fear a housing crash due to people buying homes above asking prices with little equity. If prices drop, affordability and potential foreclosures may arise, worsened by future layoffs and rising living costs. I want to invest more than $300k, but I'm not sure on how to mitigate risk.
Consider reallocating from real estate to other reliable investments like stock, crypto or precious metals . Severe recessions offer market buying opportunities with caution, as volatility can yield short-term trading prospects. Not financial advice, but it may be wise to invest, as cash isn't ideal in this period.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Melissa Terri Swayne for the last five years or so, and her returns have been pretty much amazing.
Wow, it's sad that Germany (that's where I live) is considered a good example in this video. I laughed out loud when hearing that - I'm currently struggling to find an affordable place to live. Rents are ridiculously high here as well, especially in cities. Certainly not as bad as those examples from Vancouver earlier in the video (over 2.000 $ for a single bedroom apartment, are you kidding?!), but still bad enough that I have a really hard time to find a decent place to live that won't cost me half my meager monthly income in rent.
The housing crisis is global, but you're going from good to bad whereas Canadian big cities are going from bad to worse. The solution is the same everywhere though: more housing (and not in the distant suburbs either).
@@tristanridley1601 is the solution more housing? Vancouver is a great example of a city that built more and more. Unfortunately all of it gold sold ot foreign investors. And the same problem stays.
@@tristanridley1601cities like berlin went from good to bad all the way back when we sold all the public housing for "austerity" which we are now trying to buy back for 10-20x the price. Absolute joke of a government
A policy that isn't discussed enough: a progressive taxation on multiple property ownership. First property is taxed minimally, and each property owned afterward is taxed progressively more, such that it would be unaffordable for any entity to own more than a few of certain types of residential properties (single family homes, condos, townhomes). This essentially eliminates large, multi-property investors, while still giving room for regular people to own a few properties and use them as rental income. It largely de-commodifies housing, I think.
@@jusunglee6673 This is assuming landlords would try to pass the costs onto the renters, rather than sell their properties? Honestly it would take a research paper to make any strong claims about the effects of a policy like this, but these are some of my thoughts. Some places have laws about allowable rent increases, but outside of those places you would probably see a small increase. It would depend a lot on rental supply and renter behaviours (willingness to share space to cut individual costs, etc.) as well as how long the landlords can afford to sit on empty properties. It would also depend on what level a taxation policy like this is enacted (municipal, provincial/state, or federally). The more people and housing included in the policy, and the less likely it would be to result in significant rent increases. However, if a taxation policy like this were enacted it is also likely that some amount of these privately owned rental properties will be placed on the market. The likely effect of this is a moderate decrease in housing prices, but again it depends a lot on local conditions, behaviours, and what level it is enacted at. From my observations in my city, it is likely that a lot of the older (more affordable for first-time home buyers) properties would be purchased to tear down for infills. So I would be very surprised to see it have any significant effect on housing prices in the desirable inner-city neighbourhoods but could have a large local effect in decreasing suburban housing prices.
One of the other items that doesn't get talked about enough is the repurposing of housing stock for SMB offices. Lawyers and Doctors and accountants and architects often buy larger older homes (Mainly because older homes were larger) and convert them to corporate offices. Once that happens, they almost never are returned to use as accommodations. Here in Toronto in the Downtown core, I suspect as much as 10 - 15% of all Victorian homes are owned by corporations who are using them as office space. This removes them from the housing space entirely and contributes to the supply/Demand imbalance.
You're just changing who's being the landlord without addressing the problem of housing being an appreciating asset. Having homeowners even more invested in housing does not de-commodify it.
@@bopete3204 If fewer singular entities own multiple units of housing, there should be more housing for individuals to own as primary residences. People tend to hang on to primary residences much longer than people hang on to investment properties. This should reduce property sales/turnover and slow down property price growth.
@@downhillupside Oh trickle-down economics. If we concentrate the assets under just a few large corporations then they will create more housing? We have seen that what happened is those profits get put into other long-term investments where they make no contribution to the street-level economy. They just juggle numbers on a spreadsheet and funnel the profits back into those financial constructs but never actually build anything or sell and physical goods and certainly are never given to lower-income people for the purposed of spending on real goods. This is where one of the purposes of government is to redistribute wealth and prevent excessive concentration of financial assets by building social housing, and providing items like a basic income to ensure everyone has enough money to have a place to live and sufficient funds across economic cycles to ensure the economy remains a stable functioning machine.
