Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

Femtosecond: Aug 2, 2003

Feels like lots of pieces being put in place to end restrictive zoning and open up SFH areas to small apartments. BC has a housing report on the shelf that suggests a bunch of ways to liberalize housing and build more and now Ontario has one too.

quote:

Why a 4-storey apartment could be coming to a residential street near you

The task force asked to find ways to make Ontario housing more affordable wants to do away with rules that entrench single-family homes as the main option in many residential neighbourhoods, according to a draft report.

The nine-member Housing Affordability Task Force, chaired by Scotiabank CEO Jake Lawrence, wants to "create a more permissive land use, planning, and approvals systems" and throw out rules that stifle change or growth � including ones that protect the "character" of neighbourhoods across the province.

The wide-ranging 31-page draft report, which is making the rounds in municipal planning circles and could look much different when it's officially released Jan. 31, makes 58 recommendations.

It includes discussions on speeding up approval processes, waiving development charges for infill projects, allowing vacant commercial property owners to transition to residential units, and letting urban boundaries expand "efficiently and effectively."

It also calls for all municipalities � and building code regulations � not to make it just easier for homeowners to add secondary suites, garden homes, and laneway houses to their properties, but also to increase height, size and density along "all major and minor arterials and transit corridors" in the form of condo and apartment towers.

But perhaps the most controversial recommendation is the one to virtually do away with so-called exclusionary zoning, which allows only a single-family detached home to be built on a property.

Instead, the task force recommends that in municipalities with a population of more than 100,000, the province should "allow any type of residential housing up to four storeys and four units on a single residential lot," subject to urban design guidance that's yet to be defined.

According to the report, Ontario lags behind many other G7 countries when it comes to the number of dwellings per capita. And housing advocates have long argued that more modest-projects � duplexes, triplexes, tiny homes and townhouses � are needed in established neighbourhoods, especially if the environmental and infrastructure costs of sprawl are to be avoided.

But neighbourhood infill and intensification is often a hard political sell.

"While everyone might agree that we have a housing crisis, that we have a climate emergency, nobody wants to see their neighbourhoods change," said Coun. Glen Gower, who co-chairs Ottawa's planning committee. "So that's really the challenge that we're dealing with in Ottawa and in Ontario."

After last week's housing summit with Ontario's big city mayors, reporters repeatedly asked Municipal Affairs and Housing Minister Steve Clark if he supported doing away with zoning for single-detached homes, as other jurisdictions like Edmonton and major New Zealand cities have done.

Clark said he'd heard the idea but did not give a direct answer one way or the other.

Many of the recommendations revolve around making it easier and faster for builders to construct homes.

According to the draft report, not only would a streamlined process allow dwellings to get on the market faster, but reducing approval times would also save developers money which, in theory, could be passed onto residents.

The report cites an Ontario Association of Architects study from 2018 showing that costs for a 100-unit condo building increase by $193,000 for every month the project is delayed.

That's why, for example, the task force is recommending that any "underutilized or redundant commercial properties" be allowed to be converted to residential units without municipal approvals.

The draft report also calls for quasi-automatic approval for projects up to 10 units that conform to existing official plans and zoning, and goes so far to recommend that municipalities "disallow public consultations" for these applications.

The report speaks to reducing what the task force characterizes as "NIMBY" factors in planning decisions, recommending the province set Ontario-wide standards for specifics like setbacks, shadow rules and front doors, while excluding details like exterior colour and building materials from the approval process.

The task force would even eliminate minimum parking requirements for new projects.

The report touches on a number of subjects it believes unnecessarily delay the building of new homes, including how plans approved by city councils can be appealed.

It recommends the province restore the right of developers to appeal official plans � a power that was removed by the previous Liberal government.

And in an effort to eliminate what it calls "nuisance" appeals, the task force recommends that the fee a third party � such as a community group � pays to appeal projects to the Ontario Land Tribunal should be increased from the current $400 to $10,000.

