Toronto was ranked as the 98th most expensive city in the world; not even in the top 50, even though it's the 4th largest city in North America.
Perhaps it's more accurate to say that Toronto and Vancouver are unaffordable and expensive cities for domestic Canadians to live in.
>>Our debt to GDP is out of control. Our federal government keeps borrowing and spending on things that are completely inneffective (and bragging they spent the most than any other country). My gloom and doom prediction is our currency is going to be absolutely worthless in two years time.
Canada's debt-to-GDP is 88%[2], but the USA's debt-to-GDP is 127%[3] and climbing. You remember the ol' saying: when America sneezes, Canada catches a cold. The largest destabilizing factor to Canada's economy is likely to be problems with their largest trading partner.
[1] https://www.mercer.com/newsroom/2020-cost-of-living.html
[2] https://worldpopulationreview.com/countries/countries-by-nat...
SF a condo might be 1M, but getting paid 250k+ for a job is fairly common.
In Toronto the condo might be 1M (CAD), but getting paid 250k+ CAD is not common.
By all accounts Toronto is more expensive than SF
Also, interest rates are 1% lower in Canada (albeit on shorter terms), and property taxes are roughly half.
This isn’t to say that homes are “cheap”, but there’s more to the story.
(Aside, I have lived in both cities for a considerable number of years.)
No doubt, there's also a great deal of greed and wealth signaling from the general population (especially among upper middle class) as well. Competition around high ranking school areas comes to mind. Not to mention rental properties are pretty much the go-to choice of passive income building that most people go for.
I would bet that if multiple property ownership was penalized by high taxes, real estate prices would come down real fast.
If you're in tech of course. SF and Toronto have many other professionals living in. How's the median salaries comparing?
Yes, the numbers in that first link are in the context of expats. But even with remote work likely becoming more common, it's more meaningful in general to think about cost of living with respect to local salaries because that's what people living in a city are earning.
So, I'm not going to look into different methodologies that are used, but Toronto is often ranked near the top of least affordable cities.
For example: http://demographia.com/dhi.pdf
When the only factor is home ownership, which is the focus of URI's study, this is absolutely correct. But then I think back to how absolutely unaffordable housing was across the GTA in the late 80s, after which point people were able to buy back in again when the housing market corrected 40% in most of the GTA, with certain areas of Toronto (not the GTA) dropping by over 50%.
Homeowners generally want housing prices to rise indefinitely, but this is in direct opposition to younger cohorts wanting affordable entry points to home ownership.
The URI study also doesn't mention anything about renting. There are rumbles that Toronto developers have built too many properties (condos primarily), so perhaps an oversupply will benefit both renters and potential homebuyers if/when property prices correct.
If housing is expensive it's because there aren't enough houses or the land is too expensive, and it's true that much of this is due to zoning and similar restrictions like parking minimums.
Regulations which include language like "X% of units must be for renters making <80% AMI" appear positive, but often favor larger-scale, high-capital projects which exacerbate bifurcation in the housing market and drive even more stock towards the rental/high-HOA model, bundled with big-box retail and other commercial real estate nearby.
There is a genuine affordable (and equitable) housing movement, largely built on urban equity-cooperatives and community land trusts, but those promising efforts have been very effectively redirected into boosting opportunities for "master planned" real estate corporations.
yes, regulatory capture at work. any time a stipulation is prescriptive rather than (largely) descriptive, it's quite likely a mistargeted regulation. being numerical makes it seem objective, but despite that, it doesn't lead to the implied/explicit intent, which is more equitable housing. it's a token gesture meant to veil the true intent of benefiting, and concentrating power among, cronies. oftentimes, the rationale behind writing regulations this way is to create a clear delineation of what's acceptable and not, but the line is nearly always drawn in the wrong place and is hopelessly incomplete in scope relative to objective.
it's the same class of deception as citing selective (i.e., incomplete) statistics.
what we need is to explicitly encourage human-scale ownership and development everywhere, through every means available, including zoning reform and tax policy.
People focus on the zoning a lot, but it really is the tax policy.
Look around Vancouver and you'll see little three story walk up apartments all over. They stopped making them in 1993 because the incoming Liberal government adopted an incredible deficit slaying austerity approach which was in vogue at the time. The federal government completely got out of participating in housing at all. Beneficial tax policy that encouraged small apartment development was ended and since '93 pretty much the only thing that was built after was condos.
