Ask the Bottom Line Panel: Canada's Housing Market
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- čas přidán 26. 07. 2024
- Is there a housing bubble? Or have prices just gone up? Our Bottom Line Panel answered some of YOUR questions, tonight.
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I was born and raised on the west coast and Ive pretty much come to accept that I may never own a home here... The homes that used to be for people that live here and care about the community are instead being sold to rich Chinese investors who dont care about BC, and dont care about the communities. They see it as a business move and a chance for quick profit. Many neighbourhoods have empty homes that just sit and increase in value and they just change owners. Its not about Canadians having homes to raise a family any more.. its about rich Chinese people making profit. And like everything else in the province, the BC government doesnt give a shit as long as they collect their quick profit. Even renting is becoming difficult. Vacancy rates are less than 1%. Theres bidding wars on rentals. Renting to pet/dog owners is basically non-existent any more being as there are waitlists of people wanting to rent. Why are we selling out our own country? Do we not care about Canadians anymore? Do we want communities or commodities? This is stupid. Our governments should be ashamed of themselves.
OK, if there is no housing bubble, then allow interest rates to rise. Our dollar is down 40% in under 2 years, surely it is time to raise interest rates. See how their lies don't hold water? If rates go up 1% housing prices would plummet. Is their a bubble? Raise interest rates and find out, that is the test. We all know the BoC is terrified of that, so yes, by their actions they admit there is a bubble. They even admit Canadians will have to tolerate exceedingly high inflation this year, hmmm, but they won't raise rates to tackle it. Watch what they do, not what they say.
Did you look at rates around the world? Canada has the highest, except for australia. So much for your argument. The problem lies elsewhere and there's no solution in sight. Everybody else is trying to devalue their currency to stay competitive, by lowering rates. If rates go up in the US, economies around the world will implode, but Canada will not be one of the first so we can keep the 'safe haven' status for some time yet. In the end something will have to give, but we're nowhere near that point yet. Stay out if you can't take the heat, but my guess is, you will be in trouble anyway when the world economy crumbles if it takes Canada down with it.
Exactly my view on this issue. They keep saying our housing market is stable.... then why is our interest rate below 1%? And why do they absolutely refuse to raise it even a tiny bit? Every time our economy takes a hit their only solution is to lower interest rates EVEN MORE.... to the point where there has been mention of NEGATIVE interest rates. Like come on. If the only thing keeping our market stable is damn near 0% interest then our market IS NOT stable. It is FULLY in a bubble. Historically interest rates hover between 5 and 10%... could you imagine what an interest rate of 7% would do to this country right now? They need to stop putting off the inevitable and just make the damn correction. The longer we go without a correction the more disastrous the correction is going to be when it finally happens. I am 28, and with the current insane prices I literally hardly know anyone who owns property. But the few friends I do know that recently bought have all their life savings and everything poured into it... counting on it as an investment of course. They are stretched thin financially and are house-poor.... any type of dive in the market would ruin them and Ive warned friend about this. Its frightening but the longer this goes on the worse its going to be when it finally happens!
Excellent topics discussed, and I loved the slightly more casual style of the web extra section. I recommend guiding your television viewers to this channel by letting them know there is more to this topic online. Do this with other popular segments such as at issue and watch your online audience grow :)
Also, do you have the link for the one panelist's video on renting versus buying?
Thanks!
Great set of questions on the segment tonight. I hear a lot of these on a daily basis, and it's good to have a discussion about it. However not all answers are straightforward and definitely need some consultation on a face-to-face basis.
Thanks for the great information, It'll be a few years till I am in the market, but it always helps to think ahead. Good job CBC.
Robert Derusha What great information? I must have missed that part. I stopped listening when they said: save your money!
Update I watched the entire video JAMIE HARBINSON is 40 but like most people they end up dying broke. If you want to die broke simply go out and buy as many houses as you can in the most overpriced cities such as Ottawa. Good luck JAMIE you'll love working into your 90's to pay off mortgages on homes worth less than what you paid for them.
It is wierd when a combine income of $120,000 can not afford to live in the city they work in. you know there is something wrong about it. unless most people are earning above 200,000 and they are buying up all the houses but that is not the case.
Lots of people making 100k, so my guess is, yeah, there are enough 200k families that can purchase the few homes that come to the market. For 120k a year, there are many homes in Scarborough that they can afford. Don't like it? Why, it's still Toronto, you can take the TTC to get to your job.