That doesn't sit well with NDP MPP Jessica Bell, the party's housing critic.

"My initial take is that any attempt to make the land tribunal even more difficult for residents to access is concerning," said Bell, adding the NDP is asking stakeholders and community members for feedback.

The tribunal can overturn a municipal council's "democratically decided law," she said, "and I would be pretty concerned if it costs $10,000 for a third party to go to the land tribunal and bring up some valid evidence."

While she was pleased to see the task force address zoning reform to encourage the construction of townhomes, duplexes and triplexes in existing neighbourhoods � the so-called "missing middle" between single-family homes and condo towers � Bell said increasing supply is not enough to improve housing for all Ontarians.

"We need government investment in affordable housing," she said.

"We need better protections for renters, and we need measures to clamp down on speculation in the housing market � We need a more holistic and comprehensive approach than what we are seeing in this draft report right now."

(While the task force was directed by the province to focus on increasing the housing supply through private builders, it acknowledges in the report that "Ontario's affordable housing shortfall was raised in almost every conversation" with stakeholders.)

From his first reading of the report, Ontario Green Party leader Mike Schreiner agreed with the zoning recommendations but said streamlined processes need to be balanced with maintaining public consultations and heritage designations.

"One of my concerns with my very quick read of the draft report is that it talks about expanding urban boundaries � and I'm opposed to that," he told CBC.

"We simply can't keep paving over the farmland that feeds us, the wetlands that clean our drinking water [and] protect us from flooding, especially when we already have about 88,000 acres within existing urban boundaries in southern Ontario available for development," he said.

Schreiner said he's also "deeply concerned" that the report discusses aligning housing development with the province's plan for Highway 413 in the GTA.

"I simply don't think we can spend over $10 billion to build a highway that will supercharge climate pollution, supercharge sprawl, making life less affordable for people and paving over 2,000 acres of farmland, 400 acres of the Greenbelt and crossing over 85 waterways," he said.

According to the draft, the task force consulted with builders, planners, architects, realtors, labour unions, social justice advocates, municipal politicians, academics, researchers and planners.

Looks like Ontario is taking a page from New Zealand here.

The one gross idea here is expanding urban boundaries. You didn't see that idea floated in the BC report.

# ? Jan 25, 2022 17:35

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# ? Apr 23, 2024 08:41

leftist heap: Feb 28, 2013; Fun Shoe

I assume the Ontario government wants to implement even less than the BC NDP does.

# ? Jan 25, 2022 18:09

Femtosecond: Aug 2, 2003

BC has been very quiet since receiving their report from their expert committee.

Municipal elections are in late October of this year.

It makes sense to me for the BC government to float some trial balloons before then, saying that they're considering implementing x, y, z, so as to make this a topic of conversation during the municipal elections. Voters should know beforehand if they're electing someone who is gonna fight the government or go with them.

Alternatively the government might just not do anything until elections are over, then just dump the policy on all the new governments. "Congrats on getting elected! You're doing this btw."

# ? Jan 25, 2022 19:20

Slotducks: Oct 16, 2008; Nobody puts Phil in a corner.

If you don't have any latent health issues or precursors for health issues, the world is your oyster. Halifax seemed really cool when I visited.

That said, if you have health issues, I'd suggest somewhere in Ontario or BC.

# ? Jan 25, 2022 19:31

qhat: Jul 6, 2015

tagesschau posted:

There are plenty of distractions in my apartment, but there also plenty of distractions at work due to it being an open office plan. And when 99% of what everyone does is computer touching, my location is completely irrelevant as long as it has a good enough Internet connection.

I don't want to never see my coworkers again, but it's annoying as hell to be forced into the office for the sole purpose of keeping up appearances and pretending it's still 2019.

Between the hugely overpriced housing, moderately overpriced everything else, and putting the screws to workers who try to escape either of those things, Canada seems like it's leaning more and more into a company-town mentality.