Effectively the current housing affordability crisis in Canada can be traced back to this early 90s austerity decision. Nothing filled the void left by the government pulling away from housing development.
The relatively much more spendy contemporary Liberal government has made lots of noises about housing investment, but they really haven't done much at all to undo the damage of the '93 Liberals.
What was "in vogue" at the time was a Conservative (sic) Mulroney government routinely outspending revenues resulting in Canada's federal debt crisis in the early 90s[1][2] which helped usher in the Cretian government and Paul Martin's austerity measures. I think the austerity measures helped put Canada back on track.
[1] https://tradingeconomics.com/canada/government-debt-to-gdp
[2] https://www.fraserinstitute.org/sites/default/files/federal-...
In California, only 1/3rd of the population has enough income to afford a house. San Francisco is much, much worse.
Subsidizing developers to build (likely high-crime) housing so they can extract income from people with < 80% AMI doesn’t sound like a sustainable path to improving income disparity.
Instead, they should subsidize (or at least stop actively blocking) construction of new homes that the average person can afford to purchase, and then put them up for sale, not rent.
(Edit: I think we agree.)
I get that this model favor large-scale, high-capital projects, but, given that it explicitly set's aside X% for the <80% AMI, I don't see how it is also increasing inaffordability?
Doesn't more density + some X% set aside for affordable units generally positive? Maybe we need to play around with that X% better, but what's the alternative?
When it gets high it's not a giveaway to developers. It's actually a backdoor way to ban housing construction; NIMBYs love to claim they want "real affordable housing" and then set the IZ requirement so high nobody can afford to actually create any.
The whole damn situation is a mess with no way out. Feel sorry for the kids who finish a degree in STEM from Waterloo or UoT and end up working for 40k a year. They will never be able to afford a house and now all of Southern Ontario is getting pricey. Even houses in Barrie (an hour outside of Toronto) are over 500k.
Article
A down payment on a Toronto house should take 24 years to accumulate
https://nowtoronto.com/lifestyle/toronto-real-estate-afforda...
Also, Sentry is hiring in Toronto: https://sentry.io/jobs.
There is rent control where I live, but no buy-house control, and there's almost nothing available below $2M USD.
I feel like the whole point of owning a house is to customize it into a fairytale home of your dreams and never want to sell it. Otherwise I'd just rent.
The starting salary for STEM grads seem to be well above 40K CAD, perhaps even >65K CAD [1].
>>A down payment on a Toronto house should take 24 years to accumulate
When you pair your linked article with the fact that the GTA has experienced net-positive population growth every single year since 1971[1] then it makes a little more sense why property prices have risen and continue to rise inexorably over the years.
I also note that in your linked article a GTA condo downpayment can be accumulated within 4 years at the assumed 10% savings rate for a HHI of $124K CAD, and that's a 2-bedroom condo. If a new grad wants a starter property in the city then perhaps start with the purchase of a studio/1-bed.
[1] https://www.canadastudynews.com/2017/11/30/stem-graduates-ea...
[2] https://www.fin.gov.on.ca/en/economy/demographics/projection...
This lacks the history on what people used to be able to purchase, not just in Toronto but in all of Southern Ontario, and now even as far away as the Maritimes.
The purchasing power for the average Canadian to afford things that actually mater (like housing), is dropping like crazy.
Allow me to give you my own anecdote. 12 years ago, I purchased a "starter home" in Waterloo for $249,000 in the neighborhood I grew up in. Detached with a single car garage, on my "new community college grad" salary of 47k/year with 25k of savings that I had.
Today, with say a 60k/year salary, a new grad in my city could afford to live in a small "starter condo", a huge downgrade to ones expectations who wants to raise a family. The standard of living and affordability has objectively dropped for young people today.
Last week a house on my street that is actually smaller than mine just sold for $780,000. I wonder what their mortgage is like?
But according to some people, hey you can still get into the market! Just buy a condo!
Now lets get to the meat of the issue. Why is this happening (and in many Western countries)?. Economic crashes are literally a built in guaranteed feature of our money system, but our government has found a way to kick the can down the road through mass immigration. As long as they can bring in half a million people in every year willing to take on debt, they think they can avoid a market correction, and they aren't wrong, they have avoided a correction for 12 years now thanks to the people they bring in on a daily basis in Canada. But this was not without a great cost, even if they can continue this nonsense for another 10 years, they have destroyed the purchasing power of your average Canadian to afford things that actually matter, like housing.