TIME 14:10 TO 14:35 ON THE VIDEO IS MAKING A BANK CANADA INTEREST RATE SEPARATE AND SPECIFICALLY ONLY FOR THE HOUSING MARKET A SOLUTION?
Those central bankers have set the nets large and wide and got lots of highly leveraged fish to reel in once they start dragging in the nets by raising rates.
Two years ago, and we still talk about the "bubble". When is she going to burst?
Nobody is talking about this simple truth: there are still affordable condos (housing of the future) and townhomes in 'ethnically diverse' areas in Toronto. But no, we don't want those, we want the more 'desirable', established neighborhoods... well what does that say about the 'bubble'?
Please give suggestions if you can. It is now March 2017 and there is not bubble but there is, hmmm OK, I have a house worth $600k and mortgage of $190k I am in pickering and would like to know if I should:
A) Sell now that is high, pay off mortgage and buy small house or rent? condo?
B) If buying, I would like to buy a small but in a safe area for $450k so I can pay off most of my mortgage. Where would you recommend?
I saw a condo in scarborough for $160k! but it is in the kingston rd and Galloway rd which some ppl think is a bad area, any feedback?
Thanks :)
Manny M Have you considered living abroad in countries with a lower cost of living?
It's funny how the debate has changed, fifteen years ago news agencies like this would have promoted and promoted buying a house and how to do it... now Renting is the better option.
BombasticLove87 They didn't. The 'bubble' talk has been a constant for 15 yrs, almost as soon as prices rose about 20% from the bottom of 22 years ago!! That kept many from buying the house that they really wanted and could afford while at the same time investing in pieces of paper that give you part ownership of such great companies as the Dollar Store, Krispy cream and Tim Hortons.
It seems like, at the moment, renting IS the better option, particularly if one is planning on keeping a home for a period of time. Its a game of musical chairs right now... the music keeps playing and the real estate market game keeps going... buying and selling quickly for quick profit is the aim of the game. However, investing in a home in the long term could be catasrophic. Imagine a young couple, scraping up every last penny to make their down payment on one of these insanely prices homes... then they have an expensive mortgage that has them stretched completely thin paycheque to paycheque. Suddenly the bubble bursts, interest rates go up.... Their mortgage payments are suddenly 1/3 higher and the value of their houses drops by 1/3. That would destroy a young family. And this could be the reality of THOUSANDS of young families/home owners. Atleast renting you are staying completely clear of the shitstorm and although you have no chance of making financial gains, you have zero risk of losing it all, so to say. Until there is SOME correction in the market and interest rates come up a bit to a realistic level Id prefer to stay completely clear of this game. Because it basically is a game right now. Its sad that canadian homes, something that is supposed to be about people's lives and raising families, have instead become just a commodity, traded and manipulated, mostly by the wealthy, to make quick profit. Hopefully eventually, when this all dies out, it will go back to being about people having homes to raise families again.
Sirus778
Wow, you know so much about the future, you must be rich by now, no problem paying any price I suppose.
Tudval Stone Huh? What are you talking about
If you think Canada's market is going to crash, I wouldn't jhold me breath. They've been saying that for the last 10 years. And though we've seen 2 corrections over the last 2 years, we are no past the correction and trending upwards. DOn't get me wrong, I can't believe how much it keeps going up, but the demand IS INSANE, and the supply is incredibly tiny. (toronto market)
Holy shit, sound points from the economists here. These guys are actually worth their salt and aren't pumping houses as investments.
I love Amanda.... :)
I agree that no one keeps information on how many properties are purchased by foreign investors through Canadian companies or strawman buyers. However I would think that a property bought for wealth preservation by foreigners is less desirable for the economy as the condo or house is left vacant and mortgage free. In contrast an investor would rent the property relieving the upward pressure on rents as well as a multiplier effect on the local economy as renters spend their pay cheques. A vacant condo doesn't order pizzas and drink beer. An indicator of properties held just for wealth preservation is to ask the electric company how many homes are consuming enough power just to turn the fridge over each month. I think that's what people want to know and not the race of the person.