That's fine, but it just does not work for a lot of people. At least in my workplace there's no shortage of people who are done with WFH and want to get back in ASAP, and there are plenty who want to stay WFH. There's no reason to stop people from working remote, I just know that I never ever want to do it again because I just don't have the personality type for it.

# ? Jan 25, 2022 19:43

quaint bucket: Nov 29, 2007

Slotducks posted:

If you don't have any latent health issues or precursors for health issues, the world is your oyster. Halifax seemed really cool when I visited.

That said, if you have health issues, I'd suggest somewhere in Ontario or BC.

Vancouver region, yes. The rest of BC is lacking in sufficient medical care for specialists.

Had to drive or fly to Vancouver for my kids because there were no support in Northern BC. Friends tried to get care for their kids as well, didn�t get reasonable access until they moved to Alberta.

Have moved across the provinces several time for work. I would still recommend it as there are enough tax deductibles and financial support to make it worthwhile to be mobile for your career and/or family. Your point about health service still stands, though.

# ? Jan 25, 2022 21:03

Subjunctive: Sep 12, 2006; ✨sparkle and shine✨

leftist heap posted:

I assume the Ontario government wants to implement even less than the BC NDP does.

I dunno, Doug is really eager to please developers and this would unlock a lot of projects in very valuable areas. Though he seems also to be trying pretty hard to not get re-elected, so who knows?

# ? Jan 25, 2022 21:19

Testikles: Feb 22, 2009

Catch 22: appease the corporate interests you're beholden to, or piss off your bread and butter: crochety old white folks.

# ? Jan 25, 2022 22:27

mila kunis: Jun 10, 2011

qhat posted:

Rate rises are going to be coming in thick and fast soon. The markets are getting spooked about it already.

https://globalnews.ca/news/8539085/bank-of-canada-interest-rate-decision-2/

Bank of Canada holds interest rates amid surging inflation

The Bank of Canada kept its trendsetting interest rate at rock-bottom levels on Wednesday, holding off on planned increases aimed at controlling surging inflation.

The central bank�s overnight rate remains at 0.25 per cent, a rate it adopted in a drastic drop in the early days of the COVID-19 pandemic.

They chickened out LMAO

# ? Jan 26, 2022 16:36

Segue: May 23, 2007

Bank of Canada holds interest rates steady.

https://www.cbc.ca/news/business/bank-of-canada-rate-decision-1.6328104

This is literally insane to me. I recognize the complex interplay of the states not raising rates yet but goddamn we have seen wealth inequality and inflation skyrocket and we're gonna wait this out?

My savings account rate has never been near inflation my entire career, in fact getting worse.

# ? Jan 26, 2022 16:38

mila kunis: Jun 10, 2011

They will do everything in their power to protect house prices even if it means double digit inflation.

# ? Jan 26, 2022 16:40

mila kunis: Jun 10, 2011

Femtosecond posted:

For the "housing only goes up", "we're entering a new era of neo-feudalism" crowd, I can see what they're on about if we're talking about detached homes. There are many cities that are completely built out and redevelopment of those existing detached homes will be required for any new growth, which will further reduce the amount of detached homes, increasing exclusivity and price. The only way to keep a lid on prices of this sort of product is severe land value taxes to effectively make it so expensive to own a detached home that no one would ever want to.

Now in contrast there's really no limit to the amount of apartments we can make, only arbitrary political limits. You can carve up land, add more height and make apartments anywhere. I expect we're going to continue to do so at an increasingly rapid pace. It feels like we're close to a breaking point where governments finally capitulate and reign in the nimbys. If this happens we're gonna see the pace of apartment development kick up a notch.

Apartments are great in cultures/countries where apartments are desirable and the people living in them are actual owners and intend to stay there for the rest of their lives. They usually form cooperative societies/boards and while the people running those things generally do skim from the coffers, for the most part the decisions taken are done in good faith and for the good of the building/residents.