About Here doesn't post all the time - but About Here absolutely never misses. Always 10/10 content. I'm 100% with you in regards to being conflicted about how to manage the housing crisis.
Great video, I do think however turning to renting will further accelerate the $ capital shift from the 99% to the 1%. Increasing wealth inequality for a country like ours that does not have robust social nets or social services as other countries you mentioned is a scary thought.
@@person-yu8cu not true. Home ownership rate is over 60% so when prices rise 60% of households benefit from more wealth. Important thing is to keep the wealth as distributed as possible
@@grildcheez1504 The housing prices are several times household income and of course there's interest. So it's not really wealth, just debt and they may lose when the bubble collapses. Many people can't afford a down payment, but could afford a lower rent if more rentals were available.
@@person-yu8cu This is not new. Housing prices in many cities are many multiples of income. If house prices collapse no one will be building homes because the material and labor cost to build a home still stays the same so the only thing that would happen is new homes won't get built if people can't finance them. And this comparison to 30 years ago is fake. Vancouver was not a world class city then. Canada was not a sought after place for immigration. Vancouver specials were 2000 sqft budget homes if you compare any neighbourhood or home in 1980 to 2021. Condos never had washers/dryers, gyms, fire code, swimming pools, sprinkler, etc in them, houses didn't have 4 kitchens and 7 washrooms. Neighbourhoods weren't getting rezoned for higher density driving up land cost. It's all fake propoganda news by the government and developers to drum up more tax sops and taxes to fund themselves. People didn't have youtube/tik tok software with shopify stock options making bank with tyecnhlogy leverage www.cbc.ca/news/business/lumber-prices-covid-19-cost-of-housing-1.5973416 www.vantechjournal.com/p/vancouver-unicorns All these newly minted vancovuer millionaire employees can buy million dollar homes easy with their equity. No probem
Sure, we need more of these sinister geniuses who conveniently emit majority of the blame that lies on the Chinese speculators and their dirty foreign money. You look at him and it's obvious why he does that. Great video production skills though.
@@enzovirk I’m not 100 percent bro but I’m pretty sure he is Korean not Chinese either way your issue with the world is not with this guy. This guy makes great community content, and seems geared towards making Vancouver a better city. Can you say that? Goof
There was an article in the Economist a few years ago that mentioned how renting vs owning impacts voting behavior (tames the NIMBYs), so high renting areas have weaker NIMBY groups, and thereby can do more things that make housing cheaper, accessible, and in the US/Canada upset the NIMBYs.
There's another solution available to the Provincial governments, too: take back zoning control. They have the ability to do this and, honestly, I think it's time they did. The future of cities can't be decided by the silver hairs that don't want anything to change when everything always changes.
If you are an investor and see that government has a history of screwing the type of investment you are considering over, you don't invest. Whether that means the original developers will not undertake the project will only be seen in real life. Once trust is lost, it will be hard to regain.
@@IkeOkerekeNews It isn't actually. Provinces have previously had zoning duties and have the ability to reclaim them from cities. With a city like Surrey overtaking Vancouver in population it's very clear either Metro Vancouver wants to turn Vancouver proper into an enclave for the wealthy waterfront class, or the City is grossly mis-managing its land and needs to have its privilege of zoning duties revoked.
@@gfair2 If provinces once had the ability do create zoning codes, but have ultimately devolved them to municipalities, I suspect that there must be a deeper reason for this occurrence, likely the growing micromanagement needed to implement zoning policies by provinces, and the introduction of democratic governance within these municipal entities and related bureaucracies. Nowadays, the norm is for local institutions to handle the development and implementation of zoning. Zoning is primarily a local issue, and besides some small interventions from provincial and federal government, should be handle by local governments.