You can't have a "bubble" without over supply. Until that happens we just have expensive housing. Yet, a glut of housing can appear very quickly which may precipitate a rapid fall in prices to a much lower value than pre-bubble levels. If you're worried about getting caught in a deep down turn, then watch the Months of Inventory, the Sales to New Listings ratio and the Days on Market as these are the precursors to a fall in prices. For those without access to this in depth data, you could simply look at how many for sale signs are in your area and how long they stay up for sale. Or contact an unbiased source such as a real estate appraiser.
Gordon Cavanaugh Those indicators are pretty much useless as they have predicted the last 5 out of 1 downturns. Much better to watch government and central banks actions, not the Micky mouse steps they took to cool off the RE market, but major blunders like they did in '89 or in the US in 06-07.
+Gordon Cavanaugh Think again, with zero move up buyers you don't even have a housing market. This can only crash and crash hard. The smart people are leaving Canada to leave the morons to fund the trillion dollar deficit the taxpayers will be paying for all the house foreclosures and personal bankruptcies.
with all of these stories on CZcams about the housing problem.i don't know but I would say if you follow the paperwork if you have your name on any mortgage you can not buy...if you don't live in Canada..you cannot buy.if you are not 22 years old you cannot buy...you must live there a minimum of 5 years.if you move before than you get hammered with a high tax.there is way to many people sleeping in the same bed if you know what I mean.
It's bin going up for over thirty years even if it drops 50% it's still expensive.
I agree
Anwar Nayani yea actually even if it drops 80% it's still expensive. Average detached homes are 1million+ and 2 bedroom condos are now 400-600k. In the city.
the solution is to shift our tax structure away from income onto properties. eliminate income tax all together and shift it to property tax so that the people that are working in the country is not subsidizing for people that are not living here.
Can some one kindly tell me the name of the brown guy? He has a CZcams channel?
His name is Preet Banerjee. He does have a youtube channel. Just search his name.
In this video, investors trying to create demand for the houses they can't find tenants for.
I agree
Interest rates will go up when they're sure it won't result in an economic apocolypse. If oil goes up and Canada can grow without stealing it from the USA, then perhaps it will go up very slowly.
Reality is we're all going to die one day don't expect to buy and make money. If it happens then great, but think of buying because your going to own it and live in it.
Do not forget the drug trade and casinos, and money laundering.
I watched it till they said that the best plan was to save your money. What? We are drowning under a sea of fiat currency and they say ``save your money``? Great plan, I had not thought of it! The only question I have though, what do we do with all the central bankers that keep printing money and diluting those who are saving money?
The real solution is for people to realize that this society does not need everyone to work. It just needs to redistribute the wealth better so everyone has what they need. Then we do not need to go to war with other countries to steal their stuff. Wow, I think I just found the solution. Thanks everyone, good thing I was here to help. Let me know if you need my help again in the future.
+David Frigault
I think the biggest problem is that everyone wants to make as much money as they can. So what if you sell your house for 1 million dollar. First thing that happens is you pay a lot of taxes. Then you have to buy a new house that is gonna cost you just as much, so you end up paying a lot of interest. How does that help you?
It would be in everyone's best interest that housing prices would go down, not up. Yes everyone would be a little poorer but in the end, they would have affordable housing. They would pay less taxes. It is just counter intuitive. We would be better with 200 000 dollars in our pocket in a world where houses are worth 200 k. Than have 1 million dollar in a world where houses are worth 1 million. Because of taxes and interest.
Its just that you never have anyone in society asking for less, everyone wants more. This is probably a part of the reason why we are so poor. Because the people in charge also want to have more than everyone else so they make laws that are totally unfair. Its a whole change of our paradigm we need.
David Frigault Whatever way you want to setup society is ok. The only problem is when everyone is out for themselves, they find ways to mess up even the best laid plan. You can never have a fool proof solution. Because fools are remarkably ingenius. They always find a way to go around the protection you put in place to save them.
Although I think discussing this is a step in the right direction. Having an open mind is a way to get away from all this modern foolishness we have.
Again, I am not opposed to renting but the main problem is energy prices. The governments suppress cheap energy very effectively. See how the Saudis are lowering oil prices to attack shale drilling and canadian oil sand? They want higher energy prices so they are willing to hurt the competition even if it hurts them also. This is the sad society we live in today.
Everyone wants more so everyone has less. Narrow minded thinking. There is enough for everyone folks ! Its like when I pet my mother`s dogs: they get so excited that I have to stop playing with them. Totally counter productive. We do the same as human beings.