Canadian culture re: condos and apartments are completely hosed though, because the Canadian Dream is being a suburban homeowner NPC. Condos are either investment properties used as an income stream / to be eventually flipped by absentee landlords, or with people living in them who see it as a step on the "property ladder" to be eventually sold and ditched for a home. The result (anecdotal but I've personally never witnessed counterexamples) is usually really lovely condo boards, that even if they aren't riven by total corruption, are generally not interested in long term planning, poorly maintained, staving off maintenance hikes until things get out of control and you get giant gumps, and aregenerally seen as a vehicle to extract as much money and kickbacks as possible before dumping it on someone else.

That's even putting aside the construction quality, soundproofing, heating and tiny spaces of the condos that've come up in the last decade.

# ? Jan 26, 2022 16:55

tagesschau: Sep 1, 2006; Guten Abend, meine Damen und Herren.

mila kunis posted:

They will do everything in their power to protect house prices even if it means double digit inflation.

Faced with the certainty that house prices will not stay this high in real-dollar terms, why on earth would you prioritize propping up the nominal-dollar value when it doesn't actually lead to prosperity for anyone? :wtc:

# ? Jan 26, 2022 17:09

Slotducks: Oct 16, 2008; Nobody puts Phil in a corner.

tagesschau posted:

Faced with the certainty that house prices will not stay this high in real-dollar terms, why on earth would you prioritize propping up the nominal-dollar value when it doesn't actually lead to prosperity for anyone?

gently caress you got mine takes many forms

# ? Jan 26, 2022 17:14

tagesschau: Sep 1, 2006; Guten Abend, meine Damen und Herren.

Slotducks posted:

gently caress you got mine takes many forms

They don't got theirs in a high-inflation environment, though, and this screws people over who did manage to cash out at astronomically high prices.

# ? Jan 26, 2022 17:20

mila kunis: Jun 10, 2011

tagesschau posted:

Faced with the certainty that house prices will not stay this high in real-dollar terms, why on earth would you prioritize propping up the nominal-dollar value when it doesn't actually lead to prosperity for anyone?

I'm not sure what this means, maybe I'm misunderstanding you. That wasn't a moralistic "avoid inflation at all costs, i want to suck volcker's dick" take, that's a neutral observation as to the government's priorities, which is maintaining/increasing asset prices. I don't think anyone's "faced with the certainty that house prices won't stay this high", every institution - even if individuals inside them don't believe it can be maintained - has been pulled into the logic of Number Go Up, it's what the electorate and people with means desperately need to be true (event if it isn't), and what they base their decisions on.

# ? Jan 26, 2022 17:22

Autochrome: Aug 21, 2015

The rate stuff kills me. I'm not an economist but in an effort to understand all this I've been reading obsessively for the last year and I don't understand why they would do this. Oh well! So my money at the bank inflates away, the stock market is down, and only the most radioactive craters go for anything less than 50-100k over their already inflated asking prices. I guess if nothing else I'm going to build some character...

RE condo chat, the 2nd to last place we saw (that went for 100k over the ask) was a 2bd 1000sq ft condo where the strata had been presented multiple times in their depreciation report with options for how they needed to increase their fees to avoid a special assessment in the 2030s=ish, but they just kept putting it off. They couldn't come to a conclusion at their last AGM. There were 22 people in line to view it. LOL

The only silver lining for me is that I think my SO has finally burned out on the "get anything at any cost" FOMO because its just a monopoly money charade at this point, and the pressure to make a decision in a short time frame is huge. She wants to settle down (I do too), but I think where we are now is preferrable to having to make what is to my mind a snap decision during a bought of mass hysteria. My sister and her husband bought something 2 years ago and got to hum and haw over it. My parents talk about spending DAYS, WEEKS thinking about what to do about buying places and offering back and forth like some kind of caravanserai transaction. I read back in this thread in 2017 and someone was talking about getting to measure everything in the prospective house AND park their car in the garage to make sure it fit. Right now you've got maybe 2-3 days tops to decide if you want to turn yourself into the rowers from Ben-Hur for the next 30 years.

