[sleepingadmin]

I am coming around to the opinion that the real estate market isn't out of control at all. The absolute complete opposite of the author here.

Doesnt make sense does it? But what if the underlying problem throughout the article? The overall PRICE of housing.

What if housing is only just a metric of the problem? Debt is money. Debt is generally speaking housing and transport. They will show the problem quickly.

What if it's the currency that's collapsing? https://tradingeconomics.com/canada/central-bank-balance-she...

https://tradingeconomics.com/canada/money-supply-m0

https://tradingeconomics.com/canada/money-supply-m3

These are often disregarded as not showing the whole story, but what if they are showing the whole story?

https://tradingeconomics.com/canada/private-debt-to-gdp

Canadians are 304% in private debt to gdp.

https://tradingeconomics.com/canada/government-debt-to-gdp

Canadian government debt has jumped remarkably, but they also haven't been tabling any budget and reporting on this debt anymore.

https://tradingeconomics.com/canada/government-debt

Yes you see that right, the basic income the Canadian government over covid basically increased debt by 50% in a single year?

Balance of trade has been negative since the financial crisis: https://tradingeconomics.com/canada/balance-of-trade

Lets not forget our subnational governments are also not reporting on their debt anymore.

https://en.wikipedia.org/wiki/Ontario_government_debt

What if the currency is in collapse? The governments would know it and their immediate action would be to stop reporting their financials? Obviously tremendous debt held by everyone and government is the cause.

[throw8383833jj]

this is part of the issue but not the entirety. If it was just the currency that was collapsing you would see wages spiraling out of control as well.

i think, what we're seeing here is housing has been made nearly impossible to build by regulation and zoning. Also, large imbalances between where jobs are and where places to live are, exacerbate the issue immensely.

Over the course of the last decade, I've come to accept that things are the way they are because many many people want it that way. There is large scale support for ever increasing housing costs among the voting population. this is because most voters own real estate and they simply want to those values to go up and up forever, regardless of the consequences to the next generations and the future of humanity. I had noticed this taking place in the US but I've been seeing this phenomonen happening all over the world in the so called "first world".

[nathanaldensr]

I realize I'm likely in the minority, but my property value has gone up almost 100% since 2019, and I don't like it one bit. I'm going to be burned by property tax increases like everyone else. Even if I did sell, there's nowhere to move--and I'd be paying stupidly-inflated percentage-based real estate commissions on both transactions.

[throw8383833jj]

In CA you can have your cake and eat it too. My property values have gone up 30% just in the last year and yet, with Prop 13, my property taxes will only go up 2%.

can you imagine the long term ramifications of such a taxation policy? the guy who made 2 million $ in equity gains over the last 20 years is paying 5 times less property taxes than the poor schmuck with 0 equity gain who just bought the same exact house at 4 times the cost. sure they're both paying a lot of property taxes but the one who just bought into the system, is paying a lot lot more.

[theluketaylor]

If you're in Canada (or at least Ontario) huge upticks in property values across a city don't result in higher property taxes. Municipalities set their budget and then divide by the real estate value to arrive at each lot's property tax (the actual formula is more complex, but that's the basic concept, plus MPAC values lag way behind actual sales). When everyone's property goes up by the same amount no one's taxes increase.

It's still a very bad thing property values have gone up so much. This isn't free money; the cost is being extracted from young people and new immigrants trying to enter the market and it's turning our economy into a giant real estate shell game.

[nasalgoat]

In Toronto, commercial real estate carries the largest property tax burden - single family houses are the lowest in the entire province.

[imtringued]

One of the most important realizations that you have to make as an adult is that there are no conspiracies. If there is one billionaire supposedly doing something on his own behind your back you can bet that there are millions of people who are doing the same thing and think it is perfectly okay.

People complain about black rock buying everything up but guess what, regular homeowners are in it for the speculation as well and they vote in a way that gives black rock outsized power because they want their own slice.

[cyber_kinetist]

Welp, though the assumption "most voters own real estate" is becoming less and less true everyday.

[RC_ITR]

If you believe 'The currency is in collapse,' then I suggest you take out as much leverage as you can have to your name (Maybe even raise capital from institutions using your above diligence) and do a Soros-Style short.

Here's the playbook: https://theeconreview.com/2018/10/16/how-soros-broke-the-bri...

Good luck.

[ameminator]

I actually do believe the Canadian currency is in collapse and it absolutely changed my behavior (bought assets/stock in other countries, got a mortgage at 5% down, vs 20% down, other hard assets)

[RC_ITR]

I'm telling you if you have that much conviction, then you can profit it off that WAY more than you currently are with some simple financial instruments.

But as always this is not investment advice, because I disagree with the premise.

[ameminator]

It's possible to have conviction but recognize the possibility being wrong or that outside events can have an impact. With financial instruments, it's also possible to run into market-timing issues and outsized risk to reward.

On the other hand, it's easy to bet on hard assets (like real estate) and taking on debt when inflation is so high and rates are so low. It has the added benefit of not being sophisticated, requiring neither a finance nor an accounting degree.

[RC_ITR]

Conviction is literally 'firmly holding a belief or opinion.' If you firmly believe that currency is collapsing and your response is to buy a home, then you're leaving a bunch of money on the table and potentially not profiting from that at all.

If you think that interest rates are low and housing has a lot of reasons to inflate going forward, then I think we agree you're acting rationally, but that has almost nothing to do with 'currency collapse.'

[missedthecue]

If you are of the persuasion that western currencies are collapsing, what would you pair the canadian dollar with for your trade?

Soros paired the GBP with USD because the bank of England was having a difficult time defending the pound. The USD was not also at risk. It was completely unrelated to the situation happening in England. But if both the GBP and USD fell, Soros would not have made a profit.

[RC_ITR]

Lol whichever currency/asset you plan to use to measure your wealth in the future.

You're right, Soros borrowed pounds and sold them for dollars because he wanted more dollars. If you think CAD and USD are both going to collapse, then maybe think about the joys of your day-to-day life (coffee, heat, clean water) and use that as the other side.

It is very unlikely that USD collapses on a human life-scale without major disruptions in those supply chains.

[pydry]

Raising interest rates wont be far off if it is in collapse.

[sleepingadmin]

>Raising interest rates wont be far off if it is in collapse.

All I can do is point to the failed mandate.

https://tradingeconomics.com/canada/inflation-cpi

https://tradingeconomics.com/canada/interest-rate

[sleepingadmin]

>If you believe 'The currency is in collapse,' then I suggest you take out as much leverage as you can have to your name (Maybe even raise capital from institutions using your above diligence) and do a Soros-Style short.

Literally everyone I know is doing this. Crazy mortgages and all money into inflationary resistant assets. Gold, Crypto, etc.

[RC_ITR]

1) Wow you have really hardcore friends, I love it. 2) I hope they realize that in Jan-22, Bitcoin's inflation rate was like 30%+

[waterlaw]

The housing market is dictated by fiat. Both supply (lending) and demand (building) are a function of government regulation.