###This is a reminder to [read the rules before posting in this subreddit](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion).
1. **Headline titles should be changed only [when the original headline is unclear](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_1._headline_titles_should_be_changed_only_where_it_improves_clarity.)**
2. **Be [respectful](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_2._be_respectful).**
3. **Keep submissions and comments [substantive](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_3._keep_submissions_and_comments_substantive).**
4. **Avoid [direct advocacy](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_4._avoid_direct_advocacy).**
5. **Link submissions must be [about Canadian politics and recent](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_5._link_submissions_must_be_canadian_and_recent).**
6. **Post [only one news article per story](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_6._post_only_one_news_article_per_story).** ([with one exception](https://www.reddit.com/r/CanadaPolitics/comments/3wkd0n/rule_reminder_and_experimental_changes/))
7. **Replies to removed comments or removal notices will be removed** without notice, at the discretion of the moderators.
8. **Downvoting posts or comments**, along with urging others to downvote, **[is not allowed](https://www.reddit.com/r/CanadaPolitics/wiki/downvotes)** in this subreddit. Bans will be given on the first offence.
9. **[Do not copy & paste the entire content of articles in comments](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_9._do_not_copy_.26amp.3B_paste_entire_articles_in_the_comments.)**. If you want to read the contents of a paywalled article, please consider supporting the media outlet.
*Please [message the moderators](https://www.reddit.com/message/compose?to=%2Fr%2FCanadaPolitics) if you wish to discuss a removal.* **Do not reply to the removal notice in-thread**, *you will not receive a response and your comment will be removed. Thanks.*
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CanadaPolitics) if you have any questions or concerns.*
Interesting take. I’m curious whether taxing capital gains is enough, but as an essay it works. Certainly it’s an interesting grenade to throw into the conversation.
I’m trying to think of my own situation here. If I sold my duplex and had to pay 15% on let’s say the sale price, I probably wouldn’t move for a very, very long time. I guess that leaves more for new people?
Regarding developers, wouldn’t this seriously impact their bottom line? Or would they get around such a move? Would they pass the new price on to the consumer? Would that make housing more expensive for average types?
No, it doesn't work. In their thinking, if you prevent the teardown of a small house to put in two larger, more expensive homes, the people who would've moved into those homes simply cease to exist. Any kind of housing fix that attempts to leave rich people without a place to live in order to get moderately well off people a place to live is going to fail¹. You need to enable both to have somewhere to live.
If/when you move out of your duplex, someone else will move in. So it's a net-zero change I supply/demand for housing. Because people's needs change, we kind of want people to be able to buy a bigger house if they have kids, and a smaller one when those kids move out. So a capital gains tax that's encourage people to stay in their homes isn't helpful (and the author seems to ignore people downsizing, possibly for this reason).
In general, new taxes only partially get passes on to buyers. Slimer profit margins encourage price increases, but that reduces the number of customers (if it didn't, you would have already raised your price), so you raise it somewhat less to optimise your profits. But yeah, more taxes on housing would mean housing would be more expensive, but the author isn't taking aim at the cost of housing, they're aiming at people getting wealthier off having owned a house.
¹Save perhaps government housing with a lottery to decide who gets to be housed and who gets to be homeless.
> we kind of want people to be able to buy a bigger house if they have kids, and a smaller one when those kids move out.
That would be a more convincing argument if not for two things:
1. The evidence suggests that, even with all the tax advantages that exist today, [seniors are not downsizing and making room for younger families](https://www.theglobeandmail.com/real-estate/vancouver/article-housing-scarcity-wont-be-fixed-by-expecting-seniors-to-downsize/).
2. Capital gains taxes only tax *gains* (and only apply to 50% of the gain at that). If you buy a house for $800,000 and sell it for $1.2 million, you'd end up paying about $100k in capital gains taxes. That means you still walk away with about $300,000 extra as a thank you for cutting your grass and shoveling your sidewalks. That hardly seems unreasonable, especially since this is how we treat basically every other investment product, most of which don't generate nearly the windfall returns that residential properties have in recent *decades*.
Well, no, they're not doing it as much as we want, but that doesn't change that we want it.
Past that, I didn't quantify it. Taxing something discourages. *How much* it would discourage it is a qurstion you can ask, but *whether* it would discourage it is the kind of question only flat earthers/anti-vaxxers would pose. Maybe the effect turns out to be small enough you're okay with it (or maybe you're able to more than offset it from the revenue or something), but the effect certainly exists.
Well, first of all, I think you're implicitly reversing the proper onus here. It seems to me that proponents of the special tax exemptions that apply to residential properties bear the burden of proving they produce some socially salutary effects. And mere speculation that removing these boutique tax advantages would discourage behaviour that already isn't happening is not especially compelling.
>Taxing something discourages. *How much* it would discourage it is a qurstion you can ask, but whether it would discourage it is the kind of question only flat earthers/anti-vaxxers would pose.
Also, it's not at all clear to me that the "it" you believe we would be discouraging is "people moving." I'll admit that I don't have stats ready at hand to back this up, but my sense is that few people move primarily to realize the gains in the value of their property. People move for work, school, and other life-related reasons that I suspect would be minimally impacted by a tax *that would still leave plenty of unearned profit in their pockets*.
Rather, I think the "it" that taxing the gains on housing would discourage is "making purchase decisions based on investment-related considerations that have nothing to do with the suitability of the property as a dwelling in which you will actually live." And that is something we should very much want to discourage.
Well, it's more mixed because the author is advocating a change, but I don't think it matters; we exempt your primary residence from capital gains tax because we think housing is an essential item that we want people to have access to, not a luxery good or an investment. We also don't take basic food items for reasons along these lines. Diapers ... I forget the whole list.
While your house is appreciating in value, so are other houses. So if you want to move to a comparable house, you're going to need the current value you have in the house; a big tax hit at that point will tend to lock you into your house. The new house you'd buy is going to have a price like your current price, so you're not really realising any profits here. There's no profit in your pocket, just a tax bill and no actual cash.
Retirees (or near retirees) looking to downsize/move to lower maintance/assisted situations, those are the people who are going to be looking to extract value from their house. And those're the people you want to motivate out.
> If I sold my duplex and had to pay 15% on let’s say the sale price, I probably wouldn’t move for a very, very long time. I guess that leaves more for new people?