:negative:

Autochrome fucked around with this message at 17:27 on Jan 26, 2022

# ? Jan 26, 2022 17:23

tagesschau: Sep 1, 2006; Guten Abend, meine Damen und Herren.

mila kunis posted:

I'm not sure what this means, maybe I'm misunderstanding you. That wasn't a moralistic "avoid inflation at all costs, i want to suck volcker's dick" take, that's a neutral observation as to the government's priorities, which is maintaining/increasing asset prices.

It's a lot easier for them to stop housing prices from decreasing in nominal dollars than it is in real dollars. Even if when this leads to the erosion of the purchasing power of those dollars, they can pretend they stopped house prices from going down. It's going to be basically impossible for them to dictate that real estate continue to take up such the disproportionate amount of GDP that it currently does.

mila kunis posted:

I don't think anyone's "faced with the certainty that house prices won't stay this high", every institution - even if individuals inside them don't believe it can be maintained - has been pulled into the logic of Number Go Up, it's what the electorate and people with means desperately need to be true (event if it isn't), and what they base their decisions on.

You cut off the quote before "in real-dollar terms." You aren't richer if your house goes from $1 million to $1.2 million when the price of everything else has jumped by twice as much during that time, even if the government congratulates itself for making number continue to go up.

# ? Jan 26, 2022 17:34

Arivia: Mar 17, 2011

tagesschau posted:

You cut off the quote before "in real-dollar terms." You aren't richer if your house goes from $1 million to $1.2 million when the price of everything else has jumped by twice as much during that time, even if the government congratulates itself for making number continue to go up.

Wow you�re totally wrong. Scotiabank does this stuff as a job and they tell me you�re richer than you think!

# ? Jan 26, 2022 17:39

mila kunis: Jun 10, 2011

tagesschau posted:

It's a lot easier for them to stop housing prices from decreasing in nominal dollars than it is in real dollars. Even if when this leads to the erosion of the purchasing power of those dollars, they can pretend they stopped house prices from going down. It's going to be basically impossible for them to dictate that real estate continue to take up such the disproportionate amount of GDP that it currently does.

You cut off the quote before "in real-dollar terms." You aren't richer if your house goes from $1 million to $1.2 million when the price of everything else has jumped by twice as much during that time, even if the government congratulates itself for making number continue to go up.

I don't disagree that it might be impossible for them to maintain house prices at their current real values (but I don't know for sure! I ain't no economist), and I don't disagree that in real dollar terms if inflation goes up it might be impossible for house prices to keep up with it.

I'm saying the logic behind this decision is based on "will this make the homeowner electorate / investors poo poo themselves and cry for mom to change their poopy diapers" and based on trying to keep the fun times going for as long as possible, because that's the institutional logic we've been locked into even if it crumbles and dies in the face of actual reality.

# ? Jan 26, 2022 17:42

qhat: Jul 6, 2015

Logic doesn�t matter to voters, stop pretending that it does. The average homeowner is probably not worried about inflation because they think on the flip side it means their house price goes up. It doesn�t matter if it isn�t true or that they will be objectively poorer, if that�s what they think then wtf incentive as a politician do you have to go against that? Their minds will only change when it�s already too late and they are on the verge of bankruptcy, at which point you can be sure they will turn from abject free market capitalists into demanding government intervention.

# ? Jan 26, 2022 17:55

tagesschau: Sep 1, 2006; Guten Abend, meine Damen und Herren.

mila kunis posted:

I don't disagree that it might be impossible for them to maintain house prices at their current real values (but I don't know for sure! I ain't no economist), and I don't disagree that in real dollar terms if inflation goes up it might be impossible for house prices to keep up with it.