As a german I have to say the information in this video is only partially correct. While average housing costs across germany didn't rise drastically, it's a very different story in the big cities. Almost all of them, especially berlin, munich, frankfurt and hamburg, exploded in the last 10 years. The situation is that dire, socialists in berlin collected around 200k signatures for the expropriation of big real estate companies
This is such a well produced video. I'm a new college grad who grew up in Burnaby and moved to Toronto for school and now work. I absolutely don't see myself being able to purchase a house in Toronto, at least not for the next few years :( and I"m planning to move into a purpose-built rental next month. Personally, I always thought that I'd be renting forever, and tbh that's pretty okay for me, but this video definitely explained the pros and cons of doing that. Thank you!
We have the exact same problem here in Auckland. We have gone down the upzoning and increasing supply route. Has worked in the sense that supply has increased but prices have not dropped
My parents (in their 60s) recently-separated. COVID wiped out their business. Sold their farmhouse an hour outside of Toronto for 1m. Split two ways, they can't afford to live anywhere economically sustainable for either of them. Both "retired" without losing their shirts. To rent a basement apartment here is about 1800 + utilities. They have about 17~ years of rent each, and both are currently healthy. This is why there's a huge influx of boomers working at Home Depot and Walmart in their 70s. They are going to outlive their money. Two years ago, my SO and I rented a brand new apartment for 60% of what my mom pays for her grungy apartment. And relatively speaking, she got an amazing deal. As long as there are people willing to pay the ridiculous rent, the house prices will sustain themselves. $2400 a month is about a 600k mortgage. So you have people converting basements into apartments (that when built, were never intended to be lived in) and charging an additional 1800 for the basement. That revenue could justify a 900k mortgage + property taxes. See the problem?
You are people willing to pay ridiculous rents and house prices because of the lack of supply. The US alone is lacking 5 million housing units in high demand areas. In the South, In the West and in North East from DC to Boston.
Really enjoy all your videos, I learn a lot about urban planning and Vancouver history from you. Awesome to see Urbanarium are sponsoring you to make cool things. I’d be interested to hear in a future video what you think about city’s with high numbers of renters that have kept costs low e.g Vienna or even ones that focus on low cost public housing but high homeownership like Singapore.
I legit get so excited whenever you upload a new video. ✨ This one was once again super educational, especially as an East Berliner who recently moved to Vancouver (and doesn't understand North America's obsession with home ownership at all).
What's not to understand ? Who wouldn't want a house? Renting puts you at the mercy of landlords slumlords, racist, $$$grubbers and neighbors you didn't know . A life renter id love small ( not tiny ) home .
When I was renting my rent went up by at least 100$ every year at a minimum with no maintenance or upgrades. And paying rent never stops. Now I will pay the same amount every year until I only need to pay property tax. They have to build or buy the property and pay many people to manage them and they still need to pull in a profit. Owning your own is a better deal here where I live. I don't think most people need a landlord. Renting is good for some things though. Like if you've moved to a new place and want to live there and explore for a year before buying, or if you're attending a university and will move away soon. Or a temporary job.
Great vid. While the question about the relationship between rental rates and affordability remains, it really touched on the key problem: inequality is growing, and in places like metro van, it's being felt acutely. With 70% of the population conceivably wanting debilitating housing costs to rise, what does this say to the democratic principle of the well-being of the minority being protected? There's no easy way forward, in fact I can see a lot of pain in our future.
As a homeowner, I do not want prices to keep going up. My home being worth twice what it is now has no real impact unless I move to a much cheaper area. It's not like I can just sell it to realize the gains as then I'd have nowhere to live. Even worse, if I want to move to a more expensive property, the additional cost due to price growth makes it more difficult. If prices went in half tomorrow the only difference would be that I could afford to sell and buy a nicer place. The only real benefit I can imagine is that I can use the value in my home for retirement, but even that has limited impact as I'd still need somewhere to live.
@@graham1034 once u are old, u can sell, and plan a retirement in a rental, u will die eventually, lol. Joke aside, I understand your point, but rmemener that the rst of the "investors"are not thinking like you, there's people out there that think that this is a sport. Also, think about the impact of the rise of prices in other social classes, Vancouver pays bad and is expensive, is simple Math, Taxes are high and yet the city doesn't provide that much help for people that can't afford to buy nor rent.