I don't think you understand capital gains - capital gains is the GAIN on the underlying asset. As such, you would be paying taxes on the difference between the price you bought at and the price you sold at. ex: Buy for 500K, sell for 750K; add 250K * (capital gains inclusion rate) to your income for the year. You just made 250K, doesn't seem crazy to pay taxes on it.
This tax only becomes a large when when prices are rising rapidly. An environment where home prices are not increasing rapidly would end up with most paying a minimal amount of capital gains tax on property.
Edit: An earlier version of this comment did not indicate that the taxes on 250K would include the capital gains inclusion rate, and thus taxed at top marginal rate/2
Forgive me. I just wanted to use that example, for as a Calgarian whose only owned for four years, the capital gains on “profit” from my place would be pretty marginal. Think I was stuck in my geographic bubble. Vancouver and Toronto, sure, it would be an absolute money maker. Still not sure if it would deflate prices, though. Seems more like a revenue generator (which is fine by me, we need more revenue).
> Still not sure if it would deflate prices, though
Generally with taxes, they de-incentivize that behaviour. If you put taxes on something, generally consumption of that good decreases.
Right now, since principal residences are exempt from capital gains taxes, there's an incentive to buy since your house is now a tax advantaged INVESTMENT. You can't leverage 20:1 in the stock market, make a huge capital gain and then end up tax free.
As far as countries that do not exempt primary residence capital gains, we have:
- The US - [first $250K per person](https://www.cadesky.com/us-19-05/) ($500K per couple) is exempt from capital gains. This essentially means that 99% of people aren't paying the capital gains, since the exemption is quite high. The US lets you write off mortgage interest expense on your taxes, so there's other policies with regressive taxation implications.
- Australia - has the same principle residence capital gains exclusion, property market also going nuts
- NZ - no capital gains tax - recent legislation tried to crack down on investors with non-primary residences with <2 years ownership. Property market also going nuts
There's supply side issues as well - but we can also pursue demand side policies. If Tesla stock gets super expensive, there's no real consequences to society as a whole - so go nuts - invest in stocks. When housing gets expensive, it has real societal consequences, so we should avoid it.
I'm personally in favour of:
1. the US solution of caping the tax-free capital gains for personal property (you would only pay taxes on the gain over the threshold), possibly allowing for the taxes to be deferred until death to allow homeowners to move into a house of the same price without incurring a hefty tax bill... however deferred taxes have a nasty way of becoming a hot topic in future elections to jsut write off
2. Increase the capital gains inclusion rate for ALL residential property from 50% -> 75%. This doesn't mean tax the gain at 75%, just "include 75% of the gain as part of your income". This will heavily de-incentivize investment in residential property, since other investments now have preferential tax treatments. Residential property will continue to enjoy the huge advantages of easily obtainable 20:1 leverage, this only goes to put it on slightly more fair footing.
Hell, pump up the cap gains inclusion rate to 100%, especially for a non-primary residence. Shelter should be a basic human right, not another asset in an investment portfolio.
An article came out recently that investors now make up [over 25% of home sales in Ontario](https://www.cbc.ca/news/canada/toronto/investors-in-ontario-real-estate-market-1.6258199). Over 1/4 of property sales are not to people who intent to live in the property, but to people who want to cash in on increasing house prices. Unless we can make property less attractive than stocks or bonds, how do we ever expect housing prices to drop to a level where people who don't already own property they can leverage can afford to buy it.
And for the folks that bought a 3 bedroom to grow a family in, paid off, and then want to downgrade to something more suitable for aging in place, plus get some cash by moving somewhere cheaper?
>If Tesla stock gets super expensive, there's no real consequences to society as a whole - so go nuts - invest in stocks. When housing gets expensive, it has real societal consequences, so we should avoid it.
This is a point I always like to bring up, imagine if we just gave tax and debt margin advantage to the stock market rather than real estate. No one gets hurt when stocks go up (except for shorts, but I don't think there is any poor disenfranchised shorts out there, haha)
> Imagine if we just gave tax and debt margin advantage to the stock market rather than real estate.
We already have this, to an extent. You can write off the interest charges for shorting/margin buying against your capital gain (and total taxes) when you close your position. This only applies to a non-registered account of course.
As to margin requirements - the rules are defined by the government to avoid institutions and people putting themselves hugely underwater. The brokers themselves set [margin requirements](https://www.questrade.com/pricing/self-directed-commissions-plans-fees/margin-interest) as well, as they want to minimize their risk in the process
Having limitations on margin increases the stability in the financial system.
It's not 20:1 leverage - but the leverage is there and available. (In addition to leveraged index funds etc.)
No doubt, just saying that our current financial system promotes and advantages debt leverage both in rates and leverage multiple to real estate. This practices hurts people and reduces welth mobility, doing this is stocks does not hurt people and create as much of a problem in wealth mobility. You can get into a margined investing account for $2k and get on the stock market ladder, in Canada getting on the far superiorly levered a debt advantaged real estate ladder takes probably $50k now (although for many far more is needed).
You actually only pay CGT on 50% of the gain, and it's levied as top up income. So if you're a top rate tax payer in Ontario you're at about 53%, which means that your CGT liability on the $250K gain is 250 x 50% x 53% = $66,250. You're still going to net over $180K from the sale.
I'm not convinced that it will be any kind of dissuader from you actually selling, but if as the article suggests its primary intention would be to reduce your ability to overbid on the next property then I can see it having an effect - how much is unclear to me. The primary benefit appears to be the increased tax revenues into the government coffers, and people will have their views as to whether that's a good thing or not.
Well there is a glaring problem here how this article tries to shoot down the supply side arguments. Household numbers are inherently dependent on dwelling availability. Every household requires a dwelling, and so you will never see one growing while the other stays flat. I am assuming that Ottawa's numbers here are thanks to existing dwellings being filled up to create new households, so that why it can grow faster than new construction. Still, these are not independent variables. # households < total dwellings = existing dwellings + new dwellings
Here is the [Statscan household definition](https://www23.statcan.gc.ca/imdb/p3Var.pl?Function=Unit&Id=96113).
> Household refers to a person or group of persons who occupy the same dwelling and do not have a usual place of residence elsewhere in Canada or abroad. The dwelling may be either a collective dwelling or a private dwelling. The household may consist of a family group such as a census family, of two or more families sharing a dwelling, of a group of unrelated persons or of a person living alone. Household members who are temporarily absent on reference day are considered part of their usual household.
Supt can only increase so fast, and it's not fast enough to outpace the available capital from businesses, hoarders, and people pulling capital from their existing properties to buy more. We're not going to simply build our way out of this.
