temporary foreign workers and foreign students made rental properties a very safe investment. Investors and speculators aren't going to have an empty unit.
The only solution is to be honest about the supply and demand for funds. The government and the Bank of Canada need to stop trying to mess with the dials and tipping the scales in an effort to pick their preferred winners and losers. Interest rates need to be set based on reality. Right now funds are in short supply, so the rates need to go up.
In a perfect world...
Well ppl need houses they can afford first in order to contribute to economy. What do you expect? Wake up from your street bed, and go to work?
We have a PM who thinks budget will balance itself. Let that sink in!
Canada needs results, not words!
This is why they should of increased interest rates after the economy recovered after 2009 to 10.
At the end of the day whatever gives profit is where the money goes. Since we have an oligopoly here you cannot invest in businesses and survive. Imagine going against the corporations who are contributing millions in donations to political parties. You need to take the incentives away from housing and at the same time make more business friendly laws and allow competition to have more people invest in businesses.
The question is will it ever get better, I am entering my late twenties and at this point I am truly questioning whether staying in Canada would make much sense or should I begin looking elsewhere to invest my time and efforts.
Over crowded by immigration is an overstatement. Canada has large land mass, timber is cheap easily available yet homes r expensive as real estate mafia and banks don't want more houses to be built.
Real estate mafia do not want govt to invest in affordable housing projects or entry of new builder. The home they built at 600,000 dollars including material and labour in 2 months is sold at 1.2 million. Where can u double ur money in 2-3 months. Govt is in bed with real estate mafia and blame everything on immigration.
Canada's largest companies r not manufacturing or service but actually banking. They don't want more homes to be built as home prices will decline, reducing their equity on mortgage instruments of trillions of dollars. Banks want PPL to have multiple homes as with rental income they can pay them back rather than occupancy of owner. Banks also now that if owner is living in their home or partially renting basement, he will not be able to cover mortgage payments from rent alone so Banks wants to mortgage only those homes that can be fully rented to cover mortgage payments.
Banks want u to pay down payment less than 20% so that they can charge upto 4% premium on mortgage as insurance.
Canada has enough land timber manpower to build homes at cheaper prices than usa yet Canadian homes r 3 to 5 times expensive than same acrage same material home in USA.
Even many regulations r not helping to build homes like Agriculture land is very difficult to convert into residential area. Yeah forest area water bodies should be protected but agriculture land should be easily allowed to convert into residential property. Already due to global warming in Canada, the land in permafrost that was not able to be used as agriculture is now getting available for agriculture in North so if Ontario agriculture land can be developed as residential area then the loss of agriculture output of canada can be compensated by new land available in North permafrost areas that now become available for cultivation
Obsession?
Housing and rates have been so mismanaged over the past 15 years since 2008. Getting fat on cheap money has cost us all in Canada. Good luck if you over extended yourself.
Pull up a 25 year chart on the low/lowering interest rates
And the inverse relationship between high/higher home prices
We are living in a fradulent market
We should end the free money policy, government handouts and money printing. Canadian dollar's exchange value is at historic low's it is going to be a 3rd world currency if we spend the money WE DONT HAVE. Borrowing should be difficult and expensive, owning an investment property should be UNprofitable so the housing market can get back to normal. We need to stop investors from buying all the single-family houses in the market. They won't stop unless it is unprofitable, or too expensive.
How about invest some money in to better audio and headsets for the media
What do we need to do? what measures? Cutting taxes I understand, but do we eliminate buybacks? they don't incentivize investment in productivity, they create monopolies. I understand the Cap gains tax increase is a problem. How do we make it easier for companies to compete? How does Canada grow its productivity? I know the Libs and NDP can't but neither can the Conservatives. They had what 10 years and our productivity was still an issue with productivity. We can't cut all social programs and have a stable society. What is the answer. I am asking what do we do?
The real problem with Canada's economy is far too many are trying to profit from the public purse instead of the free market enterprise they're supposed to. As well the ratio of borrowed dollars to earned dollars is too high, too much borrowed money in the economy. That's why interest rates are high. It's an attempt to choke down the supply of borrowed dollars. Raising wages and social program incomes is a better way to improve the ratio to curb inflation.
