Federal Finance Minister Chrystia Freeland has made my point! Her 2022 Federal Budget shows there ARE ways senior governments can help working Canadians … individuals, couples, young families … get into the housing market.
And the Federal Budget also proved my point two weeks ago: showing HOW the BC NDP has turned its back on struggling middle-class working taxpayers, who were once its base.
I had castigated the BC NDP for its pathetic high profile announcement that, in the face of the terrible economic stresses people have suffered for two years now under Covid , the government will rebate a “piddly” $110 per ICBC-covered motorist ($165 for commercial drivers) … at some time in May or June.
(By the way, the BC rebate plan was made to look all the more “piddly” after Ontario announced April 4 that the province will drop its gas tax by 5.7 cents a litre and its fuel tax by 5.3 cents a litre … for SIX MONTHS!)
I contended the BC announcement proved just how much Premier John Horgan’s government has lost touch with and how little the BC NDP now focuses on hard-working tax-paying British Columbians, hardly able to pay their rents, let alone dream of ever buying a home: the government catering instead to the “gimme, gimme, gimme” crowd.
You can review that blog here: http://harveyoberfeld.ca/blog/110-gas-rebate-horgan-ndps-insult-to-bcs-working-middle-class/.
Now, the federal Liberal Budget proves my point … and shows the BC NDP how senior governments, if they want to, CAN help working taxpayers too.
The first announcement: a $500 one-time grant to new home buyers made me think “Another piddly amount” from government that will do nothing to really assist anyone trying to buy a home.
But then there was more:
The federal government will allow Canadians under 40 to put up to $8,000 a year EACH into a new Tax Free Housing Savings Account ($16,000 for a couple) to a maximum over time of $40,000 each ($80,000 a couple.) Money that will be also tax-free when withdrawn to buy a home.
Cynics and critics will, of course, wonder where working individuals, couples and families will get the funds to put away?
Just watch: the total many people will manage to sock away TAX-FREE, with this incentive, by the end of the first year, second year and third year will astound you!
And help thousands get into homes!
The Liberals will also double the current $5,000 First Time Home Buyer’s Tax Credit to $10,000.
Anyone building a secondary suite in their home will be eligible for a $7,500 tax credit; and,
The federal government will spend $2 BILLION more this year alone in an effort to double annual housing starts across the country from 200,000 to 400,000.
Seems to be that’s a pretty good effort to at least do something to help working Canadians (individuals, couples, families).
Which brings me back to the BC NDP.
Where are their NEW incentives for WORKING individuals, couples and families to save and buy first home, in the face of increasing costs?
Why not a BC Tax Free Home Savings Plan???? Up to $5,000 per person per year? Up to a maximum of $25,000 over time?
Or why not a BC Mortgage Assistance Plan, allowing first-time home buyers to deduct all or part of mortgage interest costs on their owner-occupied home from their Income Taxes … as is already done in several other states/countries?
BC could/should do SOMETHING … other than collect a foreign buyers’ tax that is just spare change to many offshore buyers … and which the BC government then just pockets!
The BC NDP, as I wrote recently, is too focused and devoted to catering to the activists, agitators, protestors …the “gimme, gimme, gimme” crowd … and has forgotten about its historic base … the vast majority of the working people who really make this province run.
The federal Budget puts to shame even more the BC NDP government’s recent announcement that, after two years of the extra financial burden British Columbians have been through … all they could come up with was that “piddly” $110 rebate cheque!
Shame!
Harv Oberfeld
(Follow me @harveyoberfeld.ca on Twitter for FREE First Alerts to new Blog postings. No spam … just Alerts to new topics up for discussion.)
Hi Harvey,
While the Liberal govt has flown the proposal for a $8000 per year Tax free investment.
It’s not limited to under 40 year olds.
If you havent owned property and are renting for the last 4 years ( me) .
You can take advantage of the new FHSA.
The FHSA is open to anybody meeting these criteria:
Over 18
Canadian resident (you do not need to be a citizen or a PR)
Don’t currently own a home, and
Have not owned one at any time in the previous four calendar years (so when the accounts are available next year that will mean no real estate held since 2018).
The Liberals had floated the FSHA last Sept as a mortgage perk for “under 40’s ” ( ageism?)
And you have 15 years to invest it on a housing purchase.
As much as I loathe the Liberals….
I have every intention of taking full advantage of THAT tax free saving account before they realize what they have done and yank it back.
