Trudeau says housing needs to retain its value
Trudeau says housing needs to retain its value
Many residents have been priced out of Canada’s housing market, but for a large number of Canadians, their house is a vital asset for retirement and passing on wealth
In case anyone still wants to somehow debate whether the Liberals will deliver affordable housing.
“Housing needs to retain its value,” Mr. Trudeau told The Globe and Mail’s City Space podcast. “It’s a huge part of people’s potential for retirement and future nest egg.”
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Here's my case for keeping housing prices high: the rich are largely insulated from fluctuations of the market. If housing prices drop then what's left of the middle class will be destroyed. Then the rich will come in to pick its corpse. Property will be concentrated even more in the hands of the rich and given 20 years we'll be in a worse position than before. I think what we need is to slowly increase housing supply while financially weakening the owner class. Eventually, housing prices will come down but the rich won't be able to buy all of it. But shocking the system in the short term will prevent any average Canadian from owning property ever again. We'll have to weather the storm for a while but things will get better. But I'm not a rocket economist, so feel free to refute this.
It would be dependent on why the drop occurs.
If it's because Canada become unfriendly to holding housing as a investment then I don't see how your scenario would be applicable. Specifically any scenario where Canada actually wants to keep housing affordable would mean people look elsewhere for investments.
I hear ya, but there's no side-stepping the fact that families who took out mortgages at the peak prices and peak rates and won't be able to sell to cover their cost and sinking deeper in debt. In other words affordability after years of neglect becomes challenging. If all the mortgages are erased or re-adjusted to new market state then maybe... however what to do with families that paid 80% mortgage and their house price dips 50%. They paid real money to the real bank who gets to keep the money while family's deficit from all those extra payments amounts to nothing, esp. if they were targeting it as retirement fund. Thus far I saw no proposals that don't destroy portion of non-rich population. 🙁 Whoever comes up with solution will deserve Nobel prize.
Thus far I saw no proposals that don’t destroy portion of non-rich population.
I haven't seen any specific data for it but I would believe there a lot more people who don't own homes then those who are newer owners with limited equity. Out of the long and rather ambiguous list of items the Liberals introduced in the budget for housing the 20 million for StatCan to collect more housing data was probably the highlight for me.
The government let this bubble get so big, they should have to implement a system to determine if familes were forced to over leverage themselves just to own a home and offer a reasonable amount of relief to those families as that home becomes a more reasonable value.