As demand for condos in Toronto suddenly softens, more developers are pulling the plug on new projects, even on some that have already started. David Zura explains.
Small builders are going into receivership in West end project and north project in Barrie. They can't sell some units as buyers can't qualify at these high interest rates.
The fundamental problem of unaffordable housing is the coupling of the basic need of life to wealth investment. The latter one fuels the spiral of ever increasing housing price.
Either home owners are losing some equity, or we are all dealing with inflation (wage-price spiral), or some combination of both (stagflation), there are no other ways around to fix affordability. Permits are not homes. No private company will ever increase supply in the anticipation of price decrease. Developers are already scaling down their projects and firing workers because there is not enough demand at the current price level. So only government could increase supply in this situation. Arbitrary immigration targets are simultaneously increasing demand and suppressing wage growth.
What they really need to build is apartments, lots and lots of them. Undercut the current rental market. This will cause the landlords to lower prices, sell off houses that are rented by the room and let families buy them at reasonable prices while renters get a break. A basic apartment should be priced sufficiently that any full time single person can pay for it using the 30% rule in any location they live in. This whole problem was created because rentals disappeared, this forced landlords to scoop up properties and flip them into mini apartments completing with average non-commercial buyers.
@@JoseLopez-hp5oo yes but not rental. Ownership starter homes for first time homebuyers. There r plenty of rental ones. Hv u seen their conditions? Ppl generally care for something better when they own it
@@mattl4802 I understand your point , however homes will free up and become cheaper as a result of cheaper rentals. The problem is that landlords are bidding up the prices of homes to make them into rentals. If you can get these landlords to sell off these homes then regular people like you and I can buy them cheaper. You cannot outbid a landlords with in income of thousands a month and net assets in the millions for that home you want. This is the fundamental problem. If they just build a lot more townhomes and single homes without building rentals, then the investors will just scoop them up.
@@JoseLopez-hp5oo i too understand your point and think we r in 99% agreement. Im in agreement with u for more apartments. In incheon korea, the govt blocked the building of town and single homes. Only the building of high rise apartments near transits with malls nearby. No pool or facilties to stop mgmt from using them to extort maintenance money from homeowners. This is something the feds can begin doing. Change the zoning laws. Heres where the slight disagreement lies. Like u said ,landlords r stubbornly bidding up the price of homes n turning into rentals. Lets not outbid them. Instead, undercut/disrupt the market. To be fair, im not against building rental units. But the backlog is just too much. In toronto alone, u hv 90000 ppl waiting for affordable rental n its impossible for the govt to supply all of them. Look at the current immigration rates, even with the recent changes, unsustainable. U need to take current tenants who hv some capital, ready to be 1st time home buyers n start housing them.
Canada needs apartments, not single family homes or lavish condos, nicely built Apartment buildings with self contained heating and AC, places where families can have a kid or 2 and where new comers can live..the model exists all over the world outside of N.America, easiest way to add ‘homes’ quickly what is needed now
1. Stop building rentals and disincentive any private building of purpose built rentals. 2. Build condos and sell them to investors to convert to rentals to fill that rental gap. 3. Landlords get rich buying condos and renting them out. Now buy single family homes, driving up prices and converting those to rentals. 4. Add more population a LOT more 5. Have an event where interest rates are a rick bottom making #3 supercharged. 6. Inflation nation.
Good friends rent in the 4 story building and have one of those balconies that face directly into that monstrosity. Just blue and green wall. Builder somehow got permission to build 1.5 floors above the building's top floor. No more blue sky. It was worse when the entire siding was bright "construction orange" for 2 years!! The builder started the tear down of the former house, and construction in 2017!!! Construction in drips and drabs but he kept running out of money. Just enough to pay the insurance - so it remains standing. I feel for the residents. It's an f'n nightmare.
Two year ago none of these people were complaining when rates were low and the BoC was juicing rates to the point of even saying publicly “We need the growth we can get.” We are now seeing the consequences of policies that did nothing but let land prices spiral out of control The hypocrisy of these developers and real estate agents is on another level here asking for more low rates and cheap debt
Uncontolled building for a limited market in order to make more profit is frankly irresponsible. Housing needs to turn to a more stable realistic ideology. Be realustic about what people need and want and...build in a needed price range. Also build greener and smarter. If its a new roof, build it in a way owners can put up solar effectively.
Thats market forces for ya, i wouldnt be surprised if some of these unfinished ones are part sold and those ppl wont get their deposits back. Market forces doing their thing- winners and losers
@@XetaXones uhh nope, that was a tongue-in-cheek comment poking fun at the people that actually do think Trudeau is the cause of all life’s problems. It wasn’t a serious comment. Obviously Trudeau has nothing to do with a baby orca making its way back to the ocean.
Bc Geoff has done a lack of thinking and tons of it but the guys never outright promoted trudeau. I'd rather defend that knob than let you have a thought.
@@mattl4802 Building a lot more rentals will relieve the house market, this whole problem stemmed from lack of rental supply. For over 30 years Canada has been building condos to sell to private investors to convert to rentals instead of just building rentals.