I would argue that they found a way to avoid a crash by substituting that with a gradual decline of our standard of living. They stole from the young to pay for their pensions and nest eggs to avoid facing the music.
Unfortunately, in many forums you can't bring up the elephant in the room if you are against mass immigration for its many downsides (including wage stagnation), you get denounced as a racist, or you get attacked by people who want this ponzy scheme to continue because after all, the economy now depends on it! They would rather you blamed the city for not building more condos (that noone wants to live in), and NIMBY's. But don't you dare bring up mass immigration.
Assuming you had that lower interest rate, I just want to illustrate that you may have been fortunate to have purchased at the exact best moment to buy property in North America, as home prices hadn’t yet adjusted to the new purchasing power consumers had (in the form of lower interest rates).
Also, unemployment was pretty high at the time, so while the job might seem meagre compared to today, you likely had a significant advantage vs. your underemployed peers in the region.
Source: https://www.superbrokers.ca/tools/mortgage-rate-history
I remember the frenzy of the '89 housing bubble & early 90's bust especially in Toronto when mortgage interest rates were in the low teens and everybody and their dog was flipping property. The subsequent crash was painful but also allowed new families to get into a more affordable market.
I stand by my comment that it's still possible to buy something for a new family even if it's smaller than what they grew up with. The driver for the reduced affordability is, as you eloquently noted, because of our very liberal immigration policy that allows for continued regional growth coupled with low interest rates.
If you're a homeowner, you want the value of your property to continue to rise. But then this crowds out a younger demographic looking to purchase their first starter properties (condos or houses). We can't have it both ways.
I understand your frustrations over immigration policy, and it's certainly not racist to wish for Canadians to enjoy the fruits of Canada. I just want to gently bring up the historical context that you've left out, but of which you are likely aware. ~5% of Canadians are indigenous, and most humans in Canada descend from recent immigrants who came to pursue a higher standard of living. Barring other humans, born in a slightly different time and place, from that same pursuit: doesn't that seem to be in tension with history?
Population growth is too high to meet demand for proper housing. Therefor, the solution is you cut back immigration, within a couple years demand for housing will fall dramatically. But no, you don't want to see prices fall, or you have something to gain with the immigration rate being high.
When did your family come to Canada? Why do you think you should be the abetter of when it’s full? It’s been growing for 200 years and and at any point people could point to a Canadian city and say it’s full because that’s completely subjective in a country that could easily fit the world’s population.
You’re also completely missing the mark on what I’m saying a increasing density. I’m not talking about shoving people in tiny condos, I’m saying the housing that’s zoned for single detached houses should be zoned to be five story walk ups with beautiful courtyards like London, Paris, or the city I live in now, Amsterdam. These aren’t small condos, they’re large flats that families can live in, it’s not uncommon for families to have multiple floors. You know what people and kids do that don’t have back yards, they walk to a local park and interact with their community, and it make a much healthier and social community. Compared to most European capitals Toronto is a bland shithole, keep your ugly McMansion, keep your ugly car depended suburbs, keep your obesity, and bad food, keep your lame two weeks of vacation where you come to visit European cities you refuse to learn lessons from. Honestly get fucked, I’m over it, people like you are so ignorant it makes me never want to come back to Canada. There, are you happy, Toronto minus one person.
Cities come and go in desirability and some stay very desirable. Some cities undergo a transformation from swaths of single family homes to nothing but condo towers that cost more than homes.
So we have 300k deaths each year, 350k population growth of which 250k is immigrants, for a 1% YoY population increase.
So you'd expect a need to grow housing by 1% and that would flatten prices, but it doesn't, so I feel there's more to it.
> but this is the (as I said) elephant no one wants to discuss publicly
I just did like 30min of googling, and almost all articles discussed immigration as a factor for Toronto high prices. So I'm not sure it's an elephant, it just doesn't seem like the simple explanation people want it to be. It isn't obvious at all that just lowering the number of immigrants the country accepts per year would have a drastic impact on Toronto prices. It seems there's many other factors at play. And you also need to consider all the other impact to the overall economy that lowering the number of migrants would have as well.
I think people just don't really know, it's a hard problem, there's no clear solution, and so no one can come up with actionable remediations.