@Killer Miser A fundamental understanding of democracy is that the majority rule, with minority rights protected. Read another way, democracies must steer clear of a tyranny of the majority with the well-being of the minority in view. If there are policies and market inputs that are preventing housing from correcting, and as a result is producing and entrenching a shocking level of inequality between two groups - as indeed there is - this would qualify as a breach of the above understanding. We're at risk of irreparably damaging our society - nothing less.
How I think life is supposed to work is that you rent for a few years while starting out in your career until you save enough for a down payment for a property of your own. So we have the issue with rent prices being too high that prevents people from saving for a down payment, and housing prices being too high that nobody on an average salary will have any hope of owning a house, or even a condo. Property as an investment needs to be discouraged while maintaining the ability for some property to be rented out, so yeah maybe purpose built rentals could solve this, but at the same time renting condos would need to be banned
Germany's culture of renting is also supported by a strong unionized work force and better social systems. The German economy is also very robust and diverse with an automotive and manufacturing base along with petrochemicals etc. North America has offshored almost all of it's good jobs and wage stagnation has made it all but impossible to build wealth via home ownership. The wealthy own properties and the rest are just gig economy wage slaves whose rent payments make them richer.
@@eutoob That's a fucking stupid way to look at things, I'm getting tired of idiots complaining about communism when that's literally capitalism at work.
Another huge advantage of home ownership: when you retire your mortgage, you dramatically reducing your housing costs. If your costs are mortgage+taxes+insurance+repairs, and you drp the mortgage, you can cut your housing costs by as much as 75%. Your mortgage is also fixed, so 20 years in you are paying the same amount for that part of your housing costs, while rents go up to keep up with market costs. When you retire, if you don't have a mortgage, you can live a lot more cheaply on your fixed income. If you've rented your entire life, then you have to pay rent even after you retire.
Actually, it's more complicated. Mortgages are either flexible rate or fixed. If flexible, the owner is at risk of rates going up. If fixed, the terms are typically 3 or 5 years. Not longer. So by the time 20 years have gone by you have probably had to renew 4 to 6 times already, each time facing interest rate risk.
This seems like an indictment on the entire rental system. What if landlording was just illegal? (I know, it's a utopian idea so better to just join the upper class if at all possible and buy property.)
Still a fixed rate is expensive and considering higher interest rate then in the last few years. Ownership can be expensive. Mortgage rates went up in part 1000 Dollar a month.
One of BC's biggest issues for renters, too, is the lack of freedom. I am a renter. I have been for about a decade. And as someone who has dreamt of designing my own interior since I was a kid, it's painful to be not allowed to alter the unit whatsoever. Can't paint, can't hang shelves up, can't increase the amount of light in a dingy basement. It's also tough for people who want a pet companion. If you can't find a place with one cat, what about two? Or a dog? It's near impossible! This is another reason why the appeal of ownership is perpetuated in BC.
3 reasons why we have a problem 1. we limit housing supply 2. we limit housing supply 3. we limit housing supply supply / demand, 100,000 people accepted to immigrate into the lower mainland this next year. Where are these people going to live. I can't complain I own a house
There’s a better solution: you can’t own a home unless you live there. You can still rent out, but it goes through federally regulated and city owned high density housing. Contractors would make bids to the city government to build these complexes, just like arms dealers do for our military. This way, houses cannot be an investment, and renters don’t get screwed for profits because the city would only charge for utilities. From here, with housing prices being dramatically more stable, cities can apply a housing price cap based on to class of house (ie: 3 bed 2 bath, 1 bed 1 bath, 4 bed, 2.5 bath, etc…). This way, developers can’t scam home owners into paying way higher, which would create too much demand for renting for the cities to handle. Next you have zoning restrictions for where certain classes of homes can be. No more developing only gigantic, pricy houses in areas where nobody can afford it so they go into serious debt and are suffocated by their mortgage. All of this together allows the market to create variation in housing so we don’t have Stalinist architecture, but housing is still treated as a human right and not an investment it like it is in capitalist countries.
