As homeownership plummets, young Canadians are moving in with family: poll - National
(globalnews.ca)
from MicroWave@lemmy.world to world@lemmy.world on 31 Oct 2024 12:00
https://lemmy.world/post/21475781
from MicroWave@lemmy.world to world@lemmy.world on 31 Oct 2024 12:00
https://lemmy.world/post/21475781
Young Canadians are holding fast to the dream of buying a home, even as overall rates of ownership are falling sharply, according to a new poll released by Scotiabank Tuesday.
The polling shows a steep decline in young homeowners over the past three years as housing unaffordability issues dogged would-be buyers. Some 26 per cent of Canadians aged 18 to 34 own a home today, down from 47 per cent in 2021, according to the poll.
At the same time, 29 per cent of respondents in that age group reported they were living at home with parents or family, up nine percentage points from three years ago. The number of renters was similarly higher among youth, up to 43 per cent from 29 per cent in 2021.
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Home ownership plummets? That’s not what I’ve heard. Corporations seem to own every home they can buy, and they buy them in bulk.
In Montreal, about 0.1% of the people own about 30% of the properties. Most of them are rich property investors. Many of which are real estate agents, too. They own the market.
As far as large cities in Canada go I was under the impression Montreal is among the more affordable ones too, so for the most part it only gets worse.
Yeah, it does.
Obviously houses are owned by someone, either people, corporations, public entities. Home ownership usually refers to the share of people owning the homes they live in.
I was being sarcastic. Obviously they aren’t talking about corporate home ownership.
I would love it if renting was just banned entirely. Just play the stock market with your extra cash, homes should not be an investment/traded around. People need a place to live. I hope people realize that a shoebox of a condo isn’t worth $1M and theres a massive correction back to more realistic valuations. its just stupid now.
I don’t really want to go through the process of buying a home every few years until I settle down.
I don’t think renting should be completely banned, but it shouldn’t be profitable. Property value appreciation already makes money.
That’s silly. Rent controls, an aggressive rental board, expansion of non-market housing, strong tenant unions, and the abolition of restrictive zoning, these are the things we actually need.
Unless we are also abolishing wage slavery and private property, in which case, sure ban renting.
Not only that, but it sounds like homebuilders have been decreasing housing starts for several years, which seems counterintuitive if one has high housing prices.
reuters.com/…/canada-homebuilding-down-third-year…
Here’s my off-the-cuff understanding of the situation. I have not been closely following it.
In the wake of the global financial crisis, it looks like Canada cranked the central bank’s interest rate way down.
Shortly after Canada started bringing them back up, COVID-19 hit, and Canada slammed rates back down again. It wasn’t until inflation started to rapidly rise in mid-2022 that Canada started bringing them back up, at which point, Canada had had low interest rates for over a decade.
tradingeconomics.com/canada/interest-rate
My understanding is that one effect of running low interest rates is to create asset price bubbles. It’s cheap to borrow money, so people borrow a lot of money and dump a lot of it into housing, which blows the price of housing way up.
This has led to what is believed to be a housing price bubble considerably worse than the one that the US hit:
en.wikipedia.org/wiki/Canadian_property_bubble
This happened because it was cheap to borrow a lot of money under Canadian policy, and so what people did – looking at the rapid increase in Canadian housing prices – was to borrow a lot of money and buy housing with the expectation that it would continue to rise, and that by doing so with a lot of borrowed money, they’d increase their gains:
With Canada finally bringing interest rates up, house builders – expecting that they’re going to have a hard time selling houses – are having a hard time borrowing money to build more houses, so they pulled back on new construction. At that point, you have a lot of people with borrowed money that have soaked up a lot of housing, expecting it to continue to rise.
So I’d expect Canadian house prices to begin falling. When that happens, suddenly that investment in housing that seems like a really great idea because you’re using borrowed money to increase gains becomes a really bad idea, and you want to get out. But…you can’t sell that housing to anyone. So you potentially have a lot of people who want to dump housing all at once, which causes a bubble to pop.
Normally, when a buyer gets a mortgage, they have to make a down payment, though in the runup to the global financial crisis, a lot of US mortgage lenders were issuing a lot of mortgages with no money down. The purpose of this is to shield the lender from risk (and reduces interest rates from the borrower). Someone with a mortgage has $E equity in a house, the part that they own, and then $M that they borrowed from the bank. If someone defaults on their mortgage, because the house was pledged as collateral, then the lender can seize the house and s
Ah, the Canadian housing bubble Wikipedia article talks about some of the points I raised:
en.wikipedia.org/wiki/Canadian_property_bubble
That “snowball” is referring to a bubble popping. And this also mentions the five-year mortgage factor:
The interest rates are already falling and most have weathered the storm. The pressure needed to pop the bubble is being relieved so I doubt it’s going to blow up. Rather I think we’ll see a long sideways movement.
Move to the prairies folks. Vancouver has no place to build new homes. Montreal is an island. Toronto has real and artificial constraints keeping the sprawl contained.
Move to Winnipeg. Regina. Edmonton. Whatever. Own a home like it is 1965. If they’re still too expensive, move to an even smaller city. The jobs are available.
How’s the social scene for a young-ish single person?
Depends on the city. And who you are. I’m a big white dude with a geophysics degree so the circles I run in tend to be coloured by that.
I lived in Edmonton a decade ago, and it was great as a young professional. However, because the city is full of oil money, you really have to work hard to impress anyone with your career there. They’re all like “yeah, whatever, everyone at this bar is throwing down $100s and you’re just one of them assholes”, so you have to be pretty self-aware to date there. But going to a “drink and draw” event at an art gallery will work wonders ;)
Currently in Winnipeg. The arts scene here is great. Met my long term partner here (online dating during COVID, even – “do you want to go on a socially distant walk in the park together?”). She is more hipster than I so I basically ride her coattails now in the art scene. We went “power couple” for our first two years – two houses because that’s how affordable it is.
I have lived, worked, or studied in seven provinces and three territories now. I joke with my friends from elsewhere that when I moved to Winnipeg, I bought a garage and it came with a free house. My quite decent three bedroom, finished basement, double garage was $286k.
Well, it’s cold in winter and very flat topographically, but whatever – I lived in Yellowknife so this is nothing ;)
Photo just outside Winnipeg on the frozen lake – hiking to find cool ice ridges. Just gotta lean into winter :) <img alt="" src="https://lemmy.ca/pictrs/image/e4aff24d-f9ef-4161-9afa-9e2643c9460b.jpeg">