I think it pretty much has to be impossible for the party to go on forever. If house prices start to head back to a historically normal level, or wages start to go up to catch up with them ( :laffo:

), then the price of everything made in Canada will go up, making us less competitive globally. If house prices don't start to normalize and wages don't start to catch up, anyone with skills will head for places where those skills actually provide them with a decent standard of living, and Canada will become less competitive globally. Both of those things make it harder for the Bank of Canada and/or the government to keep house prices propped up.

The people who think the government can just wave a magic wand and make them more prosperous are idiots who believe in free lunch.

mila kunis posted:

I'm saying the logic behind this decision is based on "will this make the homeowner electorate / investors poo poo themselves and cry for mom to change their poopy diapers" and based on trying to keep the fun times going for as long as possible, because that's the institutional logic we've been locked into even if it crumbles and dies in the face of actual reality.

The government can pledge to make everyone above average, but it's powerless to actually do so.

# ? Jan 26, 2022 18:02

qhat: Jul 6, 2015

Nobody is disagreeing that the party can�t go on forever? That doesn�t mean that homeowners have to believe it won�t, or that they won�t immediately kick and scream if the government tries to expedite the process.

# ? Jan 26, 2022 18:14

Baronjutter: Dec 31, 2007; "Tiny Trains"

The majority of canadians have their entire financial futures and any hope to retirement or sending their kids to college or generally not eating cat food in their old age completely pinned on their house. If number doesn't go up they can't retire. If number doesn't go up they can be totally financially obliterated because their only make 100k combined but bought a 1.5 million dollar house by going up to their eyeballs in debt and then piling on even more. They've been assured by the government and society that this is the right thing to do and safe, and that they are absolutely entitled to those guaranteed equity gains.

When a massive number of the most reliably voting population are in this sort of situation, obviously we're going to get governments making the preservation of the growth of house prices their top and more sacred priority. Everything else can be sacrificed so long as house number keeps going up. Culturally we've come to view house prices as the most important economic indicator, well above wages, the stock market, or any other indicator. High house prices = economy good and government is managing the country good.

I think this will only change once there's a massive economy destroying housing crash that won't actually be good for anyone, specially not people already locked out of the market. The other option would be the gulf between homeowners and renters growing and getting so bad to the point where renters actually start voting and we start to see some incremental changes at all levels. I think we're already seeing a little of the 2nd around the world as state-level authorities start telling nimby local governments to to allow some loving housing to actually be built. I guess the question is whether or not these slow policy and cultural changes will happen before a major economy-destroying collapse.

# ? Jan 26, 2022 18:20

mila kunis: Jun 10, 2011

Renters will be outvoted, gerrymandered (probably naturally through grouping in dense areas) or suppressed otherwise. I've been planning to get out of Canada for a while now but the pandemic hosed up emigration. I think an exit is the only viable alternative for people who have a shot at being accepted elsewhere. People without are going to become serfs.

mila kunis fucked around with this message at 18:27 on Jan 26, 2022

# ? Jan 26, 2022 18:24

Femtosecond: Aug 2, 2003

Folks seem to think the first interest rate will come in March

quote:

https://financialpost.com/news/economy/bank-of-canada-holds-interest-rate-at-0-25-3

For the Bank of Canada, that�s the equivalent of declaring, �mission accomplished.� Governor Tiff Macklem and his six deputies opted to end their commitment to keep the benchmark interest rate near zero until at least the spring, suggesting they will raise interest rates for the first time in more than two years when they next update interest-rate policy in early March.

�While COVID-19 continues to affect economic activity unevenly across sectors, the Governing Council judges that overall slack in the economy is absorbed, thus satisfying the condition outlined in the Bank�s forward guidance on its policy interest rate,� policy-makers said in a statement at the end of their latest round of deliberations on Jan. 26. �Looking ahead, the Governing Council expects interest rates will need to increase, with the timing and pace of those increases guided by the bank�s commitment to achieving the (two per cent) inflation target.�

J Powell gonna announce the USA's move today soon. I would expect a similarly steady sort of announcement, saying that rate rises are coming "soon."