I was gonna say vacancy tax but I think this really is closer to what I want. There are some situations where I'd be okay with someone owning multiple homes, but they'd be marginal and really as long as people were driven away from owning more than a small number for a short time, and more than 1 for an extended period, that really cuts to the quick of decommodification.
Yet another banger video! I'm glad we have you to contemplate metro Vancouver issues and policies. Every video of yours is just so spot on and informative, so don't stop! :)
Germany has a population growth rate of 0.3%; Canada has a 1.4% growth rate. This could easily explain why Germany has more stable housing prices: they don't have a housing shortage due to population growth.
Another factor (especially valid for BC) is that most of this growth is immigration. And immigration into Canada is highly biased towards net gain in money, it prioritises highly paid young professionals and international students, who pay for tuition. Sometimes you even have to bring in cash to be accepted into the country. And housing is one of the main "buckets" where this capital ends up in. While in Germany there is a lot of EU immigrants, who don't have to be high paid nor have any requirements on bringing in the capital.
Population growth is not as big as you think. As he somewhat pointed out mind set is the biggest problem. Germany still has the mindset of a house is just a place where you live and raise a family, Canada and US also use to have this mindset. Now the Canadian and US mindset is that houses are investments that you have to make money on. With that mindset people will do what it takes to keep the value to continue going higher. This shift started to take place in the late 80's early 90's and is fully entrenched now.
Another excellent video as usual. The thing people don't seem to get is that housing can't be affordable as long as it's an investment, it simply doesn't fit. In a place where 70% of residents are homeowners and profit from renting, why would anyone want houses to become cheaper to start with?
You looked at investment and housing ( as in having a roof over your head). What was missed was 1) neighborhood/neighborhood community allowed in the single family residential setting creating cohesive relations as well as 2) the creativity allowed when you don't have the unspoken rules of density, i.e. stay in line. When you grow up with density and then leave density, one feels a thrill of freedom, a burst of energy, the unburdening of a micro constructed society. I've been away from Chicago for 53 years and I'm still on vacation.
2 points: 1. For myself, what's important is having control over what I can do with my living space. Economics aside, it's clear that one has more control over a space that they own... 2. There is also an interesting middle area of cooperative ownership, through co-housing or land trusts. This lowers the economic entry barrier while allowing individuals to still build equity (among other benefits). I would love to see this option more widely known/used! Thanks for your thoughtful content!
You don't own anything until you make that last mortgage payment, until then, the bank owns you. All you own is the bills for maintenance and upkeep of the property and the taxes.
@@BoggWeasel Hardly, what you own is the value increase and equity in your place. Also, kicking out someone who has a mortgage on a property is quite a bit harder and more expensive than someone who is renting - at least in quite a few countries. This also grants security.
@@dinokknd It's still not yours until the final payment, you may have certain "property rights"... still not your land. "Whoever owns the debt owns you".
@@BoggWeasel I do not see your point. The equity is yours. The bank only owns the amount that you owe. Assuming you somehow default on your payments, it'll get sold, and the value above the amount you owe is yours. This is also not in the banks interest, as you paying off your mortgage in financially more profitable for them long term.
@@dinokknd Assuming you've been in the home long enough to develop the equity...it takes a long time time to get over that red line....meantime, anything can happen. Nearly 50% of Americans are only one or two missed paycheck from financial disaster. Your mortgage can be sold from under you and traded with a subsequent increase in repayments as the new owner can increase the interest payments, all without your permission. Banks are being far too liberal with loans, driving up prices as it creates a housing shortage and people are buying into overpriced properties they can't really afford... Signing on the dotted line for a mortgage doesn't make you safely housed or rich. Most homes are a sinkhole of expenses with property upkeep and will not be a comfortable economic fit for the owner until after at least the first 10 years...
Your promoting the "You will Own Nothing and be Happy?" The best thing for people is to own their own space. We just need to get the "Wall Street" out of the market to drive up the cost out of reach. Imagine if culturally we could never own the home someone else lives in? Imagine if everyone, including you, owned where you live?
I wish this video had talked about private companies buying large amounts of homes and crowding out single home owners. In my opinion an exponential tax on the number of homes owned per person or company would help first time buyers and renters.