As well it is not the proper role of government and the public purse to invest in or subsidize the private sector. That's Communism that we all watched failed miserably for the U.S.S.R! It's up to the private sector, not government, to fund it's own development. That's free market capitalism! It is the proper role of gov't and the public purse to invest in infrastructure and housing.
You can't have a healthy economy when the private sector depends on the public purse for meta-communist investment, development and profit. No new wealth is generated with that kind of economy. It's even worse if investment is the private sector is done with borrowed public purse money.
These are some of the reasons our economy is tanking.
I have a question, Canada has been on this path of massive investment in the private sector since about 1980. At the provincial and federal level we have never paid of a nickel of the public debt accumulated by 1990, just paid 33 years, a third of a century, in interest. So like when does that massive investment of the 1980s in the private start returning enough to just start paying off (never mind actually paying it off) the debt the taxpayers took on for it? How many more decades will we have to wait for this to happen? How many more decades will it take to pay off all the borrowed tax dollar investments in the private sector since 1990? Better yet when will ordinary Canadian taxpayers burdened with all that debt start to see a higher standard of living from it all? Better incomes, better "affordability? I remember the prosperity of the 1960s and 1970s. When will Canadians see an economy that matches that prosperity again like they've been promised over and over and over again for four decades of massive borrowed taxpayer dollars investment in the private sector? Where's the "Cheddar" from all that for ordinary Canadians?
The private sector has to start to learn how to sink or swim on it's own. In Canada the private sector has been molly coddled and babied far too much by government! This has interfered with the natural selection of free market enterprise. There's too many enterprises, big and small, that wouldn't survive in a real capitalist free market economy. And these lame ducks are hurting productivity and dragging down the economy. They are essentially welfare bum enterprises depending on the government purse for profits and to stay alive. They also depend too much on welfare (low income gov't supplements) and charity (food banks) subsidized workers for profits. If they had to pay wages that made up the shortfall income covered by welfare and charity for workers, they wouldn't make any profits. They're claim, not mine. So that really means all their profits are from welfare and charity. How can you have a healthy economy when all your enterprises that need minimum wage or near minimum wage earners are depending on the support of welfare and charity for profit! Now we're getting to the heart of the economy's problems today!
100% wrong interpretation of the data. Canadians are putting more money towards housing because of the Income to housing price ratio. For example, In USA if you make $100 and spend $20 for housing. In Canada, if you make $100 and spend $35 for housing. It is also not taking into account that Canadian pays more for taxes. So at the end, in Canada you have less money to invest in productive activity.
That’s how you truly interpret the data? Lol. Why start a small business that creates jobs and careers when you can just take out debt to buy a home that will generate you a 30% profit in five years. That’s the problem.
@@BigCheese150 You've nailed it. I'd propose first slashing tax and red tape for business and creating taxes (real ones) on investment property purchases. Second eliminate capital gains on Canadian businesses and stocks, and thirdly 2nd properties get a 20% tax, 3rd+ homes get a 40% tax. That'll direct investor dollars into the proper lanes.
@@bradcomis1066 I hate to say that increasing taxes is the answer but in this scenario it is. The downfall of Canada was when housing became somewhere to live to an investment strategy. Real Estate investing is not a legitimate business and it creates nothing for society.
😂😂😂😂😂😂😂😂
@@BigCheese150 Exactly! This should also help reduce inflated property prices. It's absolutely criminal how real estate speculators have profited at the expense of regular people. That said, instead of a tax, how about eliminating income tax deductions allowed on investment property mortgage interest? It's ridiculous that interest paid by home owners isn't allowed to be deducted from income tax but is on an investment properties. That alone will cause home prices to taper off even as interest rates go down.
But no government has the courage to do something like that...
Guys guys, heres what we do, lets train the most highly educated population in the world... and THEN invest next to nothing in them to make new stuff for the economy... its genius. AND we'll force them to use all their savings on housing instead of investing in productive assets
Or force them out of canada. Wage stagnation and lack of innovation feed into each other. Trudeau could always invest in climate change innovation but nah, taxing everyone to death for his monthly vacation is fine and not narcissistic.
