[waterlooman]

>If a new grad wants a starter property in the city then perhaps start with the purchase of a studio/1-bed.

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.

[bentlegen]

13 years ago in 2008 the 5 year fixed interest rate on a mortgage was 4.45%. The following year in 2009 it was below 2% because of the great recession.

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.

[bentlegen]

Looks like I was quoting variable rate figures, and not 5 year fixed interest rates, which were substantially higher than their variable counterparts (7.15% in 2008, 5.79% in 2009).

Source: https://www.superbrokers.ca/tools/mortgage-rate-history

[otoburb]

>>The standard of living and affordability has objectively dropped for young people today. [...] But according to some people, hey you can still get into the market! Just buy a condo!

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.

[elixirnogood]

I've lived in both Bay Area and Toronto. Toronto has become absurdly expensive. You can get a 3-4 bedroom modern townhouse in Dublin/Pleasanton for 850K USD. It's common for a senior software engineer to make 200-230K. You can't buy an equivalent housing in Toronto for 850K CAD. Crappy townhouses in Richmond Hill go for 900K - 1M+ and similar housing will be 1.2 - 1.4M. it's also extremely difficult to make 200K+ CAD in Toronto (senior engineers make ~140K). A relative of mine does mortgages so has accurate statistics on how much people make.

[find]

(I'm actually immigrating to Toronto later this year.)

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?

[dsomers]

Don’t listen to this guy. I’m Canadian and lived in Toronto for eight years. Toronto housing is expensive because of lax lending, bad zoning, and bad regulations. That’s it, Canadians are to blame for this. For an example Berlin is a similar physical size and population as Toronto, and has similar rate of high immigration, but has a lower cost of living relative to salaries. This is guy may not be racist, but he’s doing the classic lazy thing of blaming newcomers when its really the locals that did this to themselves.

[waterlooman]

I am blaming our immigration policy, not the "newcomers" as you say. Newcomers are obviously just doing what is best for them personally. Also, more than half of Germany's population rents housing. Most Canadians would not be satisfied with that.

[dsomers]

And your still wrong. Too much of Toronto is zoned for single family homes which is the main driver of lack of affordable housing. When you walk around midtown Berlin you don’t see any single detached houses with big front yards. What you see are mid rise apartment blocks that the city of Toronto literally makes illegal to build in large parts of the city. Then you have the federal government that has totally failed to pump the brakes on lending. This is 100% above bad planning by Canadians, stop blaming immigration it’s a lame cop out when the city only has a population density of about 4500 per sq km which is quite a bit on the low side for a major city. Look in the mirror.

[waterlooman]

Look you can use whatever mental gymnastics you like to insist why we should all be content living in tiny condos and literal commie blocks but as I stated nobody wants to live in that because we have better standards. People want affordable single homes to raise a family. The solution is so absurdly simple yet you grasp at straws to avoid it.

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.

[dsomers]

I suppose you don’t read anything about population demographics in Canada. If you did you’d realize we have a very low birth rate. Without immigration Ontario and Canada will fail, like Italy and Japan we’ll be stuck in economic stagnation and ever increasing debt load, until we can’t pay for basic social services or people are forced to work 80 hour weeks to get by.

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.

[waterlooman]

It is not a contradiction and it is not wrong for immigrants themselves to want to lobby for strict new limits on immigration numbers. The rest of your question/argument sounds like an appeal to emotion or guilt.

[refurb]

Why would you expect a city to remain affordable forever? Like if my grandparents bought a home in lower Manhattan I should be able to too?

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.

[waterlooman]

Toronto is not a world class city like NYC, as much as it wishes it was. Toronto buckling under the weight of immigration numbers is due to the artificial population growth the government has mandated every year since 1988.

[didibus]

What makes you think lowering the number of immigrants coming in would lower the prices of housing? Any thesis around it?

[waterlooman]

We airdrop a population the size of Waterloo region (500-600k) of people into the country every year. They need somewhere to live. I don't think I need to say much more. I am aware that there can be other factors, but this is the (as I said) elephant no one wants to discuss publicly.

[didibus]

The 2020 stats say it's 250k, so not quite 500k/600k. But that's only the nominator, the population is aging and dying, and the birth rate is low, so the fact that 250k immigrants come in per year doesn't actually mean there is a need for more housing.

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.

[waterlooman]

Keep in mind that your numbers do not include international students as an immigration pathway and the number of people here on 10 year residency which can include "temporary" foreign workers. For example in 2019 there were 640k international students in the country, a significant percentage of them will also choose to stay here or are here on 10 year visas and they are not counted in the stats you gathered. There are an additional 550,000 TFWs here, many on long term visas. Again, not counted in your stats, nor are illegals.

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.

[didibus]

I'm interested in real facts, thesis, explanations with substance.

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.

[waterlooman]

The solution is so simple, our population growth rate is too high relative to housing production, so the quickest, most immediate and obvious solution is to reduce immigration significantly. Within a couple years you will see housing demand fall and with it, prices! This isn't rocket science. And our economy must be able to sustain itself on a steady state population or we have a serious structural problem. You can still have immigration, but it must not be detrimental to the people living here.

[duhast]

House prices in Australia keep going up despite zero net immigration.

[aborsy]

Immigrants typically concentrate in big cities, increasing demand for limited housing and jobs.

[didibus]

I don't disagree that this is a possible hypothesis, but I have a problem with weasel words like "typically". Is this the case in Toronto? And is it the case that it is in large enough quantity and that they have the money to put the kind of pressure to single handily raise the prices of housing to the levels we have today?

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.

[DC1350]

Econ 101?

[didibus]

I don't think it's as simple as that. I tried to look it up a little, found this: https://financialpost.com/real-estate/immigrations-impact-on...

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.

[astrange]

If you're posting "Econ 101" or "supply and demand" in response to a question about people, whether it's labor or immigration, it means you're getting the wrong result. People who do this always forget to consider both supply and demand instead of just the one that makes things look worse.

(Immigrants are a positive demand shock because they increase your customer base.)

[Aeolun]

Is 1% immigration per year a lot?

[OJFord]

Canada is crazily underpopulated compared to the UK for example - which is about the geographic size of.. what, Ontario alone maybe, but has double the population of all of Canada.

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?

[waterlooman]

I would guess because most of the land in this country is not arable (fertile) or hospitable, so even though we have lots of land, only the southern strip is worth populating.

[lhorie]

I don't think that's the reason. Barrie has a ton of farmland and it's just a hop away from Toronto. It's just that there's nobody incentivizing companies to put down headquarters in these smaller municipalities.

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.

[jpetso]

Milton doesn't necessarily have more capacity or willpower to offer tax breaks than Toronto, and the incentives for companies are stacked.

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.

[lhorie]

> Maybe with a drawn-out WFH trend this could change

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>

[waterlooman]

Yes, this is extremely high. It is an exponential growth curve, not linear. What would that growth be after 25 years of constant 1% growth/year?

[otoburb]

>>What would that growth be after 25 years of constant 1% growth/year?

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...

[waterlooman]

And if 28% population growth over 25 years results in insane housing affordability for younger generations, why are you still fine with that? I really don't understand this argument. You value total population growth and total economic growth over standard of living? Because with current trends it should be obscenely obvious that this approach isn't working.

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.

[otoburb]

>>Population growth [...] can be incentivized by literally paying people more money to have Children.

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...

[6] https://en.wikipedia.org/wiki/Income_and_fertility

[waterlooman]

I am not sure what you are showing other than that you believe our population growth from mass immigration needs to continue despite the negative outcomes.

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.