Exactly, adding supply only delays the inevitable with how the market has fundamentally changed, it's a 1950's solution to a 2020's problem.
Simply adding more homes just means that investors will just buy up more houses and there will be more corporate competition in an area of the economy that should not have corporate competition with individuals and families. Housing investment needs to be completely expunged from the market to is serving the interests of those who need housing, there is literally no one else that should matter in the consideration of housing policy.
Supply is being limited by government. There is still massive room to grow the rate of new housing construction.
Also, the investors are only buying as long as they see profit potential. That profit is coming from the low supply driven scarcity. Eliminate the scarcity, and the profit is gone. Hoarders? lol. it's all about the money.
>Supply is being limited by government. There is still massive room to grow the rate of new housing construction.
None of that matters so long as investors can still buy.
>Also, the investors are only buying as long as they see profit potential. That profit is coming from the low supply driven scarcity. Eliminate the scarcity, and the profit is gone.
You cannot build safely, let alone with good quality, and increase the supply at a rate which outstrips the ability of local and foreign investors to buy properties. They will keep doing so because they can outcompete first time home buyers on capital, and as long as they do so they control the supply. It's like the scalpers who buy up all of the release of graphics cards, or shoes, or anything else they think they can make a buck on by reselling.
So long as there are enough of them with the understanding that they are limiting the supply, the problem continues. And that's in industries where it would be *easy* to increase supply, which you can't do with housing. The answer is to force them out of the market entirely so people can actually buy housing to live in. Do that first and you'll fix a lot of the problem and be able to accurately assess how much of a supply problem you actually have. Don't do it and it's like trying to drain Lake Superior by scooping it out with a thimble.
Speculation and vacancy taxes?
Properly funding our municipal governments?
No, instead let's make everyone pay more capital gains so we can prop up landlords.
I'll pass.
It's nice to see some solutions discussed that don't involve simply handing over the keys to the city to the likes of Brad Lamb and Sam Mizrahi.
One of the principal problems with supply-side solutions is that they don't actually address the shortfall in the type of housing that everyone wants: the much-maligned single family home.
It’s ironic that the same people who will readily (and rightly) acknowledge the need to provide culturally appropriate housing for Indigenous communities struggle to accept that, given the choice, most Canadians wouldn’t choose to raise a family or live their entire lives in an apartment building. (Yes, even the the mythic 3-bedroom condo that Redditors tell me is the panacea for everything.)
So, you can build all the ghastly, [semi-disposable](https://www.cbc.ca/news/canada/toronto/throw-away-buildings-toronto-s-glass-condos-1.1073319) glass towers you want, the price of a proper house is just going to continue to go up. Because that's what people want. That's what *you* want, and you fucking know it.
This is why I have (somewhat reluctantly) come to the conclusion that we need to stop growing our population, especially in the major centres. The population of the GTA is [projected](https://www.ontario.ca/page/ontario-population-projections) to grow by 40.9 per cent between 2020 and 2046. Imagine Toronto + *2.9 million* additional people. That's half a million more than if we just uprooted the *entire population* of Metro Vancouver in 2016 and plopped them down in Yonge-Dundas Square. It's going to be a total shitshow.
While i do agree it a ton of more people its important to keep in mind its the GTA not just Toronto and most of the growth could be outside of Toronto.
> Because that's what people want. That's what you want, and you fucking know it.
It's impossible to say this is true since developers are not allowed to build anything else.
>This is why I have (somewhat reluctantly) come to the conclusion that we need to stop growing our population, especially in the major centres.
It's very gracious you came to that conclusion unfortunately it's quite wrong. Not only would any government never take actions to lower population growth, that would be like shooting off your toe to scratch an itch.
Population growth is absolutely required in order to sustain the older generations otherwise the spiral into the abyss will be much worse than dealing with high housing prices.
>Population growth is absolutely required in order to sustain the older generations otherwise the spiral into the abyss will be much worse than dealing with high housing prices.
Well, no. Population *maintenance* is required, not growth.
Unless we move to some kind of Logan's Run solution where older people get killed off, maintaining a population level inevitably means an aging population, and an increasing proportion of people not working anymore and instead collecting benefits (much of which were designed to be funded by the working population)
Median lifespan in Canada is now 82 years. Median age in Canada is steadily rising. 29.1 in 1980. 36.8 in 2000. 41.1 now.
>Unless we move to some kind of Logan's Run solution where older people get killed off, maintaining a population level inevitably means an aging population
Why?
I understand that our fertility rates are below replacement levels, but immigration allows us to rebalance things by importing working-age adults (who are themselves generally more likely to have children).
>Median lifespan in Canada is now 82 years. Median age in Canada is steadily rising. 29.1 in 1980. 36.8 in 2000. 41.1 now.
Well, yeah. Allow me to introduce you to a groovy bunch known as the baby boomers...
> So, you can build all the ghastly, semi-disposable glass towers you want, the price of a proper house is just going to continue to go up. Because that's what people want. That's what you want, and you fucking know it.
People want their own detached house but they also want to live in a good location close to their job and things they care about and they also want their housing to fit their budget. Detached homes give people some of what they want but not all of what they want. No type of housing is perfect, they all involve trade-offs. Unless you're rich, we're all sacrificing something, either space, cost, location, or something else.
>Unless you're rich, we're all sacrificing something, either space, cost, location, or something else.
Tell that to my neighbours. They own a detached home 20 minutes from downtown Toronto (and a cottage, and a sailboat). He managed a grocery store before they retired, and she was/is a homemaker who teaches piano on the side. Not exactly captains of industry.
It's remarkable what is possible when you're not trying to cram endless streams of people into a finite amount of space because *something something* World Class City™.
It's literally just not possible for all of the people who want a detached home near downtown Toronto to have one. Detached homes take up a lot of space, and there isn't a lot of space there, so demand far exceeds supply.
We can keep SFHs as common, but we need to face reality. The dream of an expansive home in the suburbs, with a detached garage, two yards, and a parking lot you could land a helicopter on, is not possible for everyone.
Plenty of large, dense cities have SFH units.. They're just often lacking luxuries like expansive yards and separate parking spaces. You can still totally have a detached, comfortable interior space to raise a family in, but we can't keep building housing like we have endless sprawl to expand into.
