[AlimJaffer]

No chance this crushes the 'bubble'. Record immigration, developers have greatly reduced housing starts, and people will do anything to keep their mortgage as asset prices continue to rise.

There's no political will at any level (muni, provincial, federal) to build housing, remove zoning, to reduce immigration to reasonable levels, and it's starting to feel hopeless.

Average rent for a 1br in Vancouver is $2250 - an individual following the 30% rule needs to make 90K/year to justify that. The system is broken and we'll continue to hear platitudes from the government, and that goes for both the Libs and the Cons.

[arecurrence]

Every time I hear the Canadian government responding to this housing crisis... the only thing they do is pass policies that enable people to buy even "more" expensive houses.

For example, their big move last year was to let people sock another $8000 away to put towards a house tax free while at the same time increasing immigration to eye popping levels. Another thing to note with Canadian immigrant strategies, these numbers often don't include "temporary" students and others which use the program "on mass" to immigrate into Canada if they didn't succeed through other means.

An immigration explosion is typically excellent but it must be matched with housing development growth and Canada is literally doing the opposite... mind boggling.

[bryanlarsen]

What should the Canadian federal government do? Housing is a provincial and municipal responsibility. They're the ones that set zoning and housing regulations.

[arecurrence]

Canada actually has a national crown corporation that exists solely to improve housing affordability https://www.cmhc-schl.gc.ca . They funded or built significant housing supply for decades up until the 1990s when their funding plummeted. Wikipedia has an excellent history write up of CMHC. https://en.wikipedia.org/wiki/Canada_Mortgage_and_Housing_Co...

[donmcronald]

Yep. I didn't read the Wikipedia article, but, AFAIK, there used to be more non-market or co-op housing in Canada where the cost of rent, etc. was tied to the actual costs instead of what the market will bear. That acted as a check on runaway greed since it gave people a good comparable (at least for rent) that was based on fair value rather than maximizing profit.

[Tiktaalik]

This is only arguably true because Jean Chretien decided to completely disengage and walk away in 1993 to solve his budget problems.

Prior to this the Federal government was deeply, deeply involved in housing in this country, both literally building social housing and also incentivizing both social, coop and market housing through huge amounts of tax expenditure.

Accordingly there was an enormous amount of apartment development through the 60s/70s when the government was most involved in incentivizing housing, and then as investment was cut down, it eroded all the way to nothing.

After the feds walked away it got to the point where nothing was being built at all and the country was just coasting. No one built social housing in Nova Scotia for 30 years for example. https://globalnews.ca/news/9784037/ns-public-housing-stagnan...

There is no single silver bullet to our housing problems, but honestly if we had to look for one, some single thing that had the biggest contribution, it probably would be that 1993 budget.

[AlimJaffer]

They could at the very least not import 1M a people a year (many of whom come here to study at diploma mills that result in no real career skills and considerable debt) at a 38M population, and limit corporations and non-citizens from buying property.

It's on the provinces to get rid of zoning and speed up development of new housing starts, but the Feds are pouring gasoline onto a house on fire with no regard for the rest of us. We wouldn't have such a significantly declining birthrate if people could afford to have children of their own in Canada.

[voisin]

Is it 1m per year or 1m since COVID began? I dug up stats a few weeks ago and the best I could find was 400k or so in 2022.

[rpeden]

It's about a million if you include non-permanent residents: https://www150.statcan.gc.ca/n1/daily-quotidien/230322/dq230...

I think it's relevant to include them here because even if they're not staying permanently, they still need places to live.

[bryanlarsen]

AFAICT, that's double counting. IOW, a significant portion of non-permanent residents eventually become permanent residents, and get counted when they become permanent residents.

[RandomBK]

The Federal government controls immigration policy, and also wields tremendous power through taxation.

They also control inflows of money from outside investment.

[Tiktaalik]

Yep it's the taxation folks.

For example one of the biggest costs on apartment builders that dissuades them from building apartments is the HST. Developers are constantly saying this makes their projects unviable and kills them.

The Federal government could waive the HST tomorrow and massively incentivize apartment development.

The Liberals even promised to do this in past campaigns, then reneged on this.

In the past when apartments were being built rapidly it was aided by enormous tax expenditure from the federal government.

[bryanlarsen]

Huh? The HST is a consumer end-user tax. Any HST that businesses pay is fully refundable.

[Tiktaalik]

If it was a condo development being sold, then yes the end buyer of the condo would pay, but if it's a purpose built rental, then the builder has to pay the tax.