# ? Jan 26, 2022 19:09

Guest2553: Aug 3, 2012

If I were a neoliberal gently caress beholden to capital but wanting to maintain the perception of playing both sides, I guess waiting til march could make more sense because then you could blame the US for forcing your hand without hurting election chances too much. What's a few more weeks of inflation to anyone who doesn't already have theirs anyways.

# ? Jan 26, 2022 20:05

tagesschau: Sep 1, 2006; Guten Abend, meine Damen und Herren.

qhat posted:

Nobody is disagreeing that the party can�t go on forever? That doesn�t mean that homeowners have to believe it won�t, or that they won�t immediately kick and scream if the government tries to expedite the process.

I mean...homeowners sure disagree, because they want to think they haven't made a financially ruinous decision to buy when they did. And they vote, so the government has a vested interest in pretending along with them.

I was just pointing out that between the "economy slightly less hosed but will look bad" and "economy slightly more hosed but papered over for the moment" options, the Bank of Canada and the government are currently opting for the latter.

Baronjutter posted:

The majority of canadians have their entire financial futures and any hope to retirement or sending their kids to college or generally not eating cat food in their old age completely pinned on their house.

So they're basically betting it all on black (i.e., number go up forever). That's not an investment strategy. That's just gambling, and doesn't deserve any more respect than "GME to the moon!" or that dumb Matt Damon ad.

Baronjutter posted:

I think this will only change once there's a massive economy destroying housing crash that won't actually be good for anyone, specially not people already locked out of the market.

If you've got investments in things that aren't as overvalued as Canadian housing, they won't take nearly as big a hit.

mila kunis posted:

People without are going to become serfs.

Like I said above: world's largest company town. Pay too much for everything, but we'll fire you if you want to move somewhere with a saner cost of living.

# ? Jan 26, 2022 20:17

sleep with the vicious: Apr 2, 2010

Housing prices in Canada can't drop without financially ruining the entire country. Realistically even a 25% drop for a long period would wreck a huge portion of our economy including tangential services like the banks, construction, plumbers etc.

I just can't see rate rises in Canada for that reason, and in the US they are wildly leveraged too but for slightly different reasons than just housing.

The government and the central banks will go to the absolute wall to prevent housing prices and big corporate profits from dropping, and that's just reality at this point. That doesn't mean prices can't stagnate in certain areas but any sustained drops won't be allowed to happen without the government fighting it every step of the way

# ? Jan 26, 2022 23:24

Oakland Martini: Feb 14, 2008; Refugee from the great account hijacking of 2008

Going back to last year's housing prices wouldn't wreck a thing.

# ? Jan 26, 2022 23:39

qhat: Jul 6, 2015

Oakland Martini posted:

Going back to last year's housing prices wouldn't wreck a thing.

He's not talking about going back to last year's prices. He's talking about a crisis of confidence in the Canadian credit market. If the banks stop lending because too many people start defaulting, it would devastate not just the housing market, but pretty much every private industry that relies on being able to borrow cheaply and consumers having money to spend.

# ? Jan 27, 2022 01:18

Oakland Martini: Feb 14, 2008; Refugee from the great account hijacking of 2008

qhat posted:

He's not talking about going back to last year's prices. He's talking about a crisis of confidence in the Canadian credit market. If the banks stop lending because too many people start defaulting, it would devastate not just the housing market, but pretty much every private industry that relies on being able to borrow cheaply and consumers having money to spend.

I just don't buy that a 25% drop in prices (which would take us to last year's prices more or less) would cause such a crisis of confidence. Prices need to drop at 40-50% to be in line with fundamentals anyway.

# ? Jan 27, 2022 02:17

qhat: Jul 6, 2015

Oakland Martini posted:

I just don't buy that a 25% drop in prices (which would take us to last year's prices more or less) would cause such a crisis of confidence. Prices need to drop at 40-50% to be in line with fundamentals anyway.