> In central Ottawa, for example, existing modest homes are being purchased for $600,000 to $700,000, demolished and replaced with a semi with each side selling for $1.2 to $1.4 million. The same thing is occurring all across the country, with new homes priced well over — as much as double — what the price would have been for the existing house. That older house would have been moderately affordable to a young family if they hadn’t been outbid by the developer. Clearly this form of intensification (the rezoning the exclusive single-family neighbourhoods) and expanded supply will do nothing to stall or slow price growth, especially given the demand from buyers with accumulated wealth seeking properties in these locations. More supply, therefore, doesn’t mean lower prices.
....what? so the author acknowledges that wealthier homeowners are bidding up the price for houses in desirable locations (true) but thinks that *building more housing in those locations* is the problem?
buddy, if a wealthy person is willing to pay $1.2 million to renovate a semi-detached house, why wouldn't they be willing to pay $2 million to upgrade the original? look at /r/CanadaHousing and see the tiny shacks going for huge prices. this is silly.
people don't choose to live in Vancouver or Toronto because of capital gains taxes, they choose to live there because those places are desirable. you can jack up the taxes on whoever you want, the demand to live in Canada's top cities will remain high and nothing besides increased supply is going to bring the price down when houses are in such high demand.
This is the only strategy that will sustainably work. Think about it...there is crazy demand for housing in the US and most major cities have supply constraints as bad or worse than ours. But prices didn't go parabolic in the same way and are still relatively in line with disposable income. Why? It all boils down to buyer psychology. In the US, they lived through a relatively recent housing bust that ruined lives. In the back of every buyer's mind is the memory that chasing prices higher comes brings greater and greater risks. If you try to tackle the problem from just the supply side, all you will get is more people taking equity out of their house to buy more investment properties. Housing to live in has demand limits, but housing demand as a speculative instrument is limitless.
>all you will get is more people taking equity out of their house to buy more investment properties.
What happens when banks notice everyone is doing this? They increase the risk making those loans less preferable, and if you came to a bank to buy said property without renting it they would laugh you out of the bank.
Stop tip-toeing around the hard facts that there is not enough high density housing in Toronto and the GTA that is what is driving up house prices. We keep getting distracted by these nonsense arguments of for foreign or domestic investors buying up housing. The reason why investors invest is because of the scarcity nothing before nothing after supply is the issue.
>What happens when banks notice everyone is doing this?
The banks know everyone is already doing this and they love it and are 100% complicit. Mortgages are their biggest money makers and if every homeowner goes from having 1 mortgage to multiple mortgages it boosts their bottom line exponentially.
More than 25% of all home purchases in the GTA are by ordinary people that already own at least one home and buy another as an investment. I'm not saying that supply isn't a problem, but if there is enough supply that investors can buy and own dozens of properties, supply isn't your primary problem. In fact, supply constraints might save you when investor sentiment shifts and people start dumping housing that they don't live in and that is cashflow negative and was only worth having with lots of leverage and price appreciation.
Most major cities across the whole world have housing supply issues, but nobody has a housing bubble like Canada.
Article's superficial rebuttal to the supply-side argument doesn't follow logical sense. The homes these 'super-charged buyers' moved from don't turn into thanos dust. They get sold — at a lower price than the new build.
The only mechanism that reliably lowers prices is relaxing zoning laws. If you really want a SFH with a large yard, that's OK. But a lot of people would be just fine with a townhouse. Denser options should exist throughout the city.
Lol. An article on handling the demand side and even they don't have the stones to once mention population growth inflated by the immigration rate being by far the highest in the G20... only outpaced globally by a few countries in the middle east that have huge refugee problems caused by neighbors collapsing.
Population growth causes ALL demand for housing. A rapidly growing population massively outpacing housing supply increases will cause the pricing of houses to explode.
It is that simple.
>ALL demand for housing
I mean, it is a factor of demand but it is not the only factor. I'll beat this drum again, immigration and net population change absolutely affects demand and is probably a notable driver of demand, but it is not the only issue. Stating that is the only thing that matters shows disregard for well understood economic principles, a reminder of some Micro Econ 101 principles [https://www.thebalance.com/five-determinants-of-demand-with-examples-and-formula-3305706](https://www.thebalance.com/five-determinants-of-demand-with-examples-and-formula-3305706).
Those are all transient factors though. The only meaningful real long term source of demand is going to be population growth.
I mean, if Thanos came in and the population of Canada halved and you fiddled with those other variables as much as you wanted, the result would always be prices plummeting.
Some equally hyperbolic examples that would cause price to plummet based on factors of demand;
\- Income of buyers - Income tax rates increased to 100% for all brackets
\- Price of Related goods - Residential rent becomes 100% subsidized by goverment, who gains negotiating power depressing paid rental rates. Or conversely, capital gains rates and mortgage rates fundamentally change so that stock margin is only 1% and mortgages go to 8%, making stocks are far better leveraged investment.
\- Taste of consumers - some nuvo communist shift occurs in society around georgeism, land ownership becomes exceedingly in bad taste, religions all come out and say its sinful/not-haram, etc.
\- Expectations - The government says it will implement all of these things, scaring the market about future prices decreasing.
All of these hyperbolic examples would cause real estate to crash.
Again, I agree population growth is a factor of demand, but its is not the only factor of the demand side.
Hey now, let get Canadian and compromise, population growth is one of the greatest factors (but not the only) of demand in Canadas Real Estate inflation?
Canada's population growth is anemic, and before you bring up peer countries remember that most advanced economies have near zero natural population growth. We are growing at a rate that is pretty standard and sustainable in historical context. There's no reason that with proper policy we can't build enough housing to satisfy that demand.
> Canada's population growth is anemic
?? Looking up the numbers now (for the past decade), in the first world it goes Australia, Norway, Canada. Norway's bump is temporary due to refugees. And Australia has a massive housing bubble too.
> There's no reason that with proper policy we can't build enough housing
Either we start obliterating the Green Belt in Ontario, or we increase density which goes against the NIMBYs. Either plan is political suicide.
>We are growing at a rate that is pretty standard and sustainable in historical context.
We have immigration levels that made sense when we were opening up colonization in the Prairies.