30 years Amortization = STUPID
Get ready for 40 years amortization in the not so distant future.
Rent controls and secure tenancy agreements would deflate the housing bubble and allow first time buyers into the market
LOL. We already did that.
@@shauncameron8390 gotta make em stronger
@@JuliusFawcett
Only to have less housing and still higher prices.
@@shauncameron8390 how many square metres of built residential space is there per person on average
Interestingly I talked about this with my coworkers: "Why is everyone so obsessed with houses? They only talk about it. What renovations they are doing, yara yara". 😅
If we dedicate more resources to build more, how will businesses that are starved of capital create jobs & opportunities for the rapidly growing population that is expected to make monthly payments for the new houses?
Many Canadians think that their home value will keep on rising that's why Trudeau has to ship in as many immigrants as possible, this is a vicious cycle
We need quality citizens not quantity citizens
Sorry that we like somewhere to live.
CANADA LOL
I love how far behind main stream media is behind reddit. 6-12 months at least.
Productivitu is taxed to eternity here... So what is the point of being productive if all os taken by the government?
Probably 15 years too late. Harper did a great job saving Canada from the 2008-2009 subprime crisis. We were in such a great spot for growth.
But we all wanted to be woke, so we voted Trudeau…and basically we are in the Stone Age.
Homes 🏠 in Canada 🇨🇦 are currently being built for the first time ever in its history
Houses are expensive because everyone wants to live in GTHA.
Ontario has area bigger than many country yet only 3 main highways.
Why can’t we build more highways , more interconnected cities which will bring more jobs and cheap housing.
This issue is not unique to Canada. Look south for another, bigger crisis - need for 4 million housing units when big business is buying up low-cost properties to make luxury housing and forcing out the low income people. Because money talks and poverty walks.
It is much easier for a bank to evaluate a mortgage or real estate development deal than an innovative technology or manufacturing company. Somehow we need to encourage banks to develop the expertise to evaluate and lend to all sectors that of our economy that need to borrow money to thrive.
Nationalize them. Banks are public utilities.
What about out of control taxes ? Everyone I know finds no merit in working hard as a promotion would increase the headache much more that after tax salary.
Most people take on additional debt when they get a raise so it's no wonder they feel like they are just spinning their wheels. Canadian taxes aren't to blame, just look at tax rates elsewhere.
@@roofpizza1250 Just because taxes are worse in Europe doesn't mean ours aren't also terrible and huge disincentive to work harder. Or do much else; I personally have an empty secondary suite which isn't worth renting out when I'm just going to pay 40% income taxes on it anyway.
@@alanj9978 Whaaaaaa. Pulling in 10k a month is such a hardship ain't it?
@@roofpizza1250 No, not really. Still hate taxes, though.
Why is the audio so out of sync ??
I work for a multi-national company who has been closing large factories. They have all been in Canada.
Cant keep stable workers because they cant afford to live in the area? And also losing sales because people cannot afford much beyond the bare basics now?
So if people borrowing too much to buy houses (instead of companies borrowing to buy equipment) is a big problem, then why did the government just launched a 30 yr mortgage?
Investing in canada lol,you cant blame anyone but you lol no one I mean NOONE forced you to buy a home which looks like a restroom for 1 M or 700k and then tell people you bbq ed for the weekend this is sheer greed and incompetence and making monopolies after monopolies like which even canadians won't use if they had a choice and on top of that canadians like someone to be precise govt to take care of them from cradle to grave .
On top of that because all of their life they are working for a home in many cases the integrity and work ethic is compromised, you cant have a country run like this ,you can run JT all you want but you are also a part of the problem he just made it worse for you.Seriously what makes it even worse currency printing.
Just because investment in productivity assets (e.g. corporate stocks) is lower, doesn't mean that productivity is declining. In fact, if output increases for a constant or even lower level of capital stock, then labour productivity increases, not decreases. It is totally misleading to say that "Canada's housing obsession is cannibalizing productivity." As a case in point, people may decide not to buy GM or Stellantis stock because they haven't got a solid EV that can compete with TSLA or BYD, so they instead buy a house and borrow less money. Those car companies are losing in productivity not just because they cannot raise capital, but more precisely because they cannot entice people to invest because the management has not made the company competitive. It would be a productivity LOSS if someone invested in those companies, only to have their plant shut down.