> Residential builders sometimes face unexpected GST/HST liability due to the self-supply rules in Canada's Excise Tax Act. In effect, the self-supply rules deem a builder to have sold to itself a residential property at fair market value if the builder constructed or substantially renovated that property and then either rented it out or personally occupied it.

In effect this makes purpose built rental (PBR) dramatically less viable than condo development and a core reason why builders basically stopped building PBR entirely.

Setting aside the discussion around whether PBR or condo is better to build etc, the core point here is while yes, housing is a provincial responsibility, the Federal government's taxation policies have a dramatic impact on the sort of housing that is built in this country.

[jrockway]

"We will give any municipality that fills out this form $23,800,042 to build affordable housing; each 2 bedroom apartment must be sold for $123,456 and cannot be sold above $234,568 for the next 15 years."

[oliwarner]

Nationalise homebuilding!

It's silly to pretend that large-scale homebuilding isn't being done with profits that only incentivise restricted volumes of building. Federal or state building could rectify supply and stabilise prices.

That said, it's decades too late. We're at the top of a tall, steep hill. As soon as enough people start walking away from their mortgaged homes because they can't afford repayments —which will happen with base rates so high— the market will crash.

[donmcronald]

> the market will crash

I think there's a good chance investment firms buy up everything. If people are walking away from their mortgages that means the properties can likely be bought below market rates, especially if they can do bulk or quick deals with banks.

As supply consolidates the market rates will keep going up, so the smart choice for anyone with a huge investment in the market is to just keep buying until they own everything, right? Don't let the market crash. Instead, prop it up until you own so much of it that you effectively make the rules and set the market rates.

[oliwarner]

Investment firms are already facing massive holes in their books as office space around the world goes unlet and devalues.

In my area we're already seeing people trying (and failing) to sell at reasonable prices. The average mortgage repayments are set to rise by £6kpa. It won't be afforded for long.

Yes, I'm sure someone will clean up, but it won't buoy prices and it'll only make the long term picture worse.

[voisin]

Canadians can’t walk away from their mortgages the same way as Americans. Mortgages are recourse to all your assets.

[oliwarner]

Canadians can file for bankruptcy. That's essentially the at-scale risk of what we're talking about here.

The IMF says Canada is the highest risk market for this collapse right now too. It's going to be a rocky few years.

https://financialpost.com/news/imf-warns-canada-highest-risk...

[mitthrowaway2]

Indeed, it's a terrible situation. If it does not crush the bubble, it will be interesting to see how it plays out. At higher interest rates, shelter becomes an ever increasing component of core CPI growth. There's about another year remaining before this feedback loop makes itself impossible to ignore. Otherwise, non-shelter prices will have to drop quite significantly for inflation to moderate with such pressing increases in rents and mortgage interest. But that would be indicative of a recession, which would put many mortgages in jeopardy. It could also lead to a populist anti-immigrant backlash, which might reverse the only bullish fundamentals for housing.

[xethos]

> There's no political will at any level (muni, provincial, federal) to build housing, remove zoning, to reduce immigration

I see at least one level that sure gives the impression they want, and are subsequently demanding, more housing. I'll give you the fact that it's neither Libs nor Cons though.

https://www.nsnews.com/bc-news/bc-prepares-to-remove-some-ho...

https://www.timescolonist.com/local-news/province-reveals-10...

[VancouverMan]

> to reduce immigration to reasonable levels

Given the current situation, a reasonable level would involve a negative immigration rate.

The "temporary foreign workers" and the foreign "students" could immediately return home, for example.

[voisin]

This would help housing prices but otherwise crush GDP growth. The problem is that there are no good answers now and governments are really bad at choosing from terrible options so they’ll just find a way to kick the can down the road and make it 10x larger, which is why we are in this place to begin with.

[willhslade]

Well, Canadian / Anglosphere governments, anyway.

https://www.sightline.org/2021/05/27/yes-other-countries-do-...

[voisin]

> There's no political will at any level (muni, provincial, federal) to build housing, remove zoning, to reduce immigration to reasonable levels, and it's starting to feel hopeless.

Ford seems pretty serious about it in Ontario, freeing up new development land, banning municipalities from holding developers hostage until they pay random art contribution fees and other pet project fees, gutting heritage group powers and other NIMBY bullshit, and granting strong mayor powers. I don’t like the man’s politics generally but I do feel like he is most serious about the housing crisis.

[pesfandiar]

The BC government has started twisting some municipal governments' arms to loosen some of the zoning. The effects may be too little too late though.