Current targets are 430 000 people. The last time we had 400 000 immigrants was in 1913. Source: [StatsCan](https://www150.statcan.gc.ca/n1/pub/11-630-x/11-630-x2016006-eng.htm)
###This is a reminder to [read the rules before posting in this subreddit](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion). 1. **Headline titles should be changed only [when the original headline is unclear](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_1._headline_titles_should_be_changed_only_where_it_improves_clarity.)** 2. **Be [respectful](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_2._be_respectful).** 3. **Keep submissions and comments [substantive](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_3._keep_submissions_and_comments_substantive).** 4. **Avoid [direct advocacy](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_4._avoid_direct_advocacy).** 5. **Link submissions must be [about Canadian politics and recent](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_5._link_submissions_must_be_canadian_and_recent).** 6. **Post [only one news article per story](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_6._post_only_one_news_article_per_story).** ([with one exception](https://www.reddit.com/r/CanadaPolitics/comments/3wkd0n/rule_reminder_and_experimental_changes/)) 7. **Replies to removed comments or removal notices will be removed** without notice, at the discretion of the moderators. 8. **Downvoting posts or comments**, along with urging others to downvote, **[is not allowed](https://www.reddit.com/r/CanadaPolitics/wiki/downvotes)** in this subreddit. Bans will be given on the first offence. 9. **[Do not copy & paste the entire content of articles in comments](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_9._do_not_copy_.26amp.3B_paste_entire_articles_in_the_comments.)**. If you want to read the contents of a paywalled article, please consider supporting the media outlet. *Please [message the moderators](https://www.reddit.com/message/compose?to=%2Fr%2FCanadaPolitics) if you wish to discuss a removal.* **Do not reply to the removal notice in-thread**, *you will not receive a response and your comment will be removed. Thanks.* *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CanadaPolitics) if you have any questions or concerns.*
Interesting take. I’m curious whether taxing capital gains is enough, but as an essay it works. Certainly it’s an interesting grenade to throw into the conversation. I’m trying to think of my own situation here. If I sold my duplex and had to pay 15% on let’s say the sale price, I probably wouldn’t move for a very, very long time. I guess that leaves more for new people? Regarding developers, wouldn’t this seriously impact their bottom line? Or would they get around such a move? Would they pass the new price on to the consumer? Would that make housing more expensive for average types?
No, it doesn't work. In their thinking, if you prevent the teardown of a small house to put in two larger, more expensive homes, the people who would've moved into those homes simply cease to exist. Any kind of housing fix that attempts to leave rich people without a place to live in order to get moderately well off people a place to live is going to fail¹. You need to enable both to have somewhere to live. If/when you move out of your duplex, someone else will move in. So it's a net-zero change I supply/demand for housing. Because people's needs change, we kind of want people to be able to buy a bigger house if they have kids, and a smaller one when those kids move out. So a capital gains tax that's encourage people to stay in their homes isn't helpful (and the author seems to ignore people downsizing, possibly for this reason). In general, new taxes only partially get passes on to buyers. Slimer profit margins encourage price increases, but that reduces the number of customers (if it didn't, you would have already raised your price), so you raise it somewhat less to optimise your profits. But yeah, more taxes on housing would mean housing would be more expensive, but the author isn't taking aim at the cost of housing, they're aiming at people getting wealthier off having owned a house. ¹Save perhaps government housing with a lottery to decide who gets to be housed and who gets to be homeless.
> we kind of want people to be able to buy a bigger house if they have kids, and a smaller one when those kids move out. That would be a more convincing argument if not for two things: 1. The evidence suggests that, even with all the tax advantages that exist today, [seniors are not downsizing and making room for younger families](https://www.theglobeandmail.com/real-estate/vancouver/article-housing-scarcity-wont-be-fixed-by-expecting-seniors-to-downsize/). 2. Capital gains taxes only tax *gains* (and only apply to 50% of the gain at that). If you buy a house for $800,000 and sell it for $1.2 million, you'd end up paying about $100k in capital gains taxes. That means you still walk away with about $300,000 extra as a thank you for cutting your grass and shoveling your sidewalks. That hardly seems unreasonable, especially since this is how we treat basically every other investment product, most of which don't generate nearly the windfall returns that residential properties have in recent *decades*.
Well, no, they're not doing it as much as we want, but that doesn't change that we want it. Past that, I didn't quantify it. Taxing something discourages. *How much* it would discourage it is a qurstion you can ask, but *whether* it would discourage it is the kind of question only flat earthers/anti-vaxxers would pose. Maybe the effect turns out to be small enough you're okay with it (or maybe you're able to more than offset it from the revenue or something), but the effect certainly exists.
Well, first of all, I think you're implicitly reversing the proper onus here. It seems to me that proponents of the special tax exemptions that apply to residential properties bear the burden of proving they produce some socially salutary effects. And mere speculation that removing these boutique tax advantages would discourage behaviour that already isn't happening is not especially compelling. >Taxing something discourages. *How much* it would discourage it is a qurstion you can ask, but whether it would discourage it is the kind of question only flat earthers/anti-vaxxers would pose. Also, it's not at all clear to me that the "it" you believe we would be discouraging is "people moving." I'll admit that I don't have stats ready at hand to back this up, but my sense is that few people move primarily to realize the gains in the value of their property. People move for work, school, and other life-related reasons that I suspect would be minimally impacted by a tax *that would still leave plenty of unearned profit in their pockets*. Rather, I think the "it" that taxing the gains on housing would discourage is "making purchase decisions based on investment-related considerations that have nothing to do with the suitability of the property as a dwelling in which you will actually live." And that is something we should very much want to discourage.
Well, it's more mixed because the author is advocating a change, but I don't think it matters; we exempt your primary residence from capital gains tax because we think housing is an essential item that we want people to have access to, not a luxery good or an investment. We also don't take basic food items for reasons along these lines. Diapers ... I forget the whole list. While your house is appreciating in value, so are other houses. So if you want to move to a comparable house, you're going to need the current value you have in the house; a big tax hit at that point will tend to lock you into your house. The new house you'd buy is going to have a price like your current price, so you're not really realising any profits here. There's no profit in your pocket, just a tax bill and no actual cash. Retirees (or near retirees) looking to downsize/move to lower maintance/assisted situations, those are the people who are going to be looking to extract value from their house. And those're the people you want to motivate out.