(Response: Thanks for the additional details. That’s even better! Readers of this Blog know I have been critical in the past of the federal Liberals and Prime Minister Justin Trudeau. But the title on this Blog is Keeping it Real … and when I heard/saw the Housing program in the Budget, I was impressed. It’s a very difficult issue, but at least here is an attempt by government to do SOMETHING! Now where are the BC NDP??? It’s about time they realized the middle class here need help too … instead of just catering over and over again to activists, agitators and others in the permanent “gimme, gimme, gimme” crowd. h.o)
First of all I will apologize beforehand to those who are die hard NDP voters because you ain’t going to like this. As well, I am an old lefty and as such my view maybe somewhat tainted by dated views on government.
On soapbox.
The NDP have seemed not to be able to learn from recent history, such as the 2001 election, where the party was not only decimated, the party was gutted.
Two lack lustre party leaders since (though Dix, I think has proved his mettle), Horgan was the reluctant third leader and instead of rebuilding the party, the NDP quietly tried to change history, as if 2001 had never happened. Horgan and his cabal would also like to forget that in 2018, they barely attained government after what is now seen as one of the most corrupt governments in BC’s history.
Those who do not learn from history will be doomed to repeat it.
The NDP today is being largely advised by the discredited former Vision Vancouver politicians, who were in bed with land developers and land speculators. It is Vision(less) Vancouver that started the downward spiral into being a dump.
Horgan has been seduced by big projects, such as site C and the Broadway subway, yet has turned a blind eye to much of what should be done and is being left undone. Union jobs is the mantra.
Horgan treats the people as an open purse and good help you if you are a senior. The NDP has become a racist government, kow-towing to the First nations.
Not everyone is equal in BC and some are far less equal than others.
So BC has “Hapless Horgan” and the gang that never can shoot straight in charge and looking at their dismal record in office, the many slaps in the face to the common person; the lack of any coherent “green” plan, other than more and more taxes. The NDP are digging their own grave.
The Liberal party of Canada, may not have a “so great” leader but they are a party of realists, who want to retain power and the the homeowner savings plan give the illusion of that they care, something “Hapless Horgan” cannot or will not do!
Off soapbox.
(Response: From my perspective, the NDP had its birth … and its success … among the urban working class, farmers and industrial workers, with heavy blue collar/union backing; but now, the BC NDP has become much more the party of social workers, far left intellectuals and “Robin Hood” activists, who cater unquestioningly to the “gimme, gimme, gimme” crowd. And the BC NDP seems to have forgotten, or even turned on their history, and now see the middle class, industrial workers and even small businesses solely as a SOURCE of money that can be squeezed and squeezed and squeezed …so they have more for the “gimme, gimme, gimme” crowd. So out of touch, they probably thought their “piddly” $110 rebate would be widely welcomed. NOT! Now the federal Liberal Budget shows THERE ARE ways middle class workers could be helped to get into the hosing market … which exposes the BC NDP government’s LACK OF ACTION even more! h.o)
Harvey,
Vision BC oops i mean the NDP has proven that they are not on the side of renters, remember the $500 renters grant promise, They are definitely not on the side of landlords or rental stock developers, unless you are a non profit service provider.
we cant even talk about the largest slumlord in BC . that would be BC housing.
The housing system in BC whether it is rental or purchase ,whether it is private or social in my opinion is systemically corrupt.
All levels of government has a role to play in fixing this.
Could the Liberals have done more sure, this is a good start ,time for the rest to step up. could we possibly see a resurrection of co ops or even put cmhc back into building rental stock.
(Response: Your quite right when you say ALL levels of government have a role to play. At least the feds have introduced a savings plan, increased funding to build homes across the country etc. What has the BC government done to help middle class home buyers? And look at the City of Vancouver: the newspaper Vancouver is Awesome has calculated the current Council have increased property taxes a whopping 23.54% since the 2018 election!! That may help them fund their social revolution, but it has made it much more difficult for taxpaying residents to just to pay rent, let alone save to buy in Vancouver! h.o)
Disagree that this does anything to help anyone aside from a high net worth renter, if someone can explain to me how this will lower housing, I’m all ears. As with every other “program ” it serves to goose sales which increases prices. The only way housing will become affordable is to increase interest rates. AKA Rip the bandage off. Oh, and the remove rapacious taxes the various governments are so happy to gorge on.
Everything else is window dressing for the gullible, But yes I will take advantage of this misguided boutique tax break. HELOCS are still being used as cash machines at record levels and debt is bloating on the assumption that RE always “goes up” . Speculation is rampant. When it turns, (it will, interest rates are going up starting this week and continuing. 2% to 5% represents more than double mortgage rates) it will get ugly, fast. Canadians have to renew unlike the US where they get 30 yr locked in rates.