Get rid of single-family zoning. Replace it with a 4 stories tall building limit. That way if you want to you can build a single-family house but you can also make a 4 story walk up. Also, get rid of commercial and residential zoning and make it all mixed-use.
at the end of the day it's a simple supply and demand equation (that is anything but simple. If the purpose built rent units are more expensive than condos/apartments, it will just allow landlords to charge more. Mid-rises and apartments/multiplex units often block views for house owners, so I don't see that in the foreseeable future (at least for city of vancouver). Maybe we will see more apartments and mini city centres in surrounding areas like delta, richmond and surrey. (north shore is out of the question too)
I just found your channel and love your content. Subscribed! Is that really what the skyline of Vancouver looks like? I was there in 2000 and don't remember it looking like that. I'm glad people have places to live, but it's ugly as hell.
I can only afford to purchase a 1 bed condo , but every time I see a place I like and look at the financials , it dawns on me that I'm basically paying double what the previous owner paid only a handful of years earlier and I'm inheriting all the big maintenance work that is inevitably coming within 5-10 years down the line as the buildings various structural and aesthetical features start reaching end of life. So not only will I have paid potentially $200k+ extra than just 3-4 years ago but I might be looking at $30-70k just in special levy over the next 5-10 years . I feel like its a trap buying apartments when the market it crazy like this , previous owners not only got to live in the place and enjoy the insane appreciation of recent years but in many cases they haven't even had to shoulder any of the heavy maintenance burdens . I'm totally for owning your own property , specially if you are living and working in that area but at the current prices and maintenance liabilities, I'm skeptical whether some properties are going to be a legit investment or a bigger sink of your money than just renting . But ofcourse if prices double still in the next 5+ years I will be eating my words.....but then there's the question about who is buying 1 bed condos at $1-1.4 million. So for now, if your rent is still a reasonable price , that cost might still be better than all the costs associated with buying over that period.
The background in your first shot is tripping me out. I'm in Mississauga, but I live in that exact same setting. Condo kinda isolated on your left, park in the centre, and condos clustered on your right. They have the same design and placement too...
The thing is... some entity will always own the property. Even if more of the general population rents rather than buys their home, that just means more profit into the hands of developers or REITs. Someone has to provide the rental service in this model and they will expect to be compensated in return. Wouldn't this lead to further wealth inequality?
As a homeowner, I first view a home as a home. Not an investment, but a security asset that should first and foremost be used for living in. I purchased my 2 bedroom condo at the previous highs of 2016, at $150k over asking. And I could not care less if it fell by some 50% or more. The primary reason I spent that money was so that I could have a social and financial safety net, and a roof over my head in the worst case scenario where I could no longer find another place to rent. In the meantime, my family moved out of the condo and we are presently renting a larger 3 bedroom single family home, and are renting out our condo to make up part of that rental cost. But that condo will always remain a security and safety net, a bit like insurance. I never viewed it as an investment.
Sometimes I wonder if municipalities owned and profited from purpose-built rentals, if then they could use that money to invest into the communities in which they serve. So instead of a renter's rent making somebody else rich, that rent was instead invested in the community. The major corporations who want to profit off of making condos and executive homes can continue to do so keeping the 'American dream' alive. I'm not talking about low income housing but market price housing. It would also help real estate company with older real estate that requires work in order to meet climate goals easily offload properties that they don't see as profitable anymore and may not be able to sell.
The solution to the Housing Crisis - Tiered Interest Rates. Property 1 = Cheap Interest Rates, Property 2 = More Expensive Interest Rates, , , , , , Property 10 = Very Expensive Interest Rates. This would help make corporations and investors have less of an impact on the housing market, or if they are using the multiple properties as investments then maybe they should have more capital to invest in purchasing the property to begin with.
A few companies buy all the housing and sit on it. This reduces supply and increases the value of the houses. LA is famous for this and real estate companies make double selling a property that just sat empty.
Well done! I don’t fully agree but you really laid that out nice, very clear and relatable. I think most anyone could watch that, be challenged by it and maybe not be offended
An average Vancouver couple (both working) would have to save for 14 years to buy the average detached home in Vancouver. And that math is based on the value of the detached home NOT rising, which of course it logically will. I understand that this is just an example made non-existent "average" couples, but that's a bad sign for how severe the problem has gotten.