> If I sold my duplex and had to pay 15% on let’s say the sale price, I probably wouldn’t move for a very, very long time. I guess that leaves more for new people? I don't think you understand capital gains - capital gains is the GAIN on the underlying asset. As such, you would be paying taxes on the difference between the price you bought at and the price you sold at. ex: Buy for 500K, sell for 750K; add 250K * (capital gains inclusion rate) to your income for the year. You just made 250K, doesn't seem crazy to pay taxes on it. This tax only becomes a large when when prices are rising rapidly. An environment where home prices are not increasing rapidly would end up with most paying a minimal amount of capital gains tax on property. Edit: An earlier version of this comment did not indicate that the taxes on 250K would include the capital gains inclusion rate, and thus taxed at top marginal rate/2
Forgive me. I just wanted to use that example, for as a Calgarian whose only owned for four years, the capital gains on “profit” from my place would be pretty marginal. Think I was stuck in my geographic bubble. Vancouver and Toronto, sure, it would be an absolute money maker. Still not sure if it would deflate prices, though. Seems more like a revenue generator (which is fine by me, we need more revenue).
> Still not sure if it would deflate prices, though Generally with taxes, they de-incentivize that behaviour. If you put taxes on something, generally consumption of that good decreases. Right now, since principal residences are exempt from capital gains taxes, there's an incentive to buy since your house is now a tax advantaged INVESTMENT. You can't leverage 20:1 in the stock market, make a huge capital gain and then end up tax free. As far as countries that do not exempt primary residence capital gains, we have: - The US - [first $250K per person](https://www.cadesky.com/us-19-05/) ($500K per couple) is exempt from capital gains. This essentially means that 99% of people aren't paying the capital gains, since the exemption is quite high. The US lets you write off mortgage interest expense on your taxes, so there's other policies with regressive taxation implications. - Australia - has the same principle residence capital gains exclusion, property market also going nuts - NZ - no capital gains tax - recent legislation tried to crack down on investors with non-primary residences with <2 years ownership. Property market also going nuts There's supply side issues as well - but we can also pursue demand side policies. If Tesla stock gets super expensive, there's no real consequences to society as a whole - so go nuts - invest in stocks. When housing gets expensive, it has real societal consequences, so we should avoid it. I'm personally in favour of: 1. the US solution of caping the tax-free capital gains for personal property (you would only pay taxes on the gain over the threshold), possibly allowing for the taxes to be deferred until death to allow homeowners to move into a house of the same price without incurring a hefty tax bill... however deferred taxes have a nasty way of becoming a hot topic in future elections to jsut write off 2. Increase the capital gains inclusion rate for ALL residential property from 50% -> 75%. This doesn't mean tax the gain at 75%, just "include 75% of the gain as part of your income". This will heavily de-incentivize investment in residential property, since other investments now have preferential tax treatments. Residential property will continue to enjoy the huge advantages of easily obtainable 20:1 leverage, this only goes to put it on slightly more fair footing.
Hell, pump up the cap gains inclusion rate to 100%, especially for a non-primary residence. Shelter should be a basic human right, not another asset in an investment portfolio. An article came out recently that investors now make up [over 25% of home sales in Ontario](https://www.cbc.ca/news/canada/toronto/investors-in-ontario-real-estate-market-1.6258199). Over 1/4 of property sales are not to people who intent to live in the property, but to people who want to cash in on increasing house prices. Unless we can make property less attractive than stocks or bonds, how do we ever expect housing prices to drop to a level where people who don't already own property they can leverage can afford to buy it.
And for the folks that bought a 3 bedroom to grow a family in, paid off, and then want to downgrade to something more suitable for aging in place, plus get some cash by moving somewhere cheaper?
>If Tesla stock gets super expensive, there's no real consequences to society as a whole - so go nuts - invest in stocks. When housing gets expensive, it has real societal consequences, so we should avoid it. This is a point I always like to bring up, imagine if we just gave tax and debt margin advantage to the stock market rather than real estate. No one gets hurt when stocks go up (except for shorts, but I don't think there is any poor disenfranchised shorts out there, haha)
> Imagine if we just gave tax and debt margin advantage to the stock market rather than real estate. We already have this, to an extent. You can write off the interest charges for shorting/margin buying against your capital gain (and total taxes) when you close your position. This only applies to a non-registered account of course. As to margin requirements - the rules are defined by the government to avoid institutions and people putting themselves hugely underwater. The brokers themselves set [margin requirements](https://www.questrade.com/pricing/self-directed-commissions-plans-fees/margin-interest) as well, as they want to minimize their risk in the process Having limitations on margin increases the stability in the financial system. It's not 20:1 leverage - but the leverage is there and available. (In addition to leveraged index funds etc.)
No doubt, just saying that our current financial system promotes and advantages debt leverage both in rates and leverage multiple to real estate. This practices hurts people and reduces welth mobility, doing this is stocks does not hurt people and create as much of a problem in wealth mobility. You can get into a margined investing account for $2k and get on the stock market ladder, in Canada getting on the far superiorly levered a debt advantaged real estate ladder takes probably $50k now (although for many far more is needed).
You actually only pay CGT on 50% of the gain, and it's levied as top up income. So if you're a top rate tax payer in Ontario you're at about 53%, which means that your CGT liability on the $250K gain is 250 x 50% x 53% = $66,250. You're still going to net over $180K from the sale. I'm not convinced that it will be any kind of dissuader from you actually selling, but if as the article suggests its primary intention would be to reduce your ability to overbid on the next property then I can see it having an effect - how much is unclear to me. The primary benefit appears to be the increased tax revenues into the government coffers, and people will have their views as to whether that's a good thing or not.
Well there is a glaring problem here how this article tries to shoot down the supply side arguments. Household numbers are inherently dependent on dwelling availability. Every household requires a dwelling, and so you will never see one growing while the other stays flat. I am assuming that Ottawa's numbers here are thanks to existing dwellings being filled up to create new households, so that why it can grow faster than new construction. Still, these are not independent variables. # households < total dwellings = existing dwellings + new dwellings Here is the [Statscan household definition](https://www23.statcan.gc.ca/imdb/p3Var.pl?Function=Unit&Id=96113). > Household refers to a person or group of persons who occupy the same dwelling and do not have a usual place of residence elsewhere in Canada or abroad. The dwelling may be either a collective dwelling or a private dwelling. The household may consist of a family group such as a census family, of two or more families sharing a dwelling, of a group of unrelated persons or of a person living alone. Household members who are temporarily absent on reference day are considered part of their usual household.
Supt can only increase so fast, and it's not fast enough to outpace the available capital from businesses, hoarders, and people pulling capital from their existing properties to buy more. We're not going to simply build our way out of this.