There will be day of reckoning. It wont come from politicians. O Courage to do the right thing 10 yrs ago. Now here we are, a complete unsustainable mess. The fallout could be epic. Nobody will be immune. Only took 10% of housing in the US to take the whole ponzi scheme down. While the circumstances may be not the same as sub prime , It isnt different this time in Canada, we aren’t special, and no, everyone doesn’t want to live here.
Dont really care personally, financially secure, I have no skin in the game, and time will tell, but history does repeat. Often.
(Response: Let’s keep it real: the only things that will substantially LOWER housing prices are a huge increase in the number of units available or much higher interest rates. That’s not what the Federal Budget even attempts to do. It does provide a means and an incentive for people to save the 25% to 30% they normally pay for income taxes and put it aside in a tax free home savings account. True, many people won’t have enough to do that, but there will be many thousands who will … and it at least helps them ..unlike the BC NDP government, which has done nothing to help those same people. h.o)
Ontario’s canceled taxes add up to 11 cents per liter. B C’s tax relief is $110. At 11 cents per liter, after you have bought 1000 liters you will have ‘saved’ $110. If it takes 50 liters per fillup, after 20 fillups you will have ‘saved’ $110. One fill up per week, 20 weeks is about 5 months.
Ontario’s largess is about the same as B C’s largess per person. Of course, Ontario has many more people than B C.
(Response: Interesting analysis. However, BC’s rebate is a flat rate regardless of how much or how little each ICBC policy holder travels. Ontario’s plan has a greater degree of fairness … in that those who have to drive greater distances to and from work or to carry out their jobs or or even to visit family etc. will save more, while those who travel a lot less will get less. h.o)
Harvey, what Steve Cooley said is not an interesting analysis. It is what people do when they are presented with a set of facts before making an opinion. As soon as I read your comment about Ontario’s tax relief I immediately wondered how much people would save. So I googled. Average Ontarian drives about 16000km/year. Average car uses 8 to 12 litres per 100km so lets go with 10. 1600 litres x .11 = $176. But it is only for six months so $88. If I had scrolled to the comments before googling I would have saved 10 minutes as I would have accepted Steve’s similar number.
I have no problem with what the Liberals are trying to do here. It all sounds good but some people don’t see it as the perfect solution. I wasn’t even sure if you were agreeing or disagreeing with Rainclouds but he definitely has a point. In our system, prices are set through supply and demand. If people are able to save money to purchase a home that is great but it just means more people have the money so the price goes up. By the time someone has saved $40,000 I am guessing the house has gone up at least that much. https://www.cbc.ca/news/canada/toronto/housing-affordability-federal-budget-ontario-1.6414017
And it is worse in your neck of the woods. My house sits on a lot assessed at $150,000. The same lot in Vancouver is worth what? a million. So come north if you want cheaper housing. At the same time it will drive down the demand for Vancouver houses if you want to move back.
And DMJ, you are not offending this life long (more or less) NDP voter. I actually voted for the BC Liberals in 2001 believing that they were actual liberals and not the conservatives they turned out to be. And surprise surprise, my MLA didn’t really have much interest in speaking on behalf of constituents who opposed much of what the Liberals ended up doing, getting the boot in 2005. So unless that imaginary party that Harvey is hoping for actually shows up, I don’t see much of an alternative. And I don’t think I am alone. This is no way near 2001. Horgan has a 64% approval rating, the highest in the country.
https://toronto.ctvnews.ca/doug-ford-s-approval-rating-drops-to-37-per-cent-poll-finds-1.5822324
That is not to say that the NDP can’t do more. But the problem and solution is not simplistic. I found this article interesting. Canada has the fewest housing units per 1000 of any G7 country. Small supply. More demand. Higher cost. The article also talks about the effect a child care policy will have on demand for housing. The author calls for a national table of all three levels of government with building contractors and other stakeholders.
https://www.canadianrealestatemagazine.ca/news/canada-has-lowest-housing-units-per-capita-in-g7-334653.aspx
This is a fascinating topic Harvey. But it goes well beyond simplistic finger pointing at whatever government people happen to hate.