One thing that I saw which might be a bigger elephant is the fact that old people don't downgrade, they stay occupying the single family residence they've owned for their entire retirement and end of life. Making no room for others. When they most likely no longer take advantage of the city or the extra space afforded by their home, and that limits the pool of homes dramatically. Especially considering Toronto has issues building more since land is scarce, and taxes are high for construction + zoning. I feel the thought was always that when you retire, you cash out your Toronto home, and downsize somewhere else cheaper, making room for others in Toronto, but this doesn't seem to be happening. And this is compounded with life expectancy growing year over year.
The government also obfuscates the number of foreign buyers of housing because it only takes 6 months to gain permanent residency, and those with permanent residency are not counted as foreign buyers.
Saying "we just don't really know", and "its a hard problem" is troubling to me, its basically saying that we shouldn't bother getting to the root of the issue because you'd rather we didn't. So far with your stats that you googled, the one possible cause you offer is that elderly people might be holding onto their homes. Really?? Not, for example, speculators who can capitalize on the fact that we have guaranteed, consistent, artificial, foreign population growth since the 1980's? And why was this done? The conservative party ramped up immigration to gain favor of the immigrant voting block, and all other parties adopted the same approach.
There seem to be many variables whose correlations and effects are not well understood. You claim you've figured it out, that the only effect of increased housing price in the Toronto metro is simply due to migrants, foreign students and foreign investors. Okay, well I'm not against that explanation, but you got to back it up with something. Otherwise it's as good as any other, such as what I pointed too, the large number of single family unit being held by the retired or soon to be retired boomer generation.
My personal opinion, neither are the whole equation, the market of housing is complex, and I think we're far from understanding it, which is why there are simply no cities with landlocked and high populations that have figured out how to slow prices and make housing affordable yet.
But I'm totally willing to hear out anyone whose done some deep analysis and got some good thesis around it.
Personally, I wish politics allowed for testing policies and let people experiment with them a little more loosely without worry of saying ok this failed we're rolling it back and trying something else. If that was the case, I think it be curious to try something like stop taking migrants for a year and measure impact. Honestly the migrant argument is always being brought up, so if anything, it would confirm or deny more clearly that variable, and we could hopefully move on.
Also, you did get me curious into the data, but to be honest, the stats are hard to fully get clarity on what they include and do not. Like there are 600k foreign students, but that's the absolute total it seems, not a year over year increase. And students stay for a while, so it's not like each year there are 600k new students, it's often the same returning students. So we'd need to look at the year over year increase.
Finally, with these type of things, the flip side must also be considered. Based here: https://www.international.gc.ca/education/report-rapport/imp.... foreign students create 80k jobs in Ontario and provide substantial income to the local government. So that would need to be accounted as well if say we decided to restrict their numbers further.
From my perspective, your rationale is a logical fallacy of the single cause.
If you're not familiar with it, I recommend reading:
* http://believingscience.blogspot.com/2016/08/todays-logical-...
* https://medium.com/@edeubanks/argumentum-ad-simplicitate-9f5...
Now what happens with this fallacy isn't that you're for sure wrong, but that you have determined for sure that you are right, yet there are multiple probable cause at play here, but you single one out and attribute that one as a sufficient cause without justification.
And personally, even if it was the single simple cause of high house prices in the Toronto metro, you still haven't addressed the opportunity cost. We don't have immigration out of generosity, most migrants are selected through a thorough application process, and we pull in people with labor skill that we need, or with wealth that we want them to bring over. This is true of foreign investors and students as well. There are reasons why we do so, because most analyst see it as a net positive for our economy. I'm with you where I would like our economy to sustain itself without any external investment, but what I would like and reality are two different things. Right now it doesn't seem like it would. So what are we going to do about that? If you cut out foreign investment, immigration and students you need a strategy for that or we'll just take a huge hit financially.
Also, keep in mind we have a decreasing workforce. Based on this article https://thoughtleadership.rbc.com/from-a-baby-boom-to-a-reti... the foreign workforce we're taking in isn't enough to fill the workforce gap we have due to an aging population. We're losing workers, this isn't steady state. That's why we ramped up immigration:
> For Canada as a whole, the challenge is to become more competitive even as we lose these established workers. Immigration is helping to grow our talent pool. We welcomed more than 300,000 new immigrants last year, about 60% of whom are skilled workers. The immigration minister has described this as “the new normal.” Yet it still doesn’t cover the annual retirement rate, so we’re going to have to get more creative.
