Yeah, housing can’t be an investment AND affordable. Investments have to grow faster than inflation. Affordable things can’t do that.
That being said it’s hard to blame “homeowners” because the goal is to make more people into homeowners, it’s kind of backwards to antagonize the goal itself.
Certainly though the current perception needs to change, you don’t buy a house as an investment, you buy it so that you get to keep your “rent” as equity, and you get to lock down your “rent” over 25+ years so that it effectively gets cheaper in relation to your income.
You blame the homeowners not for owning, but for supporting policies that maintain their investment.
Even the rent as equity shouldn’t be significant, the actual house depreciates over time and requires repairs to keep it’s value. The most important change needed is to make it so that owners NEVER benefit from the value of the land increasing. This can be done in a number of ways, from regular property taxes to applying capital gains to property value.
Respectfully, fuck you. Should I rent instead of owning so the ratio of landlords to homeowners goes up? The fact that only 65% of residential properties are owned by the occupant that is already alarming and shows that NON occupants are using houses as investments.
If the “value” of my townhouse goes up then great, if the cost of housing stays exactly the same for the next 10 years but the cost of living drops to match wages I would be thrilled.
Respectfully, fuck you. You’re desperately under-educated on this topic. 65% is near a record high ownership percentage, and if you count people instead of properties the number is even higher (owners have higher average family size)
The vast majority of the remaining 35% is made up of dedicated rental apartments, which of course are owned by investors, any rental by definition has to be an investment.
The thing is that people don’t even really want the ownership rate to be higher than that. There are a thousand and one reasons why someone would want to rent instead of own, from being a student, to living in a care home, to even freeing yourself up to be able to move for your career or romantic life. Renting is usually a lot easier than owning. Even when homes were dirt cheap, ownership never went to 80% or anything.
The current problem isn’t the percentage, it’s the cost.
What we really need to do is control land values, they can’t continue going up if we want affordable housing. We have to implement policies that drop land values, primarily by taxing land use. It’s the only possible route to affordable housing.
What’s true, and scary, is that while 60% of Canadians own homes, almost half are Boomers and more than half are Boomers and elder Xers, and they’re looking to cash out because the death of the defined-benefit pension (and frankly, pensions in general) combined with low interest rates on bonds, shrinking dividends in favour or stock price growth and repeated recessions that sapped their investment holding means that house equity is the only way these people can afford to retire.
I work at a company that sells to LTC and private healthcare, and let me tell you, the executives that run those businesses are looking to make huge amounts of money by soaking old Boomers for every red cent.
When enough of them cash out, and with younger Xers, millenials and zoomers priced out, expect the market to crater.
The best time for the governments of this country to do something about this was twenty years ago when things started to get overheated in the GTA and GVA. But the money was too good, so they let the tumour progress a bit, and now they risk killing the patient.
It was 60% in the 90s, when houses were last affordable (3x household income)
I disagree that the market will crater(though that depends on your definition of crater); even Japan which went through this same situation decades ago never even saw prices drop in half from their crazy high peak in the 90s. They’re only down about 25%, but they did get as low as around 45%. While those may seem like very good numbers, it wouldn’t even come close to making things affordable (3x household income)
Between population growth, and many of those boomers dying and leaving the properties to their kids, there just isn’t a way for the whole thing to crater. It may drop a bit, but most likely it’s just going to level off and stay unaffordable.
I’ve said it before, I’ll say it again.
The biggest problem isn’t landlords, it’s normal land owners.
Around 65% of residential properties in Canada are owned by the people who live in them.
These people expect government policy to allow their property value to increase, and would vote out a government that tanks their home value.
So that’s what governments deliver, and prices keep going up.
Yeah, housing can’t be an investment AND affordable. Investments have to grow faster than inflation. Affordable things can’t do that.
That being said it’s hard to blame “homeowners” because the goal is to make more people into homeowners, it’s kind of backwards to antagonize the goal itself.
Certainly though the current perception needs to change, you don’t buy a house as an investment, you buy it so that you get to keep your “rent” as equity, and you get to lock down your “rent” over 25+ years so that it effectively gets cheaper in relation to your income.
You blame the homeowners not for owning, but for supporting policies that maintain their investment.
Even the rent as equity shouldn’t be significant, the actual house depreciates over time and requires repairs to keep it’s value. The most important change needed is to make it so that owners NEVER benefit from the value of the land increasing. This can be done in a number of ways, from regular property taxes to applying capital gains to property value.
Agreed. Nimbys do so much damage.
Respectfully, fuck you. Should I rent instead of owning so the ratio of landlords to homeowners goes up? The fact that only 65% of residential properties are owned by the occupant that is already alarming and shows that NON occupants are using houses as investments.
If the “value” of my townhouse goes up then great, if the cost of housing stays exactly the same for the next 10 years but the cost of living drops to match wages I would be thrilled.
Respectfully, fuck you. You’re desperately under-educated on this topic. 65% is near a record high ownership percentage, and if you count people instead of properties the number is even higher (owners have higher average family size)
The vast majority of the remaining 35% is made up of dedicated rental apartments, which of course are owned by investors, any rental by definition has to be an investment.
The thing is that people don’t even really want the ownership rate to be higher than that. There are a thousand and one reasons why someone would want to rent instead of own, from being a student, to living in a care home, to even freeing yourself up to be able to move for your career or romantic life. Renting is usually a lot easier than owning. Even when homes were dirt cheap, ownership never went to 80% or anything.
The current problem isn’t the percentage, it’s the cost.
What we really need to do is control land values, they can’t continue going up if we want affordable housing. We have to implement policies that drop land values, primarily by taxing land use. It’s the only possible route to affordable housing.
We’re actually at the lowest since the dotcom crash, and it’s been dropping steadily.
What’s true, and scary, is that while 60% of Canadians own homes, almost half are Boomers and more than half are Boomers and elder Xers, and they’re looking to cash out because the death of the defined-benefit pension (and frankly, pensions in general) combined with low interest rates on bonds, shrinking dividends in favour or stock price growth and repeated recessions that sapped their investment holding means that house equity is the only way these people can afford to retire.
I work at a company that sells to LTC and private healthcare, and let me tell you, the executives that run those businesses are looking to make huge amounts of money by soaking old Boomers for every red cent.
When enough of them cash out, and with younger Xers, millenials and zoomers priced out, expect the market to crater.
The best time for the governments of this country to do something about this was twenty years ago when things started to get overheated in the GTA and GVA. But the money was too good, so they let the tumour progress a bit, and now they risk killing the patient.
“lowest” 69 -> 66.5%
It was 60% in the 90s, when houses were last affordable (3x household income)
I disagree that the market will crater(though that depends on your definition of crater); even Japan which went through this same situation decades ago never even saw prices drop in half from their crazy high peak in the 90s. They’re only down about 25%, but they did get as low as around 45%. While those may seem like very good numbers, it wouldn’t even come close to making things affordable (3x household income)
Between population growth, and many of those boomers dying and leaving the properties to their kids, there just isn’t a way for the whole thing to crater. It may drop a bit, but most likely it’s just going to level off and stay unaffordable.