(Response: The key point, I believe … and I’m sure you agree … is that the Ontario plan is FAIRER: it allows greater savings for those who drive the most …and have been impacted the most; the full BC rebate goes to every policy holder, even someone who seldom drives. As for your reference to “simplistic finger pointing at whatever government people happen to hate” … this seems to be something new from you: that when people criticize, castigate and denounce actions, policies, hypocrisies of a government … that means they “hate” it. Really? Not just democratic criticism and/or denunciation of perceived hypocrisy or incompetence? Saying criticism implies “hate” sounds like something out of the script book of Russian state media commentators. h.o)
The following comment is pretty fair amount of what needs to be said, and it bears repeating. Harvey Oberfeld writes: “…the only things that will substantially LOWER housing prices are a huge increase in the number of units available or much higher interest rates. That’s not what the Federal Budget even attempts to do.”
Read that again.
As well, one might have added that a lowering of domestic demand by reducing immigration numbers would also help relieve pressure on housing. But apparently no discussion like this can ever be had in this country.
Further, one could have admitted that, if the governments had not been allowed to shut down the economies of the world for long periods of time, housing and supplies would not have fallen into shortages nor suffered the resulting massive price hikes.
Now if we turn to consider this past week’s updated budget from the oh-so distant federal government, we see it included a wide range of housing policies. While many of these were good headline grabbers, some of them will never see the light of day, and others lack any real substance. Let’s dissect some of them further.
Foreign Buyer Ban
The media took this one and ran with it. A two year ban on foreign buyers across the nation. It made for great headlines until you read the fine print. Unlike most of the Governments housing policies, this one has no official start date. In fact, here’s the exact wording they used in the budget, “To make sure that housing is owned by Canadians instead of foreign investors, Budget 2022 announces the government’s intention to propose restrictions that would prohibit foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non- recreational, residential property in Canada for a period of two years.”
They intend to propose. In other words, we might never see this get passed through parliament. Even if it is passed, it is loaded with loopholes. It exempts International students on the path to permanent residency and individuals on work permits who are residing in Canada. Foreigners are still allowed to buy primary residences, just not investment properties. Evidence out of BC and Ontario is that foreign buyers taxes, as they are currently set up, have not made housing any more affordable. In BC, foreign buyers accounted for just over 1% of total transactions last year, per the BC Government. An outright ban, as its currently designed, would have little to no impact on the housing market, and that’s probably by design.
No Property Flipping
Another headline grabber. Starting January 2023, any home bought and resold within a 12 month period will be taxed as business income, and will not qualify for primary residence exemption. Exemptions would apply for Canadians who sell their home due to certain life circumstances, such as a death, disability, the birth of a child, a new job, or a divorce. Again, loaded with loopholes. It’s also worth adding that CRA already flags homes that are bought and resold in a short period of time. People with a track record of doing flips are typically flagged by CRA and are fully taxed. This policy simply adds clarification and is not really anything new.
Housing Accelerator Fund
Budget 2022 proposes to provide $4 billion over five years. It include support such as an annual per-door incentive for municipalities, or up-front funding for investments in municipal housing planning and delivery processes that will speed up housing development. This policy is well intentioned as I think we can all agree more housing supply is needed. However, how do we allocate this $4B? Last time I checked there was also a supply shortage of skilled labour, and supply chain bottlenecks. Adding a few more city staff to speed up a condo development permit might reduce wait times from 36 months down to 32 months- that isn’t going to move the needle. Let’s not forget this government has also ramped up immigration targets which is basically counter-intuitive in alleviating a housing supply crunch.
Other Tweaks
There was also the creation of a first time home buyer savings account, a small upgrade from the existing RRSP option, and tax clarification on flipping pre-sale assignments (in which GST/HST was already applicable).
In other words, all of these housing policies simply dabble around the edges and there was nothing of real substance. The media headlines looked great though, a foreign buyer ban and a home flipper tax makes for good politics.
(Response: I believe the Foreign Buyers ban is almost meaningless. First of all, despite all the press the topic gets, less than 5% of all the home sales in Vancouver and Toronto have involved foreign buyers. The housing cost problem is MUCH bigger than that. Also the ban doesn’t apply to offshore citizens holding permanent residents’ status in Canada; and, I have no doubt foreign buyers will still be able to find Canadian relatives/friends/business associates (for a fee?) or registered corporate entities to buy on their behalf. Where there’s a will …. there’s a way. h.o)
A “foreign Buyer Ban” doesnt stop people from creating a company in Canada and have the company buy property.
“Building more houses” …who’s going to do that? EVERY tradesman I talk to and EVERY supplier I talk to is looking to hire staff….NO ONE is applying.