It's going to be hard to manage without immigration, we just didn't have enough kids, and we didn't educate, teach and train our kids properly to be able to replace our workforce in a steady state. That's the other side of the problem. We take a few refugees as a feel good pat on the back, but the truth is, most immigration we take in is so that we can sustain our workforce, keep our businesses competitive and prevent our economy from crashing down. At least, that's the reason why we do so. Now maybe that's also a wrong conclusion, maybe there is another way, maybe people overblow the impact of not taking immigrants would have to our economy, but economics is hard, figuring out what is best for the economy isn't simple, in my opinion at least.
That this contributes slightly to the the high prices of some specific neighborhoods in Toronto sounds reasonable to me. But that it is the single cause of prices in the entire Toronto metro, or that without it the prices would halve themselves accross the board, I just don't feel convinced of. The data doesn't add up. There's clearly a lot more at play here.
Which concludes:
> Research in Canada has shown that the overall impact of immigration on housing markets is modest at best in most cases. The effect could be substantial in the case of wealthier immigrants destined to select neighbourhoods. The more important realization is that an absence of immigration would result in a declining population and ageing of the workforce, which could have a much larger negative impact on Canadian housing markets.
I'm not saying that this conclusion is the right one, but I just feel it's actually a much more difficult ECON problem, and cause/effect and figuring out what is best overall is non trivial, and I don't know if wealthy immigrants and high-paid worker immigrants are the simple straightforward explanation we'd all want it to be.
(Immigrants are a positive demand shock because they increase your customer base.)
So immigration is actively encouraged, which is perhaps unique among developed nations (depending only on our definition of 'actively encouraged' I suppose) which is probably 'correct' and could be massive for GDP, but.. shouldn't there also be deliberate attempts to build new cities? My outsider's limited perspective is that it seems to be mostly left to natural progress, which means.. immigrants gravitate towards Vancouver & Toronto, and everywhere that exists just gets slightly bigger and much more expensive.
Why isn't there massive intentional city building to go along with it?
Several decades ago, north of Steeles was prairies and farmlands. The IBM headquarters was moved to that area in the 80s. CGI headquartered in Markham as well. Nowadays there are condos going up all over the place along the 407 and hwy 7.
If more companies did this instead of coveting to be as near union Station as possible, I believe the metropolitan area could still expand horizontally a great deal more before ever coming anywhere near permafrost.
It doesn't even take that much willpower either. Milton, for example, could easily attract companies by offering tax breaks. A lot of talent already commutes from there.
Perhaps decades ago I'd be content with commuting out to the middle of nowhere by car to work for a large company as a lifelong employee. Perhaps those circumstances still exist, but there is a comparatively large number of people living downtown that won't touch transit-poor suburb offices with a 10-pole stick. If you're setting up shop in the suburbs, you will get a pick of only suburb residents.
On the other hand, if you're setting up shop in downtown, you get a pick of both downtown and suburb dwellers. The latter will drive anyway, so it matters comparatively little whether you drive from Mississauga to Milton or from Mississauga to Toronto. Plus a lot of people can find a GO station somewhere and get downtown that way. Good luck commuting to a Milton campus by train from Markham.
Furthermore, with Toronto in the centre of the population bell curve, it's not even just downtown employees vs. suburb employees. It's also that by building on one edge of the municipal area, you will have a harder time to attract people from the other edge. Mississauga to Milton isn't too bad, Ajax to Milton is twice the distance vs. to downtown Toronto.
So in the end, it all goes back to making a choice between locations with relatively broad appeal and a lot of competition, or niche locations that work great for a considerably lower potential selection of employees. Large international companies are finding that they are competitive enough to win employees in the downtown job market while still benefiting from the broad base of talent available there. You'd have to give them unprofitably high tax breaks to make them give up their talent pool.
Smaller shops may try out the niche strategy in the suburbs and may find it to work well for their purposes. But I guess those were not the target of your call for suburban HQs. They're also not at a size at which Milton would consider giving out tax breaks.
There can always be exceptions, although as a general tendency the house is stacked against suburb HQs. Maybe with a drawn-out WFH trend this could change, but for now I still don't see it happening.
What's interesting is that the two companies I mentioned are both very large (offices in multiple cities) and don't have butts-in-seat cultures (people already worked from home a lot even pre-pandemic).
The point about Ajax to Milton being a very long commute is quite valid though Ajax could also try to attract companies of its own. The go train point is fair, but not critical IMHO. People can and do move. And for better or for worse, these municipalities do have very strong car cultures as of today. Living in Scarborough to commute to Markham is a pain in the neck by public transit, but trivial by car (and consider that downtown traffic and parking story isn't great compared to free parking virtually everywhere in Markham, so there's some amount of mutual exclusion there). Also IMHO, the infrastructure follows demand. Some stretches of Hwy 7 have public transit lines now; there's clearly a desire to build out a local scene that isn't centered around downtown Toronto.
