Tag Archives: land

Friday (afternoon) Free-for-all!

It’s that time of the week again!

Let’s do our regular end of the week news round up and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

Ottawa making housing fix a top priority
Thanks for the help
Impact of housing on economy
Fake assets
Goodbye Vancouver
Empty Land
Household debt bigger than GDP
Average Weekly Inventory chart
Why the borrowing binge will end badly

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

Friday Free-for-all!

It’s the end of another work week and that means it’s time for another Friday Free-for-all!

This is our standard end of the week news round up and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

Surprise! No Rate Increase.
Alberta down, who’s next?
Always running out of land
Global boom continues
Hamilton prices see biggest jump
Van RE stranger than fiction
Actual reporting happening
Paul is back with the numbers!

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

Why worry about home ownership rates?

Some people have expressed concerns about Canadian home ownership rates hitting the highs that were last reached in the US before their market crashed, while others have said they’ll do what they can to increase home ownership rates in Canada.

So why would anyone worry about high ownership rates anyways?

ILoveCharts posted their take in the previous thread, and that comment is reproduced below:

Why do we need to worry about high home ownership rates?

1) Because when too many people own a home, it reduces the mobility of our workforce. Given the spotty/local nature of our economy, it’s important for our economy for people to be able to move within the country to follow the hot spots. When commodities are hot, people need to move to the west and our dollar is higher so manufacturing in the east suffers. When commodities are doing poorly the dollar drops and people need to move east to escape the barren mines, forests and oil fields of the west. Until we see major investment in diversification at the provincial level (likely will never happen,) this cycle will continue. With high home ownership rates, the teeter totter has tipped but people are nailed to the plank and they are stuck.

2) Because there is a practical maximum and a natural median. There will always be people who can’t practically buy (they are students, in poverty, etc.) When you go through a period of above-average buying, you expand the size of the housing industry (construction, realtors, etc.) in a way that is not sustainable in the long run. Once you hit the maximum, it only has one way to go to get back to the median. In the process, a lot of people lose their jobs. Seeing as 70% of people own homes, they start to run into problems with their mortgage. You can try to move the maximum point a little bit with new lending rules.. but you can only play that game for so long. Are we going to bring back the 40 year mortgage? Shocking to hear that we are going to allow $70k tax free out of the RRSP…

3) Because home ownership provides little to no value to society when it’s more expensive than renting. We want Canadians to be saving their money and investing in Canadian companies through Canadian stocks. We want those vast sums of money to deployed in our markets – creating and growing enterprises. Ownership of dirt doesn’t move our country forward.

The price of land is arbitrary. We have the second lowest population density in the world. It’s an incredible sign of weakness that we have allowed ourselves to get into a situation where we each pay so much for little pieces of it. We need to blame ourselves and our governments. We need to blame ourselves for feeling entitled to increases in the value of our property. Businesses with growing cashflows deserve to increase in value. Dirt does not – at least not at this rate. We need to blame the governments for being so willing to satisfy our demand for their short-term gain.

Now we’re hooped. The NDP wants to bring in massive social housing projects, the Conservatives want to use what is basically a nationalized bank (CMHC) to backstop ever-increasing mortgages for an ever increasing portion of the population and the Liberals just want to legalize weed.

I honestly can’t think of a way out of it.

Friday Free-for-all!

It’s that time of the week again! Let’s wrap up the work week with our regular news round-up and open topic discussion thread.  Here are a few links to kick off the chat:

Inventory inches up
Canada’s housing crash begins
BC slowdown signals wider slump
No Cam, thats not what happened
Mommy, can I borrow the car?
Vancouvers economic well-being
No more land, lots more condos
Tiny little boxes
25% drop in Vancouver?
Come back to BC!
Why rent?

 

So what are you seeing out there?  Post your news links, thoughts and anecdotes here and have an excellent weekend!