Inflation is roaring back to life and the only way govt’s can slay that dragon is higher interest rates.
Inevitable.
Rising interest rates are the only thing to put the housing speculation genie back in the bottle.
Lets have this discussion about sky high housing prices again next April and then April 2024.
It will seem quaint.
When I said this “But it goes well beyond simplistic finger pointing at whatever government people happen to hate.” hate might have been the wrong word. Perhaps it would have been better to say: But it goes well beyond simplistic finger pointing at whatever government people feel deserve “democratic criticism and/or denunciation of perceived hypocrisy or incompetence.”
The Liberals have brought in some changes that Steve Saresky (a realtor with a blog on housing) says just look good in headlines. Rainclouds is skeptical of the policy changes and who they help. Two of the articles I linked make similar points. Let’s not lose our objectivity and give the federal Liberals (a party I kind of support) a free pass because they “appear” to be doing something.
I may be way off base here, but as far as I can tell, the solution is creating more housing. Increase the supply.
But who pays for that. Where does it go? And what does it look like. More apartments or condos or more two bedroom houses on smaller lots like my parents, brother and I lived in when I was growing up in East Van. That house lasted about 70 years before it was torn down and replaced by a much larger more expensive house. Maybe the big house with the white picket fence is no longer possible especially in the larger urban centres.
Don’t know the answers Harvey. But here is a progressive’s critque of the NDP’s promise to provide 114,000 homes within 10 years. Only 10% have been completed in the first five.
https://www.policynote.ca/housing-promises/
And here is an interview with David Eby explaining the government position. Take it with whatever grain of salt you want.
https://dailyhive.com/vancouver/bc-housing-affordability-david-eby
I would be interested to know what realtor/blogger Steve Saretsky thinks civic, provincial and federal governments should be doing to solve this problem.
(Response: I agree it would be interesting, when people who say governments must do something, if they have specific suggestions/ideas. That’s why in my piece I suggested TWO things the BC government could do: a BC Home Savings Plan similar to the federal one; and/or Mortgage deductibility (interest) for first time buyers. Those a VERY specific, wopild be VERY helpful. Meanwhile, I read the Daily Hive article you cited: once more, a vague vow by Eby to lessen red tape … no specifics…that will come later this year, then probably a year to consult municipalities around the province and then likely another six months to pass the legislation and to a year year to implement? While housing prices go up another $50,000! That’s NO help to people/families trying NOW to get a foot up on buying. h.o)
The current housing issue, is a combination of many ills plaguing this country.
Government greed, simply put, the government makes money off of inflated property values in all forms of taxes.
Government corruption, where government has allowed silly densification in selected areas, letting land speculation run rampant and allowing land developers to build towers and high rise condos, for “success” funding at election time and other assorted plain brown manila envelopes.
Lack of any sort of viable social housing program, the private sector, by nature cannot provide this.
Ponderous bureaucracy, where bureaucrats can do as they please with little politcal interference. This is a government problem as well and I think this will grow even worse in coming years.
Lack of any coherent regional planning has turned large parts of metro Vancouver into one long strip mall.
Provincial government ennui and Federal government hubris, both very dangerous. Remember those “Freedom” convoy’s, scared the s*** out of the politicians, now imagine “Freedom” convoys on steroids with housing as the main issue.
The housing issue is not one of lack of “product”, rather it is more a “land” issue as the more one densities land, the higher in value it becomes, thus increasing the cost of housing.
Any politicians that claims they can cure the housing issue, is selling massive porkies and should be considered a grifter and nothing more.
I would recommend the following , by Prof. Patrick Condon, Sick City, to even to begin to understand how our housing crisis started and how it will not end.
https://drive.google.com/file/d/1U5SooC9ap1rTzWvRGFIZ_AVCoyKelVqP/view
Another stake in the Vancouver Property Ownership heart
https://vancouver.citynews.ca/2022/04/12/vancouver-tax-police-budget/
(Response: So now they’re bleeding the city’s reserve fund $5.7 Million to pay what should have been properly budgeted. Makes me wonder why …with tax increases of more than 23% since this Council was elected in 2018, why they still couldn’t budget properly. WHERE has all the money gone? Wait ..don’t tell me: it would be too upsetting! h.o.)