I think defending the idea of cramming downtown more and more is more based on status quo, and ultimately it's not going to be sustainable. Downtown Toronto has already grown upwards quite a bit; at the pace condos are going up, it's eventually going to run out of parking lots to convert to vertical space. I think developing new talent-attracting centers is going to be important regardless; better to get the ball going before it becomes an unavoidable necessity. </two-cents>
1.01^25 = 1.282 or 28.2% growth. Sounds like a good bet to try to grow economic activity in the region if the immigrants are typically educated and are net-positive contributors.
Canada's total fertility rate (TFR) is 1.47[1] which is well below the natural replacement rate of 2.1. I'm not blindly advocating that we grow at any cost, but it's important to note that as bad as the job situation seems to be across the country today, it feels like it would be much worse if our population continues to shrink indefinitely.
Japan's stagnation over the past couple of decades seems to be one possible path that would have awaited us if Canada hadn't take steps to increase the population.
[1] https://www150.statcan.gc.ca/n1/daily-quotidien/200929/dq200...
Population growth (at a much lower more sustainable rate) can be incentivized by literally paying people more money to have Children. And did it occur to you that perhaps our low birthrate has something to do with the increasing lack of opportunity to improve in this country?
Finally, I am actually against the concept that the country must have constant population growth. Population growth comes in natural waves where some decades it will be high, and in others it will be low. The drop in birthrates many believe will cause a "sky to fall" scenario, which simply isn't true. It is parasitic to expect and demand constant population growth, especially at the cost of people's standard of living.
Some countries tried this approach with mixed results.[1] Given that we're both worried about the debt-to-GDP (i.e. profligate deficit spending by the federal and some provincial governments) I think the budgets are better spent attracting immigrants with skills, education and in many cases capital assets they bring to the country rather than baby bonuses.
Quebec still pays a baby bonus[2] but a Stats Canada study[3] showed their fertility rate over four decades was only 1.59 vs. Ontario's 1.46 -- still well below a steady-state no-growth replacement rate of 2.1.
>>And did it occur to you that perhaps our low birthrate has something to do with the increasing lack of opportunity to improve in this country?
This plays a role, but a lot of economic thinking (rightly or wrongly) finds a strong correlation between how developed a country is and declining TFRs even when there is a boom period of economic growth and opportunity.[4][5][6]
[1] https://www.prb.org/low-fertility-countries-tfr/
[2] https://www.rrq.gouv.qc.ca/en/programmes/soutien_enfants/pai...
[3] https://www150.statcan.gc.ca/n1/pub/75-006-x/2018001/article...
[4] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4255510/
[5] https://www.un.org/en/development/desa/population/events/pdf...
In 1985 our population was 25 million, and today it is now 38 million. Most of that population growth can be attributed to mass immigration. But we have no new cities or towns. We are simply crowding ourselves out of the minimal amount of cities and arable land along a southern strip that we can inhabit.
Also I don't think Japan is a negative example of population decline. They are an example of a country being able to maintain its standard of living, productivity, and its economy despite a stagnant population.
I strongly believe that if population growth through mass immigration continues (and mostly likely will), standards will continue to worsen across most of the country.
Perhaps to put a more human perspective, I graduated with a STEM degree during a recession and it was horrible. Many classmates had their careers set back by many years.
If I have to choose again between prosperity and economic growth that seems to be strongly correlated with a growing and educated population via immigration vs. affordable housing coupled with few economics opportunities, I'll choose the first option almost every time.
There's no point being able to afford housing if there are no economic opportunities in the area. Detroit at its peak in the 1950s had a population of 1.8M and was the 5th largest city in America, but is now a shadow of its former glory due to various factors and it's population only 680K (37% of its peak). Incidentally, nearby Windsor seems to have experienced very gradual population growth (less than Toronto) but its economic prospects still look pretty bleak.
It seems like you believe something like that could never happen to Toronto because the Golden Horseshoe is one of the few habitable places to live in Canada, in which case we'll just have to agree to disagree on this counterfactual.