David Frigault Well, I understand your idea about making better laws. This is a very good thing that you would care about this so much. The only thing though is that we need to change the way we look at things more than we need to change the things themselves.
For example, if I am the government of canada and I decide to give 1 billion dollar to someone. It does not actually matter as long as they keep their money in canada. The government will have it all back in taxes by the time the person dies. So in the end it does not matter that much.
It is difficult to explain this to people, that there is more than enough money and houses for everyone but people do not want to share. The rich wants to get richer and the poor are just desperate to survive. It does not really have to be this way. Changing laws will help if we can also help people to open their mind.
I am not really christian but Jesus once tried to explain it to a crowd. That in the house of his father, there is enough for everyone. It is the story about the son that left his father and came back after wasting all of his inheritance. The prodigal son I think it is called. That is what I am trying to discuss here.
David Frigault Very well said. Also though, it might not be really about inflation, although I do understand your argument. The other side to this problem is purchasing power. For example imagine that all canadians got richer all of a sudden without printing money. The prices would go up BECAUSE we are rich. The vendors of products would know we can afford it so they would charge more.
So I think we understand the same thing and put it in different words. So now that I am understanding this, I try to focus more on improving myself as a person so that I can become the change that I want to see around me. I am glad though that I have been able to share ideas with someone who understands inflation etc... My mother, bless her soul, does not understand all this financial mumbo jumbo and she is my main confidante.
P.S. Also if you have noticed, when they lower the interest rate, the price of homes go up and the stock prices also. Simply because when we have to pay less in interest on our mortgage, the price of homes go up because buyers have more room in their budget. So they can afford to pay more. The people who are selling their homes can then adjust their prices to make sure they have enough to buy the next home they are moving into. Bottom line is, everyone is still stuck in poverty. Silly stuff.
David Frigault I am aware of this idea where the bank should not control the money supply. What I think is also a problem is simply the amount of debt in the system. So the banks invested billions in the energy sector. Now if a new technology comes along and make the price of oil very cheap. The banks that have invested in out dated fossil fuel would go under, I think. All the economy that was built on oil just goes away like the dinosaurs. This is the reality they are faced with today. They do not want to admit they have cleaner alternative to oil and coal or uranium for that matter. They put big bucks into the old economy. This is why this system is so difficult to change. Big investment in outdated ideas.
these caller's sound like cheap paid actor's lol
What about the many muslims that came lately, won't they improve the economy?
Cheap money always creates massive real estate bubble. Thailsnd 97 Asian crisis spawned glut in hi rise buildings. Now we have China ghost cities and victims of so called umbrella loans.
And the Chinese have upset the market to the advantage of a few. Real growth has to be traced to real products made and sold! Not like very speculative real estate- much like the stockmarket today which is a manifestation if the QE money. Or you can call it a QE bubble. You dont really own another property by taking out money from somewhere to finance it hoping it rises! Home ownership is never a piggy bank like they make us believe.
+roylikesitlikethat What happened with German and Japan? Cheap money didn't do anything but make evryone poorer.
Would anyone else like to get some real news rather than this say-nothing "reporting"?
Bad Advice
Toronto’s Real Estate market is still one of the cheapest in the world when considering the wolds top cities (which Toronto is apart of). The market will not correct for those who cant afford, it will keep on going higher and higher as more global wealth is created and that wealth is more or less placed in secure economies like major cities in Canada, America, Australia, and the UK.
Those who can’t afford still have options… Move Farther away. You adjust for the economy not the other way around. Our problem is nowhere near Cities like Bejing, Hong Kong, Singapore, Tokyo, New York, California cities, London, sydney, and alot more. Stop crying people, work harder if you want to live where you want (buy a house and rent every other room if you must) people come here with nothing and in 10 years pay off there house.
Your an idiot. The housing market has been propped up by the Chinese money. It is going to collapse. You can only delay the inevitable housing crash for only so long.
I bet your waiting for it to collapse. You remind me of some people I know who waited the past 5 years for it to crash and missed out on 500k of appreciation. if it crashes it will crash no more than 5-10% nothing to make rash decisions about
Give it enough time. History will repeat itself.
Lambro of
Hi Lambro, just saw this video and your remark. You made a very good judgement about toronto housing market. Sadly I kept missing the condo market in Vancouver or Toronto these past few years and just bought a condo in Mississauga the end of last year even if the price had gone up more than 30% compared with the price in 2015
bullshit constant bullshit