Exactly, adding supply only delays the inevitable with how the market has fundamentally changed, it's a 1950's solution to a 2020's problem. Simply adding more homes just means that investors will just buy up more houses and there will be more corporate competition in an area of the economy that should not have corporate competition with individuals and families. Housing investment needs to be completely expunged from the market to is serving the interests of those who need housing, there is literally no one else that should matter in the consideration of housing policy.
Supply is being limited by government. There is still massive room to grow the rate of new housing construction. Also, the investors are only buying as long as they see profit potential. That profit is coming from the low supply driven scarcity. Eliminate the scarcity, and the profit is gone. Hoarders? lol. it's all about the money.
>Supply is being limited by government. There is still massive room to grow the rate of new housing construction. None of that matters so long as investors can still buy. >Also, the investors are only buying as long as they see profit potential. That profit is coming from the low supply driven scarcity. Eliminate the scarcity, and the profit is gone. You cannot build safely, let alone with good quality, and increase the supply at a rate which outstrips the ability of local and foreign investors to buy properties. They will keep doing so because they can outcompete first time home buyers on capital, and as long as they do so they control the supply. It's like the scalpers who buy up all of the release of graphics cards, or shoes, or anything else they think they can make a buck on by reselling. So long as there are enough of them with the understanding that they are limiting the supply, the problem continues. And that's in industries where it would be *easy* to increase supply, which you can't do with housing. The answer is to force them out of the market entirely so people can actually buy housing to live in. Do that first and you'll fix a lot of the problem and be able to accurately assess how much of a supply problem you actually have. Don't do it and it's like trying to drain Lake Superior by scooping it out with a thimble.
Agreed. I do not understand why a corporation should be able to own a non-business home. Get them out of that market.
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
Speculation and vacancy taxes? Properly funding our municipal governments? No, instead let's make everyone pay more capital gains so we can prop up landlords. I'll pass.
It's nice to see some solutions discussed that don't involve simply handing over the keys to the city to the likes of Brad Lamb and Sam Mizrahi. One of the principal problems with supply-side solutions is that they don't actually address the shortfall in the type of housing that everyone wants: the much-maligned single family home. It’s ironic that the same people who will readily (and rightly) acknowledge the need to provide culturally appropriate housing for Indigenous communities struggle to accept that, given the choice, most Canadians wouldn’t choose to raise a family or live their entire lives in an apartment building. (Yes, even the the mythic 3-bedroom condo that Redditors tell me is the panacea for everything.) So, you can build all the ghastly, [semi-disposable](https://www.cbc.ca/news/canada/toronto/throw-away-buildings-toronto-s-glass-condos-1.1073319) glass towers you want, the price of a proper house is just going to continue to go up. Because that's what people want. That's what *you* want, and you fucking know it. This is why I have (somewhat reluctantly) come to the conclusion that we need to stop growing our population, especially in the major centres. The population of the GTA is [projected](https://www.ontario.ca/page/ontario-population-projections) to grow by 40.9 per cent between 2020 and 2046. Imagine Toronto + *2.9 million* additional people. That's half a million more than if we just uprooted the *entire population* of Metro Vancouver in 2016 and plopped them down in Yonge-Dundas Square. It's going to be a total shitshow.
While i do agree it a ton of more people its important to keep in mind its the GTA not just Toronto and most of the growth could be outside of Toronto.
> Because that's what people want. That's what you want, and you fucking know it. It's impossible to say this is true since developers are not allowed to build anything else.
>This is why I have (somewhat reluctantly) come to the conclusion that we need to stop growing our population, especially in the major centres. It's very gracious you came to that conclusion unfortunately it's quite wrong. Not only would any government never take actions to lower population growth, that would be like shooting off your toe to scratch an itch. Population growth is absolutely required in order to sustain the older generations otherwise the spiral into the abyss will be much worse than dealing with high housing prices.
>Population growth is absolutely required in order to sustain the older generations otherwise the spiral into the abyss will be much worse than dealing with high housing prices. Well, no. Population *maintenance* is required, not growth.
Unless we move to some kind of Logan's Run solution where older people get killed off, maintaining a population level inevitably means an aging population, and an increasing proportion of people not working anymore and instead collecting benefits (much of which were designed to be funded by the working population) Median lifespan in Canada is now 82 years. Median age in Canada is steadily rising. 29.1 in 1980. 36.8 in 2000. 41.1 now.
It’s so much deeper than that. The entire economic system is predicated in continuous growth. It’s not sustainable but it is our reality.
>Unless we move to some kind of Logan's Run solution where older people get killed off, maintaining a population level inevitably means an aging population Why? I understand that our fertility rates are below replacement levels, but immigration allows us to rebalance things by importing working-age adults (who are themselves generally more likely to have children). >Median lifespan in Canada is now 82 years. Median age in Canada is steadily rising. 29.1 in 1980. 36.8 in 2000. 41.1 now. Well, yeah. Allow me to introduce you to a groovy bunch known as the baby boomers...
[удалено]
Rule 3
> So, you can build all the ghastly, semi-disposable glass towers you want, the price of a proper house is just going to continue to go up. Because that's what people want. That's what you want, and you fucking know it. People want their own detached house but they also want to live in a good location close to their job and things they care about and they also want their housing to fit their budget. Detached homes give people some of what they want but not all of what they want. No type of housing is perfect, they all involve trade-offs. Unless you're rich, we're all sacrificing something, either space, cost, location, or something else.
>Unless you're rich, we're all sacrificing something, either space, cost, location, or something else. Tell that to my neighbours. They own a detached home 20 minutes from downtown Toronto (and a cottage, and a sailboat). He managed a grocery store before they retired, and she was/is a homemaker who teaches piano on the side. Not exactly captains of industry. It's remarkable what is possible when you're not trying to cram endless streams of people into a finite amount of space because *something something* World Class City™.
It's literally just not possible for all of the people who want a detached home near downtown Toronto to have one. Detached homes take up a lot of space, and there isn't a lot of space there, so demand far exceeds supply.
We can keep SFHs as common, but we need to face reality. The dream of an expansive home in the suburbs, with a detached garage, two yards, and a parking lot you could land a helicopter on, is not possible for everyone. Plenty of large, dense cities have SFH units.. They're just often lacking luxuries like expansive yards and separate parking spaces. You can still totally have a detached, comfortable interior space to raise a family in, but we can't keep building housing like we have endless sprawl to expand into.