Edit: I am basically criticizing the article linked from the comment: https://nowtoronto.com/lifestyle/toronto-real-estate-afforda... Apart from the calculation wrong I also think the numbers/assumptions are not good
For interest, according to https://turbotax.intuit.ca/tax-resources/canada-income-tax-c... net on $170K is $111,547, meaning closer to $11K / year
It should be noted though that it is pretty rare to reach $175K salary in the GTA before turning 30 (Average household income in Toronto is sub $100K[3]). Therefore for the majority of people it will take more than 18 years to build up that down-payment, which could be where the number in the article came from.
[1] https://toronto.ctvnews.ca/average-gta-home-price-to-top-1-m.... [2] https://www.moneysense.ca/spend/real-estate/cmhc-tightens-mo... [3] https://www.toronto.ca/city-government/data-research-maps/to...
The housing market can only grow as far as people are willing and able to pay for. Sure, you may have a few international investors distorting the picture, but for the wider masses of homes you still need a strong local base to prop up the average price.
My impression is that in Toronto, we went from a market that's affordable enough for lower-to-mid-income households to a market that's only affordable to high-income households. Apparently there are still enough people to finance this. But with another doubling of prices vs. salaries, I feel like even high earners wouldn't be able to buy in en masse, and that's where there's a limit to price growth. Not sure about the exact number, but we're probably not far off from it at this point.
There's also the issue with interest rates, which may be able to fall a little further and dip into negative territory when the next regression comes, but we probably won't be able to replicate the decrease in rates over the last 10 to 30 years. And lower rates are really what drove up housing prices in the recent past.
Of course, if companies start to approach Bay Area salaries, we'll raise the price growth limit as well. Personally, I don't worry too much about housing options for software developers and more about the gap between us and the low-wage retail, restaurant, underpaid or underemployed rest of the city. Who cares about home ownership when your friends are moving back to their parents in the prairies.
Where does that idea come from? Even before COVID-19 the job data was indicating that the hottest job markets were in (certain) small town/rural areas and that gap widened further once COVID-19 hit. The big city, especially Toronto with it being on lockdown for many months now, is where you're more likely to struggle to find work.
However, with all the people leaving the cities(it was an issue even before current 'work at home' situation, but even greater now) they push out local buyers.
Wages outside the cities have stayed fairly stagnant(asides min. wage). And buyers simply can't compete with 'big money' coming from people having sold their property in a city.
A quick glance at this makes one woozy. It feels after the '08 crisis just about everyone lost their lunch. However this modern crisis, it feels like upperclass got out ahead while lower classes simply lost. https://img.take-profit.org/graphs/indicators/money-supply-m...
I think there are definitely ways out, just not ones that please everyone involved.
I for one don't even understand what Toronto as a city does (I've lived here for 20+ years).
What valuable services does Toronto provide? I see bank skyscrapers downtown, some tourist attractions and a whole lot of people sitting in offices that need not be downtown, doing dubious work that largely need not be done or that can be automated with a bit of effort.
Am I way off here? For me, it's not just real estate that's gone mad, it's the world economy that enables this crazy existence of cities that produce nothing and yet millions of people live in them.
It's almost like trying to write software with every member of the team spending 9/10 of their time jockeying for power, with the product being an afterthought no one gives much credence to.
That's what living has felt like thus far - people are completely engulfed in making sure they get theirs (work at FAANG on these forums), followed by making sure their kids get theirs. At some point, there's got to be someone who says hey, you know this rat race is human made and we can totally try something else right?
The Canadian government is working as hard as they can to divide the country into owners who have homes that make more money than they do, and a permanent underclass of renters that can't possibly catch up with the price increases no matter how much of their money they save. Canada (or at least Southern Ontario and BC) is at a point where being born 5-10 years earlier is a bigger quality of life difference than the difference choosing to be a customer service worker or a lawyer.
Toronto homes were up 30% through 2020. They doubled in the 5 years before that. Being born 5 years earlier is the difference between renting with roommates forever, and being a home owning real estate millionaire. It's going to start creating really weird social dynamics soon.
Like what is a city which is well functioning, where the citizens like the government?
https://en.wikipedia.org/wiki/Rob_Ford
https://en.wikipedia.org/wiki/Timeline_of_Rob_Ford_video_sca...
Boundaries have moved in recent years, but I think this behavior is still outside of normal for politicians.
(not many members of the Socialist Party you can say that about these days)
This just proves that you don't know how housing works. I'm not even talking about the market itself. I'm just talking about the concept of being allowed to live in a building for money. You have to pay rent to live in a house/apartment. Alternatively you pay a mortgage or you buy the house outright.
