183
Canada likely sitting on the largest housing bubble of all time: Strategist - BNN Bloomberg
(www.bnnbloomberg.ca)
this post was submitted on 23 Aug 2023
183 points (96.0% liked)
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I’m ready for this bubble to pop.
The last time a housing bubble popped, so did the entire economy.
You sure you're ready for that?
One hundred percent.
This isn't just some overvalued tulip in need of a correction. People need homes and can't afford to exit the housing market entirely. If people can't afford housing, that means they can't really afford anything. Expect the economy to have collapsed. Wages and employment will be down. Home ownership will decline.
Only those with capital to ride out a bumpy economy will be able to snatch up the cheap housing.
The solution to our housing crisis is not to tank the economy. The solution is to tackle the supply of housing, income inequality, and corporate equity in residential real estate.
No one is ready for a depression. We need it tho. We can’t keep doing this.
It’s either depression or severe dystopia. Pick one.
The longer we put it off, the worse its going to be
I'm starting to think you have too much to lose to care for people not being able to live because houses are too expensive.
Finance is not the economy. And housing should not be a free market. That's the whole problem with it today. When you make housing a finance product, you get what we have today. It's fucked up and it needs to be collapsed and redone.
Agreed. We should regulate it. First, we should zone areas of land as only being for certain types of homes. This will ensure that the detached mansion you always dreamed of will not be usurped by some developer wanting to build condos. Next, we should regulate the structures so that someone doesn’t try to build a small/tiny home where you want your glorious mansion. Third, we enforce only one structure per property. Your mansion needs a sizeable backyard for your pool! I have more ideas, but think that’s a good start.
Oh wait.
Ok but I am
The current economic state isn't exactly great for the average person either. Especially young people trying to start careers and leave their parent's house.
Regular people already can't afford housing. Almost anyone owning a house is a millionaire, or has borrowed a million from the bank as a mortgage.
The former will survive just fine. The latter took a tremendous risk by borrowing a million dollars to buy properly in an overheated market. If it works out then they can enjoy the fruits of their high risk play. If it doesn't work out, then they should suffer the consequences. That's how all risks work.
Not the same at all. The previous housing bubble was a result of widespread fraud by the banks. Now, people know very well to look out for that exact thing happening, and it isn't.
If there is a bubble right now, which there probably is, it is a speculative bubble. People believe that housing will forever quickly grow in price, so they are willing to pay above reasonable price to not miss out on the opportunity. Which in turn increases the prices further. It's a self-sustaining cycle, but at some point there won't be enough capital to sustain it any longer. Can happen in a year, can happen in a decade, can happen tomorrow.
Yes, I am ready for that. I don’t buy this “but the economy” line. It smacks of “too big to fail”, and I think that occasional failure is necessary and healthy.
You haven't lived through enough cycles then.... Even 2008 saw a million people in Canada lose their jobs. The one in the early 90s was probably double that.
Besides, nobody understands what the real numbers would even be. Do you know how much of an implosion is required to return Vancouver or Toronto to "affordable" levels? Prices would need to drop something around 80-85%. That's absolutely massive, and would wipe out the life savings of 10 million Canadians, who are now going to need more government support to make it through retirement.
There are ways to fix this problem, but they need to be gradual to not end up causing more problems than they fix.
Same. Burn it all down. I’m tired of paying my landlord the equivalent of a mortgage for fuck all security because I don’t have enough for a downpayment.
We really have to be taxing the hell out of the rich like we did in the "make Canada great again" days, if we want a cushion for this crash.
Yeah, this.
A crash isn't a bad thing if you can build a firewall against profiteering. Governments could buy property, instead of allowing the wealthy to, and governments could force the rich to take a haircut and/or tax the hell out them and then spend our way out of recession.
It won't happen, but it isn't impossible or even improbable.
Government decides who pay taxes. Shitty governments decide everyone pays the same. Good government redistribute.
In the early 20th century people responsible for crisis, bubbles and stuff were severly punished. It can be done.
Also, you should get familiar with the story of the boiling frog. Wishing things won't get worse will only get you dead eventually.
Every damned time. Replace 'lap' with 'counter' and 'notice her' with 'stop her from knocking something off' #ragdoll
TIL how to poach brains
They remained more affordable, for a time. And then housing prices went right back through the roof.
I bought a foreclosed house in 2012 for ~280k. It had been purchased by the previous owner for about 480k.
I put about 150k into it, 100k the first year to make it a liveable property, and 50k or so over the next ten years.
I sold it last year for about 850k...
I then bought a new house that cost about 450k when it was built 4 years ago, for about 680k, in a less expensive market.
I’m ready for it to pop and the consequences thereof. I know I will have to shoulder some of the burden. Too bad that businesses love to privatize gains and nationalize risks, but that’s the mess we’re in.
To copy another of my comments, I don’t buy this “but the economy” line. It smacks of “too big to fail”, and I think that occasional failure is necessary and healthy.