Just a tiny question. The median price of a home in, say, Victoria is currently $780,000.00 and this price is rising at approximately, say 15% per year (it was actually more like 23% last year but lets use 15% for argument’s sake). Now, let’s take the maximum yearly contribution allowable under Jagmeet Singh’s new plan (remember the NDP is what’s holding this government together) which is $16,000. [Now, remember, to have that $16,000 in after tax money left over each year is a pretty big order – but we’ll get to that later.] So, you manage to scrimp and save for the 5 years you’re allowed to contribute (again, for a couple) you’ll have $80,000 plus whatever interest might have accumulated which will not make the down payment on that $780,000 house you’ve been saving for because now (assuming it continues to inflate at 15%) it’s not worth $780,000 any more – it’s now worth $1, 568,858.60…So, when these lovely savers show up to buy the AVERAGE home in Victoria after managing to set aside, let’s say 10% of their combined ‘average’ income in Victoria for those five years, they’ll not only have been pathetically poor for the five years they’ve been saving – they’ll still be nowhere near having the nut they need (@10%) to buy that ‘average’ home. Don’t start the cheering yet!
(Response: True. Prices will likely continue to rise … I get it. But at least under the new program, people will be able to pout money aside, saving the 25% or 30% income tax deduction they would otherwise pay on that money… on up to $8,000 each per year, $16,000 per couple … again, taxes that would otherwise go directly to Ottawa, and the program will then allow those savings to grow over time, and then be pulled out without paying tax even then, if they use the proceeds to buy a home. That sure is better than doing NOTHING! h.o)
Not much better. And the tax savings on $8,000 per year per year for a person in the average (66,000) income bracket are a little over $3000 per year (assuming no other deductions). I fail to see how ANYONE with a gross income of $66,000 per year will EVER be able to live on $58,000 while they wait for a tax refund in April of the following year. In short, this program will only help people who don’t really need the help because they are already unable to save an appropriate down payment. Furthermore, as my illustration demonstrates, even IF the program were helpful it would still not meet anyone’s needs for at least 5 years. This situation is a problem NOW and this government (and I’m pretty sure the NDP had input into this program) is just kicking the problem down the road. It will ONLY help wealthy people – sad to say….Cheers
(Response: Buy better than nothing. And where is the BC NDP’s plan to help? (Tenants still haven’t even gotten the $400 cheques promised them years ago!! That’s a REAL nothing! h.o)
A few questions for the Feds.
400,000 refugees annually, why are most settled in the 6 most populated urban centers? This influx no doubt causes shortages in the most pressured urban markets. This somehow is always conveniently swept under the carpet by the media (subsidized). Is it simply because the refugee pimps (poverty pimps focused on immigrants) are all in urban centers? Never hear a peep about how 400K folks each year impact housing costs.
Too many layers of government onions to be peeled to get to the real tearful center, proved daily by the Provincial/civic farm teams which constantly emit more excrement than any disposal system can dispose of.
Spending 3+ billion for a vanity subway, which only goes part of the way to UBC while ignoring all the highways which feed the massive metropolis recently caught many in Victoria unaware. No back country closures in 2021’s fire season (unlike 2017) allowed the pandemic confined into the forests in the driest year recently which did cause some human caused fires to happen, of course zero media attention either (those subsidies again?) and now even more $ for a year round wildfire service, albeit one with the same ignorant folks in charge. Still many foundations without rebuilds in Lytton, Monte Lake & Westside road, I guess those residents can wait even longer while govt. employees seem never to want?
21 Municipalities, Metro, Translink, maybe you urban folks can get a few more govt. tax funded entities so they can employ a few more refugees from the Dodo mainstream media to be “communications staff” to spin the ever increasing costs of all items influenced or controlled by the political farm teams in Victoria & the lower mainland?
Hottest real estate market in Canada in the Okanagan, nothing in Trudeau’s meager attempts will help kids buy into markets where almost every sale involves a open bidding war, the BCREA is gleefully making massive bank for the holders of the agencies which collect desk fees etc.
(Response: Lets us know if the feds (or province or any municipalities) provide responses. h.o)
Houses will only come down when they get rid of MONEY LAUNDERING, and their sycophants, the real estate associations that have ALL governments in their back pocket.
Imagine what taking out a minimum $3-$5 billion (those were the numbers from 10 years ago just for illegal marijuana sales) out of the market will do to prices. I believe the hard drugs doubles/3x that number.
Oh yeah, where’s the report on money laundering that has been extended many times. Have to wait for an opportune time to use that card, eh Mr. Horgan?
If people don’t go to jail for the crime of money laundering (aiding and abetting included) in Canada, then we have nothing but a third rate country (https://www.casino.org/news/bc-money-laundering-case-collapsed-over-exposure-of-police-informant/, https://www.casino.org/news/bc-seizes-1-1m-from-woman-accused-of-laundering-220m-a-year/).