None of this applies to road infrastructure, you don't pay toll to use a wider road. It's a direct subsidy to people who like driving. You would have to be extremely stupid to not understand that wider roads will lead to more driving. There is nothing preventing you from using public infrastructure wastefully precisely because it's free. Free suffers from tragedy of commons, everyone knows that.
If you use housing wastefully like by keeping it vacant you personally pay for this loss yourself. You're on the hook for your own behavior. People also get to decide whether they want denser apartments meanwhile the city planner forces road construction upon you whether your neighborhood really needs it or not.
This isn't really right, you're confusing 60s style city planning with the modern approach. 60s style "urban renewal" built a lot of freeways everywhere without asking and destroyed many poor neighborhoods. This caused a backlash and the start of urban environmental activism (e.g. SF getting rid of the Embarcadero highway), and urban planning switched to the exact opposite approach it uses now, which is to never do anything without 5000 community meetings.
The result of this is… nothing ever happens, because the only people who show up to community meetings are retirees who don't want anything to change; nobody else has any free time. These people are less against roads than they are against houses though, because they mostly have no opinions other than hating traffic and liking free parking.
Particularly Canada. Government policy has destroyed Northern Ontario. Everyone is crowding into Southern Ontario.
The defining trait of modern Canada is doing less with more. This country has given up on building infrastructure. It's given up improving.
Sounds like half the world right now.
Toronto 2014 - 55%
Toronto 2010 - 51%
--
Boston 2017 - 29%
Boston 2013 - 38%
Boston 2009 - 31%
--
Chicago 2019 - 35% (first round)
Chicago 2015 - 34% (first round)
Chicago 2011 - 42%
--
NYC 2017 - 18%
NYC 2013 - 13%
NYC 2009 - <11%
--
LA 2017 - 20%
LA 2013 - 23%
LA 2009 - 18%
--
Vancouver 2018 - 39%
Vancouver 2014 - 44%
Vancouver 2011 - 35%
--
London 2016 - 45%
London 2012 - 38%
London 2008 - 45%
--
Tokyo 2020 - 55% (during pandemic)
Tokyo 2016 - 60%
Tokyo 2012 - 63%
--
Paris 2020 - 40% (during pandemic, lowest turnout on record ever)
https://www.toronto.ca/311/knowledgebase/kb/docs/articles/ci...
https://www.wbur.org/news/2017/11/08/voter-turnout-boston
https://chicagoelections.gov/en/election-results.asp?electio...
https://en.wikipedia.org/wiki/2009_New_York_City_mayoral_ele...
https://en.wikipedia.org/wiki/2013_Los_Angeles_mayoral_elect...
https://www.cbc.ca/news/canada/british-columbia/voter-turnou...
https://en.wikipedia.org/wiki/2012_London_mayoral_election
https://www.france24.com/en/20200628-liveblog-low-turnout-in...
Only the most stupid politicians would want to kill the peoples' prosperity by popping the bubble, wouldn't they?
There are literally thousands of threads that repeat the same arguments over and over. The original poster may as well be quoting any of them without any new insight into the economics behind it.
Once you’ve been on reddit for a while, you realize how pointless it is to engage in these discussions since people only bring in their emotions and not much data.
The problem isn't the numbers, it's breaking into the patronage and power networks. That's not a numbers game. It's a relationship, influence, and networking game. And some elements will be corrupt, while others will be about carefully cultivated appearance management.
Thank goodness some people get into politics anyway, but it is not a rational choice for a utility-maximizing actor.
It does take a lot of patience though; you won't get much done in the first year or two.
If we look at social movements of the past century, they weren't easy on the members but many of them were successful in bringing about change.
I don't know when it became fashionable to only do things that guarantee success within your lifetime and openly dismiss any other way of life but that's not how people who actually make a difference live.
For IT folks, sure, pack your bags, go to a tropical community built for people with money and live in paradise. What about everyone else?
The federal government is also considering to step in to try and "solve" the problem, and this only means the problem is going to get worse.
I am not joking when I say that when the Canadian real estate markets crash - it is going to be absolutely disastrous for this country as it is basically the tent-pole keeping the entire thing propped up. Our debt to GDP is out of control. Our federal government keeps borrowing and spending on things that are completely inneffective (and bragging they spent the most than any other country). My gloom and doom prediction is our currency is going to be absolutely worthless in two years time.