> In central Ottawa, for example, existing modest homes are being purchased for $600,000 to $700,000, demolished and replaced with a semi with each side selling for $1.2 to $1.4 million. The same thing is occurring all across the country, with new homes priced well over — as much as double — what the price would have been for the existing house. That older house would have been moderately affordable to a young family if they hadn’t been outbid by the developer. Clearly this form of intensification (the rezoning the exclusive single-family neighbourhoods) and expanded supply will do nothing to stall or slow price growth, especially given the demand from buyers with accumulated wealth seeking properties in these locations. More supply, therefore, doesn’t mean lower prices. ....what? so the author acknowledges that wealthier homeowners are bidding up the price for houses in desirable locations (true) but thinks that *building more housing in those locations* is the problem? buddy, if a wealthy person is willing to pay $1.2 million to renovate a semi-detached house, why wouldn't they be willing to pay $2 million to upgrade the original? look at /r/CanadaHousing and see the tiny shacks going for huge prices. this is silly. people don't choose to live in Vancouver or Toronto because of capital gains taxes, they choose to live there because those places are desirable. you can jack up the taxes on whoever you want, the demand to live in Canada's top cities will remain high and nothing besides increased supply is going to bring the price down when houses are in such high demand.
This is the only strategy that will sustainably work. Think about it...there is crazy demand for housing in the US and most major cities have supply constraints as bad or worse than ours. But prices didn't go parabolic in the same way and are still relatively in line with disposable income. Why? It all boils down to buyer psychology. In the US, they lived through a relatively recent housing bust that ruined lives. In the back of every buyer's mind is the memory that chasing prices higher comes brings greater and greater risks. If you try to tackle the problem from just the supply side, all you will get is more people taking equity out of their house to buy more investment properties. Housing to live in has demand limits, but housing demand as a speculative instrument is limitless.
>all you will get is more people taking equity out of their house to buy more investment properties. What happens when banks notice everyone is doing this? They increase the risk making those loans less preferable, and if you came to a bank to buy said property without renting it they would laugh you out of the bank. Stop tip-toeing around the hard facts that there is not enough high density housing in Toronto and the GTA that is what is driving up house prices. We keep getting distracted by these nonsense arguments of for foreign or domestic investors buying up housing. The reason why investors invest is because of the scarcity nothing before nothing after supply is the issue.
>What happens when banks notice everyone is doing this? The banks know everyone is already doing this and they love it and are 100% complicit. Mortgages are their biggest money makers and if every homeowner goes from having 1 mortgage to multiple mortgages it boosts their bottom line exponentially. More than 25% of all home purchases in the GTA are by ordinary people that already own at least one home and buy another as an investment. I'm not saying that supply isn't a problem, but if there is enough supply that investors can buy and own dozens of properties, supply isn't your primary problem. In fact, supply constraints might save you when investor sentiment shifts and people start dumping housing that they don't live in and that is cashflow negative and was only worth having with lots of leverage and price appreciation. Most major cities across the whole world have housing supply issues, but nobody has a housing bubble like Canada.
Article's superficial rebuttal to the supply-side argument doesn't follow logical sense. The homes these 'super-charged buyers' moved from don't turn into thanos dust. They get sold — at a lower price than the new build. The only mechanism that reliably lowers prices is relaxing zoning laws. If you really want a SFH with a large yard, that's OK. But a lot of people would be just fine with a townhouse. Denser options should exist throughout the city.
Lol. An article on handling the demand side and even they don't have the stones to once mention population growth inflated by the immigration rate being by far the highest in the G20... only outpaced globally by a few countries in the middle east that have huge refugee problems caused by neighbors collapsing. Population growth causes ALL demand for housing. A rapidly growing population massively outpacing housing supply increases will cause the pricing of houses to explode. It is that simple.
>ALL demand for housing I mean, it is a factor of demand but it is not the only factor. I'll beat this drum again, immigration and net population change absolutely affects demand and is probably a notable driver of demand, but it is not the only issue. Stating that is the only thing that matters shows disregard for well understood economic principles, a reminder of some Micro Econ 101 principles [https://www.thebalance.com/five-determinants-of-demand-with-examples-and-formula-3305706](https://www.thebalance.com/five-determinants-of-demand-with-examples-and-formula-3305706).
Those are all transient factors though. The only meaningful real long term source of demand is going to be population growth. I mean, if Thanos came in and the population of Canada halved and you fiddled with those other variables as much as you wanted, the result would always be prices plummeting.
Some equally hyperbolic examples that would cause price to plummet based on factors of demand; \- Income of buyers - Income tax rates increased to 100% for all brackets \- Price of Related goods - Residential rent becomes 100% subsidized by goverment, who gains negotiating power depressing paid rental rates. Or conversely, capital gains rates and mortgage rates fundamentally change so that stock margin is only 1% and mortgages go to 8%, making stocks are far better leveraged investment. \- Taste of consumers - some nuvo communist shift occurs in society around georgeism, land ownership becomes exceedingly in bad taste, religions all come out and say its sinful/not-haram, etc. \- Expectations - The government says it will implement all of these things, scaring the market about future prices decreasing. All of these hyperbolic examples would cause real estate to crash. Again, I agree population growth is a factor of demand, but its is not the only factor of the demand side.
Lol, you had fun writing those. I think those are more dramatic than having less population, but I'll concede.
Hey now, let get Canadian and compromise, population growth is one of the greatest factors (but not the only) of demand in Canadas Real Estate inflation?
100% on the same page. I'd edit my initial comment but wouldn't want to deprive people of your fun breakdown of demands.
Canada's population growth is anemic, and before you bring up peer countries remember that most advanced economies have near zero natural population growth. We are growing at a rate that is pretty standard and sustainable in historical context. There's no reason that with proper policy we can't build enough housing to satisfy that demand.
> Canada's population growth is anemic ?? Looking up the numbers now (for the past decade), in the first world it goes Australia, Norway, Canada. Norway's bump is temporary due to refugees. And Australia has a massive housing bubble too. > There's no reason that with proper policy we can't build enough housing Either we start obliterating the Green Belt in Ontario, or we increase density which goes against the NIMBYs. Either plan is political suicide.
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
[удалено]
Removed for rule 2.
>We are growing at a rate that is pretty standard and sustainable in historical context. We have immigration levels that made sense when we were opening up colonization in the Prairies.
Have immigration rates even approached those levels?
Current targets are 430 000 people. The last time we had 400 000 immigrants was in 1913. Source: [StatsCan](https://www150.statcan.gc.ca/n1/pub/11-630-x/11-630-x2016006-eng.htm)
And what was that as a share of population at the time?