@@davidbarry6900 house:income is 40? Jeez, that's actually worse than Vancouver. Here the median before taxes is $72,585 (we pay a lot of tax). Average home is at $1,362,105. So our ratio is only 19. We do have fairly strict mortgage rules but even then 40 is insane.
**Graham Stephen** 😂 😂 😂 Really, though… you talk about home ownership (mortgage pay down) as an investment and a way to build wealth, however it is becoming more risky in markets outside of Vancouver or Toronto. In Calgary for example, you could have bought a house in 2007, paid it down but had costs of renovation, maintenance, taxes, etc and sold it in 2021 for nearly the same price you paid - not even a break even in the long term. If you had put that downpayment amount in Bitcoin (or some other lucrative investment in hindsight) in 2007 you would be way further ahead. The “investment” of home ownership isn’t what it used to be and in some cases, renting and putting your capital towards other investments would be a smarter move. Also with renting you have more flexibility (life/work change, easy to move location or up/down size), and less worry about unexpected costs (roof leak, no problem for you).
Renting or owing house is choice. When you are renting, you can use your saving to invest in stock market. When you are owing house, you put your money into your house asset.
Just do what Shenzhen does, tax based on sq ft. So say each person gets 500 sq ft that's not taxable, anything beyond that, taxable. Increase the carrying cost
Renting is degrading, people should own their own houses. Houses should be made to live inside, not as an "investment". And if the government creates so many stupid laws, they should be able to create some that lean society in that direction. And you are wrong, if more people rent a house, investors will treat a house like an investment even more, because now they can rent it easily and get an instant return from that.
Okay, serious question here. Imagine a not too distant future where housing was a right, not a privilege. So anyone with a heartbeat - wait that's too utopian - any citizen or permanent resident has the right to a basic shelter. Something small like the extreme micro flat you might see in NYC. And anyone can live in one for free, just paying for the electricity and water they use. What would that do to the housing market? There would still be a demand for nice places, but gone would be the rent or die on the street issue. And with a choice, would people still be paying 70% of their income in rent, or would everyone opting to take the free option force rental prices to be more reasonable? To even get there, a lot of these micro flat would need to be built. If the government was on the hook to provide free housing, would this lead to terribly unsafe, cheaply made buildings? Or would we see some modern housing infrastructure being made as a government project?
Remove Government intervention, notably including artificially suppressed interest rates, and then let the market do its own price discovery. House prices will not only drop to sensible levels, but will stabilize. The primary problem is excessive debt. It's that simple. The problem is that by incentivizing people to borrow, people borrow more, and that pushes up prices (among a bunch of other things). Consider that said borrowing is generally exclusive to houses and not to anything else. Now if the Gov were to stop manipulating markets, markets could correct to where they should be - problem solved. But that would be a "crash" and people would go bankrupt. That breaks their paradigm however, so they won't let it happen. Attempting anything else is just pissing into the wind, really. Especially MORE intervention, as that's what has caused this mess in the first place. We should start by looking where things should be and work backwards, but that would be the smart thing to do, so. Also, it's not really "renting your way out of it" because the solution being proposed is basically saying that people should just abandon the idea of ownership and accept being life-long renters. There is no end goal of full ownership (by those who want it) or more affordable prices.
Maybe a solution should be to build first time national home owner housing. What really makes housing price go up is foreign investors and local investors snapping up properties when they t already own multiple homes for rental purposes.
Let me lay down an example. Backstory: I am lucky enough to be in the higher paid world and am locked out of renting one of the new rent controlled units but I need to live somewhere and must decide between renting or buying in vancouver due to work. If I rent I am paying someones mortgage and generally their strata fees. Most of these investment properties are rented out so that they cost 0$ to the owners and therefor will only give them gain when they sell. The newer rent purposed units are popping up but unless rent controlled they are priced even higher then the investment properties. Leaves you stuck with the decision of generally paying someone elses mortgage or your own. Renting would normally be the right choice but in the market of the future ( which is still gunna rocket up) any additional owning costs will be paid back to you ( and more) upon selling. With prices going up daily its really hard to purchase even though it is the ideal scenario. I am completely stuck knowing buying is the only way to get ahead in this city but like everyone else am struggling to compete with those that are buying their 2nd or 3rd home
I think rentals are the issue here. The whole reason a the housing market is so expensive for people buying is because so many houses are bought up and used as rental properties, limiting the available supply and increasing prices. If you were to ban rentals, housing prices would drop dramatically as they stop being an investment and become just a good to purchase when you want to live somewhere.