All obvious crimes, but slaps on the wrist if at all, controlled by the criminal cabal that controls government, provincial and federal.
We all know what the decision will be, nothing will be done except platitudes for their brethren in their political circles for “tackling” the problem.
Canada doesn’t build enough housing per year to even cover the amount of increasing yearly immigrants and TFWs.
How does Canada change when laundering is now ingrained in the system and most politicians are suspect?
Remember when John Horgan first got elected the first place he traveled to meet dignitaries is China, not our closest ally to the south…..
So what do you do when both ruling class sides are suspect?
Agree with Ron regarding money laundering and how it impacts the real estate market. No one knows for sure how much is laundered in Canada each year but its some where between $5 and $40 billion a year. Another article I read thought it was approx. $20 billion a year. Once that money is in our economy, it doesn’t leave.
A couple of years ago, read that a building on E. Hastings was listed for $30M over assessed value. that is how you launder money. works nicely.
the problem of high housing costs in B.C. can not be “cured” unless more houses/condos are built. Many cities make it difficult and time consuming to obtain permits, etc. Ought to be cleaned up. Get rid of the P.R. people and hire more in the permits and licensing dept.
Rezoning some single family house areas to duplex or triplex, condos. Of course that won’t go over well with some. On the news recently there was a man complaining about the plans for the Jericho Lands. Too many people. It would change the whole atmosphere of the area, etc. Yes, who knows who could move into the neighbourhood. Some of those lots are large, they can’t all be kept for single family homes.
Here in Nanaimo almost all of the new houses being built come with a 2 bedroom suite down stairs. Sort of like the old Vancouver specials. Makes perfect sense.
Government can not at this point do much about the problem, except have more housing built. The problem of rising house prices started back in the 1980s and kept going. There were some plateaus, but all in all, its kept going up. Solutions and plans for the future ought to have been started them, but people were all so happy to be making money. Only those at the bottom of the economic scale were unhappy. Now people are unhappy because the “middle class” is being impacted and the professional classes. That wasn’t supposed to be how its works. Well welcome to the real world.
Many of us aging baby boomers who grew up in Metro Vancouver, grew up in homes which were 900 sq. ft. to about 1200 sq. ft. Those houses were built in the 1960s, 70s. They worked. Our parents could afford them. We all survived quite well with 3 bedrooms and one bathroom. Today’s homes are double the size, with 3 to 4 bathrooms, etc. however the most costly item is land. They aren’t making more of it so its not going to get less expensive. i.e. in Surrey they are selling lots for new homes at $1,2M and they aren’t large. They look like the old Vancouver lots of 33 ft. across.
No government is going to be able to bring in programs which will counter that without interfering in the market place or doing something with taxes for investors.
Three years ago, in Nanaimo, a new “Nanaimo special” sold for approx. $600K and change. Now the new ones are being sold for $1.2M and up. What caused that? Investors coming from the mainland. The house next door sold in Nov. last year for well over asking for $917K–White Rock investor. Earlier this week another house went on the market, $1,045,000. All these houses sold between $600K and $635K 3 years ago. People are blind bidding and after loosing several other bids, they just finally give up and go “over board’ to buy a home. We really need to stop this blind bidding. the government needs to change the law so that you can see what the other people are bidding. It is not unusual to hear younger people say they lost out on 6 houses because they only bid the asking. They eventually will bid $40K to a $100K over asking. The next time a place goes up for sale, in the area the new asking price is
higher than the last one in the area sold for. Increasing interest rates is not going to slow the market. It will only make it tougher for people to purchase their first home and for developer to bring apartments/condos to market.
The Liberals have made a start, but its only a start. People are going to have to learn to save, and start with something which isn’t new and large. Cities/towns might also want to look at permitting manufactured home parks where you own the land. The individual lots are small and the cost of a manufactured home is so much less than a stick build. Manufactured homes are quite a deal. A 924 sq. ft. home with 2 bedrooms and bathrooms start around $150/$160K. the city of surrey was selling a lot in a manufactured home park where you own the lot–price $460K. that is a lot less than a million and change. Some may argue manufactured homes don’t last as long. Well there are a number of manufactured home parks in south Surrey and those homes are 40 and 50 years old and still in decent shape. They are also a better deal because the strata is not responsible for the buildings, only the road ways, snow removal and outer fence, so the monthly fees run approx. $140 a month instead of the $400 and up for a condo and no cash calls because the parking lot walls are failing.