Government led malinvestment. Yikes.
Commodity sector about to go on an absolute tear and CoL won’t get any reprieve here, despite being loaded with resources.
That’s because we let the private corporations take our resources where we get unsatisfactory royalties in return
production note: please have your guests use a proper microphone, earbuds sound terrible. You can tolerate bad video but bad audio makes a viewer leave.
We've heard every employer whine and cry that they aren't making any money this year, so can't give a raise.
Who in their right mind would invest in Canadian Business? We all know they're a bunch of broke losers.
Houses go up, because money goes down. Its a sure win. As long as governments can't balance budgets, housing will always be the only way to get ahead.
We could reduce the pressures on demand for new housing.
What do you mean? 90% of the Rental market is owned by BWalk ( they are no less than Mr. Potter) ….also, there aren’t enough 3 BD 2 BA places suitable for families to rent …. Good luck renting with kids ….
Housing is possible but people will want to maximize it and am ethical onr is too close to a full closed economy andrequires more work.
People might go to both but peopke there will want to turn away family.
The a answer is to build more homes, so that the offer meets demand.
Look at it this way, Canadian business want to be like the big boys and become international players. Right away they have a problem, the EU is a closed shop, the USA is a closed shop, Japan, China also a closed shop. In order to gain access, the Canadian government had to grant access, and Canada being the smaller market is always at a disadvantage in any trade deal negotiations. That's why Canadians got the $hit end of the stick on BASEL back in 1974, why we got the worst again on NAFTA. Too small a domestic market, too few people to grow a competitive industrial base. Largely restricted to selling raw materials in highly competitive markets with other 3rd world countries. All our efforts to become players on the international markets have only caused small business to get squeezed out and a very few monopolies to control everything. Throw in technological change and they don't even need workers. The only way left for people to survive is play the real estate game.
Oh genius. It was always been like this for the last 20 years.
If part of your job is taking calls, you owe it to everyone to get a good microphone. Why is the audio so bad for the guest?
mortgages are 22% of the countries GDP.
Funny that the investment numbers started going down around the time when Nortel exploded.
You mean when it was stolen by China?
Yup, and that is what these ivory tower economists don't get - capital goods, IP, R&D etc investments are primarily driven by world-class businesses. Nortel, gone. Bombardier & Blackberry, a shadow of their former selves. Billions of dollars fled the oil sands about the same time. Other than Shopify & Prnhub, not one globe-spanning business is headquartered in Canada.
Nortel's story is a pretty good anecdote for why Canadian business investment is relatively low. Just like RIM and Canadair. Those were all cases of Canadian businesses that invested heavily in new products and production. Each discovered that access to foreign markets is a tenuous thing, foreign capital markets (and gov't industrial policy) are very good at producing domestic champions in those countries, and the Canadian market is just too small (and locally concentrated) to justify large investments for producing only for Canada.
The financialization of housing should be outlawed.
I really don't understand how Canada is housing obsessed, but we have a housing shortage...
More 500k-1M homes is not the solution..... People can't afford shelter.
Immigration immigration immigration. When you make immigration as a topic of unspeakable taboo for any kind of realistical discussion, this happens.
As a guy who works in downtown Calgary every day i meet a few people that came to canada 2 or 3 days ago
It's insane we're calling too many people here its insane im shocked the amount of people getting prs and student visas like peanuts and also refugees
Just two charts explains Canada s failure to diversify the industries beyond Toronto region , Ottawa and Vancouver. Plus Canada depends on jobs available across border in New Jersey / New York and USA based jobs that are done online.
Fannie Mae and Freddie Mac coming
I returned to India with a masters degree and I landed a decent job with social security in my field of expertise. I thank my professors in Canada for helping me develop good skills but the job market there isn't for skilled immigrants. And i decided to not work as a low wage insurance employee or HVAC installer for housing projects. I am an engineer and I will do engineering work. Best of luck sinking ship aka Canada.