Why not? Did you not see what happened in 2007?

# ? Jan 27, 2022 02:27

Oakland Martini: Feb 14, 2008; Refugee from the great account hijacking of 2008

qhat posted:

Why not? Did you not see what happened in 2007?

Nothing much really happened to the Canadian housing market during the Great Recession, at least compared to what happened down south. Prices fell more in Toronto in 2017 than in 2008-2009, in fact, and nothing happened in terms of a sudden halt in lending or anything like that.

Besides, it's patently ridiculous to argue that we couldn't go back to where things were a year ago without everything blowing up. Things were fine then (well, they weren't really, prices were already way too high) and they'd be fine again if we went right back there.

Oakland Martini fucked around with this message at 03:04 on Jan 27, 2022

# ? Jan 27, 2022 03:02

qhat: Jul 6, 2015

I was making a point that you're being very overconfident that something like what happened in the USA couldn't possibly happen here because back to my original question, why not?

# ? Jan 27, 2022 03:04

qhat: Jul 6, 2015

Like it doesn't matter at all if prices fell to last years levels, that has nothing to do with whether there could be knock-on effects. RBC margin called a REIT at the beginning of the pandemic because their CMBSs had fallen significantly in value as a result, who's to say there aren't more bombs being sold? The fact that prices have to drop 40-50% to be in line with fundamentals makes any drop, even a small drop, in house prices more risky, not less.

# ? Jan 27, 2022 03:08

Oakland Martini: Feb 14, 2008; Refugee from the great account hijacking of 2008

qhat posted:

I was making a point that you're being very overconfident that something like what happened in the USA couldn't possibly happen here because back to my original question, why not?

I'm just saying that a price decline of that size wouldn't cause it all by itself. We're not talking about erasing 5-6 years of price growth (like the collapse in the US did), but just a single year's. That's far fewer people that could end up underwater on their mortgages. And remember, the Fed raises interest rates by 400 basis points between Q42004 and Q42006, so people with variable rate mortgages in the US had a massive increase in carrying costs. There's no way we're looking at any more than half that in the next few years here. I just don't see it.

# ? Jan 27, 2022 03:13

Oakland Martini: Feb 14, 2008; Refugee from the great account hijacking of 2008

And REITs are tricky because many of them (I don't know about this one specifically) hold commercial real estate, which was in a super sticky situation at the beginning of the pandemic with the collapse of retail, which was never true of residential.

# ? Jan 27, 2022 03:17

Hubbert: Mar 25, 2007; At a time of universal deceit, telling the truth is a revolutionary act.

mila kunis posted:

https://globalnews.ca/news/8539085/bank-of-canada-interest-rate-decision-2/

Bank of Canada holds interest rates amid surging inflation

The Bank of Canada kept its trendsetting interest rate at rock-bottom levels on Wednesday, holding off on planned increases aimed at controlling surging inflation.

The central bank�s overnight rate remains at 0.25 per cent, a rate it adopted in a drastic drop in the early days of the COVID-19 pandemic.

They chickened out LMAO

mila kunis posted:

They will do everything in their power to protect house prices even if it means double digit inflation.

Hubbert posted:

at this point, i'm pretty sure the federal government will gladly allow inflation to go wildly out of control if only to allow housing prices to escalate to infinity and beyond

# ? Jan 27, 2022 03:55

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# ? Apr 23, 2024 08:41

Crow Buddy: Oct 30, 2019; Guillotines?!? We don't need no stinking guillotines!

tagesschau posted:

Faced with the certainty that house prices will not stay this high in real-dollar terms, why on earth would you prioritize propping up the nominal-dollar value when it doesn't actually lead to prosperity for anyone?

I have no doubt in my mind that the federal and provincial governments will grind up my kids future to secure their grandmas shitbox condo future for another 6 months. (Ironically I am optimist about climate change destroying us since at least she'll be able to take her revenge.)

# ? Jan 27, 2022 05:09

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

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