- cross-posted to:
- canada@lemmy.ca
- cross-posted to:
- canada@lemmy.ca
the housing crisis has been created by banking practices that have directed excessive amounts of credit into the property market, and especially residential mortgages. As a result, buyers can bid prices up to ever-higher levels, resulting in a market where people must pay more for the same type of housing. Hence financialization can be defined as an inflationary tendency in the housing market that is induced jointly by banks’ desire to expand mortgage lending and buyers’ confidence that the value of their properties will rise.
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However, the image of a bubble bursting and prices returning to a more rational “equilibrium” level does not seem to apply to the housing market. Because housing is a necessity, people are willing to pay high prices for it. Bidding wars can therefore persist even when relative supply grows, so long as credit markets enable them.
Across Canada maybe, but Vancouver is not like that. When a place comes up for rent landlords have mentioned they have 50 applicants the first few hours that day and have to take the ad down.
This metro area is building high density housing on previous forest and farm land, and they are always snapped up quickly. I forget that stats, but something like 1000 new people move to metro area every month from other countries and provinces.
The rent is high here because of a lack of units available. Among the financial BS with banks.
In Vancouver people build a minimum 200 sq foot outbuilding in the back yard and as long as it has bicycle storage it is considered a rentable housing unit.
Let me ask you a simple question. It has a very obvious answer too.
What if 5 million units magically appeared overnight in Vancouver and they were all available at “affordable” rates, so no more than 3x median annual household income. So around $150,000k for a 1 bed condo, and around $270 for a 3 bedroom townhouse.
How long would it take for those units to be snapped up by buyers?
I’ll tell you the answer, they would be sold as soon as people could talk to their bank.
People would straight up abandon their lives elsewhere for those units. From Halifax to Hope, there would be a migration like never seen before.
And the next day, Vancouver housing prices would still be higher than those new rates, because there would still be more demand and not enough available units driving the prices up.
This is the eternal problem with supply in desirable areas, there can never be enough of it.
Greater Tokyo has 40 million people, and even with the entire country losing something like a half a million people, Tokyo’s population is stable because of constant inbound migration from other areas. The moment costs drop, or jobs become available, someone else moves in to take it.
This isn’t a random side take either, Greater Tokyo has about 3x the density of Greater Vancouver. Tripling the current Vancouver population would be around 6 million new people.
Do you know how Tokyo stays somewhat affordable for housing? The per-person average square footage for housing is like 150-250 square feet. There are entire 4 person families living in 500 square foot apartments, and singles living in units so small you can touch the walls on both sides.
It’s not about a lack of supply, or rather, there is no possible way to reach a supply level that would reduce housing prices to affordable levels.
Instead, and here’s the genius trick, you change the demand. You introduce a tax on EVERYONE in Vancouver, not a small tax, a large tax, but you don’t tax the people, you tax the land they use. Maybe $100,000 a year for a detached house in the City of Vancouver, Maybe $10,000 a year for a condo in Vancouver. That money gets refunded to all Canadians equally, even to the people who live in Vancouver. This gives people an incentive to live outside of Vancouver, and the people who do get to live there subsidize the people who don’t get to live in such a desirable location. People who want a lot of land, pay for the privledge. People who are happy to share the land pay less, or even benefit from others who don’t want to share.
Exactly, that’s why the stats of housing as an average across Canada, don’t affect Toronto or Vancouver, its a supply and demand problem locally. The other bank , rates, foreign ownerships don’t help, but we just have too few homes out here, and more and more people arrive
Did you even read what I said.
It’s not a supply and demand problem locally. In fact, it’s the opposite of that. It’s a local supply problem, with a national demand issue.
That’s why all this nonsense about supply building is so fucking useless. You can’t supply all of the houses in Vancouver that are desired from the 41 million Canadians across Canada.
By all means keep building more, but unless you tamp demand down it will not matter.
That’s what I’m saying too. People keep moving here, because who wants to live in Winnipeg. And so Winnipeg has open units and we have to create more. Empty homes in undesired locations skew the country wide average too look like we have open housing everywhere and therefore house prices aren’t a supply/demand problem. But supply and demand is exactly what drives prices up her and low in less nice regions
Except that’s not what the data says, there are more bedrooms in BC than people, not even accounting for the fact that lots of people are couples and share a room.
It’s true for every location I’ve ever checked in Canada, including Metro areas like Vancouver and Toronto.
There’s a lot of excess bedrooms that are not being used for housing people.
Yeah and no. In metro area most homes are allowed to divide basement into 2 legal suites, to maximize density. These aren’t empty.
Owner above may have a spare room when kid moves out. What I have seen is East and South Asians will often rent a room out, but whitefolk seem to prioritize single family only. That is a Western hangup.
So empty bedroom doesn’t really equate to an indendant unit on the market.
Anecdotally we have downsized as the kids moved out. We had 3500sqft place at one time , now in 800sqft condo as empty nesters.
That’s what I’m saying, there’s too many people in houses that aren’t the right size for them. It’s not a supply issue, it’s a distribution issue.
If you make 1100 dinners, and there are 1000 people, but you give two dinners to 400 people you’re going to run out before everyone gets a dinner. There’s no shortage of dinners though, it’s simply a distribution issue.
People don’t have to stay in a house that’s far too large for them. Allowing or encouraging them to do so is actually a huge problem.
My parents are a perfect example of this, they have a house with 4 bedrooms, and a suite with 1 more bedroom. They had the suite rented out, but decided they didn’t need the money so they stopped. It’s literally just the two of them in a 5 bedroom house. They also have a one bedroom cabin elsewhere. Was that 4 bedrooms useful when they were raising my sibling and I? Sure, but we haven’t lived there in 25 years.
We need policies that encourage scaling house size to family size, so that the distribution issue gets resolved. We need policies that encourage essentially force density in desirable locations. Those are the only way we solve the housing issue. We cannot, no matter how hard we try, build our way back to affordable housing.
The government should scrap capital gains if you downsize to an appropriate sized house (and can prove you lived there with a larger family and they’ve moved out, to discourage house flippers just overbuying)