An over all plan might be good in this country. As a country we need to decide if housing is a right or a priviledge and how we are going to go about ensuring everyone has a roof over their head.
Everything I have read so far seems to suggest that the problem is one of supply, and land is in short supply at least in large urban areas. As I pointed out in an earlier post my house is on a lot assessed at $150,000. I checked BC assessment and the lot where I grew up in East Vancouver is assessed at $1.675M. The exact same house that I am living in up north costs at least $1.5M more in Vancouver, and east Van would be one of the cheaper areas so probably 2 or 3 million more.
So good for us northerners for having the opportunity to buy houses much less than people in Vancouver. At the same time, however, everything else we need or want is more expensive. I am guessing nobody in Vancouver has to travel 500km and be away from family for six weeks while receiving cancer treatment. Rich enough to fly to Hawaii or Florida? You don’t have to pay the extra flight to get into Vancouver. People don’t want to come north because they want the amenities of the large urban centre. The price for that is expensive housing.
The dream of raising a family in a detached home with a backyard is still possible but not necessarily in Vancouver which, over the years, has outgrown much of its available land. When I left Vancouver in 1974, Richmond, Coquitlam, and Surrey were hardly developed. Look at them now. And the other communities along the Fraser.
If you can’t spread out, then build up. Densify other neighbourhoods like the west end.
But who in Vancouver wants highrises in their neighbourhood. And highrises aren’t the dream for most young people raising a family. If you want that dream, come north.
(Response: I also think a lot more is involved than just supply and/or offshore buyers etc. For the past 20 years, study after study have shown the financial gaps between those at the top and those in the middle and those at the bottom have been getting wider. Some 50 years ago there were many fewer people born into wealth and many fewer than today earning huge salaries (ask the baseball or NHL players from back then). The middle class was huge in numbers and home builders targeted them: so buying a modest home was just part of the normal family l reality.
With the widening gap between economic strata, many many more wealthy wage earners, investors and professionals have emerged.… So they are the ones the housing industry began targeting, with bigger homes, two and three car garages, deluxe kitchens, two or three bathrooms etc. …. and they started getting scooped up … at much higher prices, and profits. The long-term solution is to strengthen the middle classes… Lessening the gap between them and those above them … and therefore making it much more possible for them to afford houses, which would encourage builders to start catering to them again, with more modest houses, on smaller lots. h.o)
Some interesting points from the BMO chief economist Douglas Porter in piece called” Could We PLEASE Stop With This Supply Myth?”
Some of the points he makes in the article:
A comparison chart from G7 countries points out that Canada’s overpriced housing market is well supplied, relative to other countries. Source of Chart OCED from Federal Budget.
Canada’s supply is not particularly out of line with the OECD average, and certainly not much different than any of the UK, U.S., or Australia,”.
Given a younger population than Europe or Japan, Canada would naturally have a lower ratio—kids don’t own homes.”
Porter also notes a key point in the G7 argument fails when compared with the United States. Porter points out Canadian average home prices are (roughly) 60% higher on average than in the U.S., with essentially the same level of supply per capita as Canada.
And as someone else has pointed out when you measure housing supply at the provincial level units per 1,000 people. Alberta and Ontario are roughly the same, and BC is higher. Alberta has a higher average and median household income than Ontario, however, in February the benchmark price in Calgary for a detached home was $596,000 vs. $2 million in Toronto and $2.1 million in Vancouver.
Unfortunately Porter does not explain why we have an affordability problem.
I have a very old study from 1978 that asked Why Are Houses Cheaper it the US? The study’s answer was BC builders make a considerable larger profit from land than their counterparts in Alberta and Montana; the justification in BC was that land prices are always escalating and in order to prepare for the next project they need a greater profit from the current project to pay for increasing land costs of the next project. Whereas land prices in Alberta and Montana were more stable.
Perhaps this is just a Toronto and Vancouver problem with collateral damage to housing markets in the surrounding regions. I fear we have entered into a perfect storm when you combine the existing factors for high housing cost with inflation, supply chain issues, coming labour issues, lack of productivity and innovation in the construction sector, and rising material costs. Canada lags way behind when you look at the application of technology to house building. Buy a 2 by 4 to see what has happened to material costs. I don’t see this abating anytime soon unless we enter a recession with corresponding job loses. Not much faith in current announced policies.
Article is behind a subscription wall at the GM or on the Better Dwelling Blog site.