The city administration is largely responsible for the lack of purpose built rentals through development requirement costs and landlord tenant regulations.
A big problem with increasing rentals is you’re only really increasing the wealth gap by giving tons of money to a few people who own all the land. With an entire building renting all the units, there is 1 owner for let’s say 600 units. All the wealth is funnelling into one person, while the renters have 0 equity because the own nothing. The only way to fix this is have the government make the buildings. 80% of all housing in Singapore was constructed by the government. They make huge condo buildings and sell them to citizens. Because it’s government owned and built, they aren’t after profits so pricing isn’t a huge issue. In Vancouver, you said it yourself in the video, rental units aren’t common because they’re not lucrative. The developers only care about one thing, making money, housing people is just a bonus but they could care less.
Seems to me that dealing with the issue of missing middle housing would be more reasonable than switching over to having housing be rental units primarily. Rent prices are incredibly unaffordable, as are the prices for purchasing a home. Making the rental market almost entirely dictated by property owners who can afford entire apartment complexes downtown in major cities seems unwise when we almost exclusively have single family homes and massive glass towers in the sky. Just sounds like a recipe for making housing unaffordable enough to cripple the housing market and even the economy entirely
There is another consideration, however: With the high cost of housing, many people are effectively out of the housing market, anyway. So that inequality of wealth remains. Also, people who don't buy homes aren't stuffing their money in mattresses. Many, like myself, are investing their money through a depending finance advisory firm. So I have my money growing in something that doesn't require a mortgage, insurance, or maintenance. One other point: I've heard that where you have high ownership, you have more unemployment because people cannot move so easily to look for work.
People own because they want to be anchored have jobs of longevity Millenua however think ( hahaha) they won't marry or breed so rent rent rent. Truth is THEY FEAR COMMITTMENT. They fear losing their jobs.
I think rental buildings might help. Condos are always facing strata fee increases, and landlords pass the increases onto their tenants. With rental buildings, this is not the case. Also, remove no rental bylaws within existing condos. Yes, the owner could sell the unit, but more rental choices within condos could not hurt. Of course, all of this is dependent on the provincial government to act and they don't really care, they say the right things, but they do not act in a way that has an impact.
Zoning for multi units does not make it affordable. The builders sell these multi family developments to companies like Berkshire who charge up the yazoo for rent. Even here in Florida, the rental costs are now as much as a mortgage. Many blame relocation of Californian refugees where rents are even higher. Almost none of these multi units are for sale...most are rentals only.
A simple solution to the housing crisis seems to be what Singapore did: Build quality social housing for the middle class that can only be lived in through a mortgage that essentially functions like renting. The rules accompanying this system are essential, no speculation allowed, you only get the apartment when you will actually live there for a long time, etc. It would be very cool if you could do a video on this.
8:20 "Nobody buys gym memberships they don't intend to use." LOL. The business model of gyms is designed around people starting memberships and NOT going.
One reason selling condos are also preferred is the glorious "Maintenance Fees" you still have to pay the building monthly. Yes, you "own" your condo... But the building is still owned and operated by the building owner... Thus you have to pay them these fees to maintain the building. Tada! You have recurring income without worrying about actually renting the suites, and you get your money back (and more) for building the building and condos. More money for the building owner and developer! You can see why purpose built rentals have become less appealing to developers.
This will happen wherever people can buy property or housing units as investments. It takes drastic government intervention, but that is not possible in Canada or Australia because property taxes account for a large chuck of their budget income. The only "solution" implemented by the Canadian government so far is... you guessed, more taxes. Actually, taxation is the solution to everything in Canada.
