Baby, we got a bubble!?

[DirectionNorth]

"There’s a listing for a detached home near Avenue Road and the 401, ... priced competitively, ... but there’s little activity in terms of offers from buyers..."

Ummmm... maybe if nobody is offering to buy it, it's not competitively priced?

Unfortunately, we've created a moral hazard-free environment where anyone who buys real estate does so with the assurance - no, the certainty that they will profit off higher prices. It's complete insanity.

Our cowardly political "leaders" are now catering to these "investors" with no sense of risk management. Retirement funds for the landed gentry, fuck the unwashed masses. Let them fail, I say - maybe we'll all learn a lesson on economic management from this shitshow.

Or maybe not, if the current governments' (at all levels) actions are anything to go by. /sigh

 

[Undead]

Retirement funds for the landed gentry, fuck the unwashed masses.

Let's not forget that about 2/3 of Canadians and half of Toronto are owners, including plenty of first time buyers (the second largest group of buyers) barely holding on. So it's inaccurate to frame the issue as one of a small group of owners screwing the "masses."

The problem with letting housing crash is that the entire economy has become dependent on it. Meaning we all lose our jobs if it does. Not a good alternative even given the current situation.

All of which makes the issue more complicated and even tougher to fix.

 

[DirectionNorth]

Let's not forget that about 2/3 of Canadians and half of Toronto are owners, including plenty of first time buyers (the second largest group of buyers) barely holding on. So it's inaccurate to frame the issue as one of a small group of owners screwing the "masses."

The problem with letting housing crash is that the entire economy has become dependent on it. Meaning we all lose our jobs if it does. Not a good alternative even given the current situation.

All of which makes the issue more complicated and even tougher to fix.

The right time to crash prices was five years ago, and the next best time is now. It's a Ponzi scheme, transferring costs from new buyers and renters to sellers (I'm not convinced that regular people actually benefit from the bubble, rather than having the perception of having benefits); you don't help more people by keeping the scheme going longer.

When immigration slows, or people emigrate, or we see economic stagnation from low interest rates (compared to the US; see the BoC's rate cuts) and poor productivity (from this shitshow), then the music will stop. Maybe we won't regret the crash when it happens, but I doubt it - we'll wish we did it while the economy was good (so late 2010s or 2021-2022), and the effects less painful.

Pick your poison.

 

[Undead]

I doubt existing renters will fare well when a bunch of owners foreclose and are forced to rent on top of existing demand.

Fundamentally, we need to get away from a consumption, endless growth economic model which creates perverse incentives to create bubbles like this.

 

[Admiral Beez]

I doubt existing renters will fare well when a bunch of owners foreclose and are forced to rent on top of existing demand.

Good tenants, those who can afford $3k or more a month, who pay on time, cause no fuss and care for the property will always have a place. These are the golden, cherished tenants that every landlord covets.

 

[Undead]

Not wrong, but now you're just playing into DN's "eff the masses" point lol.

 

[DirectionNorth]

I doubt existing renters will fare well when a bunch of owners foreclose and are forced to rent on top of existing demand.

Fundamentally, we need to get away from a consumption, endless growth economic model which creates perverse incentives to create bubbles like this.

You’re missing the point - the correction will be painful, and it will be more painful the longer we hold it off.

A bit like an addiction.

A correction would not have been a big deal in 2010, and not a big deal outside Vancouver in 2014, but we’ve made unbridled housing growth semi-official government policy.

The crash is going to come, and it’s not going to come when we want. We should have burst the bubble and eaten the loss while the economy was good and we had some control over its direction of impact, but the longer we wait, the less control we’ll have.

Not wrong, but now you're just playing into DN's "eff the masses" point lol.

Everything wrong with housing in one sentence, and we still wonder why people are mad.

Nobody’s going to work in the morning planning evil schemes to screw the worker, but through willful ignorance, this is the effect of the policy they’ve coordinated. Or not coordinated.

Hence my statement.

 

[Undead]

You’re missing the point - the correction will be painful, and it will be more painful the longer we hold it off.

I'm missing nothing. I've been well aware of this for years.

I think the point is that this issue has become a lot messier and harder to resolve because we've let it fester too long, as you mentioned. But that's water under the bridge. Today, it's no longer as simple as letting it all crash which may cause many people to lose their homes and jobs.

That's all I'm saying--it's no longer as simple as "just let it all crash/burn."

A correction would not have been a big deal in 2010, and not a big deal outside Vancouver in 2014, but we’ve made unbridled housing growth semi-official government policy.

If you check my post history, you'll see that I've made this exact point multiple times.