Canadian real estate prices have surged in almost every market, with a typical home price doubling in many regions. A median household in major cities like Toronto and Vancouver would need to save over 20 years for just the down payment, more than 3x the historic average. Seems absurd? The outlandish scenario was apparently a […]
Canadian real estate prices have surged in almost every market, with a typical home price doubling in many regions. A median household in major cities like Toronto and Vancouver would need to save over 20 years for just the down payment, more than 3x the historic average. Seems absurd? The outlandish scenario was apparently a […]
I think what’s being said is: if housing prices lower, you are going to ruin some people’s retirement plan – at least some of those people will have worked hard their entire life to purchase and pay off that house. There’s been some incentive to save in this way as well (first time home buyer plan, tax deductions for more ecologically sound houses, that kind of thing).
I suspect he’s probably right, that letting house prices drop would over all make things worse in Canada. My goto solution would be to subsidize housing by increasing taxes on corporations and people/corporations that own more than one house. but i’m not any kind of expert
If I stay in my house for my retirement, why would I care how much it is worth? I would only care about monthly costs like energy or insurance, what am I missing?
People have been told that their house is an investment first and a home second for years. This has caused some people to not be happy they own a home, they can only feel happy if that home is getting more valuable. It really is an unfair system but many people aren’t intentionally being greedy, they are playing by the rules they were taught and many are thinking towards the future for their children. We can’t blame poor policy and lack of housing investments/developments on the average owner.
Nearly every other physical asset will lose value with time and use, such as a car. Somehow houses can maintain value, and even go up as their condition worsens because we have been lacking in supply and increasing demand for at least a decade.
The value of houses are tied to the value of land, and you can’t make (much) new land. That’s why houses in economically advantaged cities are more expensive than houses in economically disadvantaged cities or out of the way places (unless those places are desirable for being out of the way).
That said, we can do things to get more people per square km in cities, even without going to high rise apartments. And certainly, not promoting more effective housing options hasn’t helped the price of homes, either.
In many municipalities the majority of residential zoning only allows single family homes, sometimes with minimum lot sizes, set backs and parking minimums. We’ve made it legal and incentivized to only build spread out and inneffecient housing regardless if thats what the city or people really needs or not.
@Mkengine@karlhungus You are missing the high cost of aging in a retirement home/long term care facility. Because you retire in a home that you worked decades to pay off does not mean that will be your last “home” before death. Some retirement “homes” are charging $60,000 year.
Assuming you’re talking about a full service retirement home and not just a 55+ building $5000/mo seems like a good deal to me, at least from a BC perspective. You’d be looking at almost $2000 just to rent anywhere, you’d be lucky to have a meal cooked for you for $10, $20 if it’s decent quality, that’s another $900-1800/month. Once you consider utilities you’re pretty close to what a new renter would be paying if they refused to cook for themselves.
This is true. The idea that housing-as-asset is a gift to middle-class elderly is a false promise. The middle class elderly will have all their assets stripped by the old-age industry regardless of how their home appreciated while they owned it.
Sometimes home owners will sell their house after retirement for something smaller, live off the difference, then sell that house and use the money from that for long term care, or inheritance.
There’s also the obvious: they worked for something, possibly quite hard, why do they have to pay the price for others? Presumably they’ve been paying taxes all along, and have already been contributing to the greater good.
I guess my feeling is, it’s not so simple to just wreck housing prices. I absolutely feel like corporations, and probably some ultra wealthy don’t work that hard and get most of the rewards (or aren’t even people), like if the money has to come from somewhere there is a clear set of people who could afford to lose some wealth, and not materially effect their life; and that’s not necessarily single dwelling home owners.
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I think what’s being said is: if housing prices lower, you are going to ruin some people’s retirement plan – at least some of those people will have worked hard their entire life to purchase and pay off that house. There’s been some incentive to save in this way as well (first time home buyer plan, tax deductions for more ecologically sound houses, that kind of thing).
I suspect he’s probably right, that letting house prices drop would over all make things worse in Canada. My goto solution would be to subsidize housing by increasing taxes on corporations and people/corporations that own more than one house. but i’m not any kind of expert
This is how I read his comment as well.
If I stay in my house for my retirement, why would I care how much it is worth? I would only care about monthly costs like energy or insurance, what am I missing?
People have been told that their house is an investment first and a home second for years. This has caused some people to not be happy they own a home, they can only feel happy if that home is getting more valuable. It really is an unfair system but many people aren’t intentionally being greedy, they are playing by the rules they were taught and many are thinking towards the future for their children. We can’t blame poor policy and lack of housing investments/developments on the average owner.
Nearly every other physical asset will lose value with time and use, such as a car. Somehow houses can maintain value, and even go up as their condition worsens because we have been lacking in supply and increasing demand for at least a decade.
The value of houses are tied to the value of land, and you can’t make (much) new land. That’s why houses in economically advantaged cities are more expensive than houses in economically disadvantaged cities or out of the way places (unless those places are desirable for being out of the way).
That said, we can do things to get more people per square km in cities, even without going to high rise apartments. And certainly, not promoting more effective housing options hasn’t helped the price of homes, either.
In many municipalities the majority of residential zoning only allows single family homes, sometimes with minimum lot sizes, set backs and parking minimums. We’ve made it legal and incentivized to only build spread out and inneffecient housing regardless if thats what the city or people really needs or not.
Investment property
@Mkengine @karlhungus You are missing the high cost of aging in a retirement home/long term care facility. Because you retire in a home that you worked decades to pay off does not mean that will be your last “home” before death. Some retirement “homes” are charging $60,000 year.
Assuming you’re talking about a full service retirement home and not just a 55+ building $5000/mo seems like a good deal to me, at least from a BC perspective. You’d be looking at almost $2000 just to rent anywhere, you’d be lucky to have a meal cooked for you for $10, $20 if it’s decent quality, that’s another $900-1800/month. Once you consider utilities you’re pretty close to what a new renter would be paying if they refused to cook for themselves.
This is true. The idea that housing-as-asset is a gift to middle-class elderly is a false promise. The middle class elderly will have all their assets stripped by the old-age industry regardless of how their home appreciated while they owned it.
Sometimes home owners will sell their house after retirement for something smaller, live off the difference, then sell that house and use the money from that for long term care, or inheritance.
There’s also the obvious: they worked for something, possibly quite hard, why do they have to pay the price for others? Presumably they’ve been paying taxes all along, and have already been contributing to the greater good.
I guess my feeling is, it’s not so simple to just wreck housing prices. I absolutely feel like corporations, and probably some ultra wealthy don’t work that hard and get most of the rewards (or aren’t even people), like if the money has to come from somewhere there is a clear set of people who could afford to lose some wealth, and not materially effect their life; and that’s not necessarily single dwelling home owners.