The Prime Minister announced a new government agency to oversee billions in financial incentives for developers, a plan he spoke about during his election-campaign appearance on Village Media’s podcast
How many houses would you need to build in order to have prices drop by 20%?
According to the CMCH, double the housing starts. Which is what the government is aiming to do.
Current housing prices aren’t reflective of their availability, they’re mostly reflective of their value as investments (including for single home owners). Until that part is removed from their pricing, they will never become affordable again.
This would always have been true, housing didn’t suddenly become investments in 2020.
And yet, houses were at 2019 prices in 2019, regardless of their ability to act as investments. And that happened without any of the radical proposals outlined. Why would these proposals not have been necessary in 2019 to hit 2019 prices but suddenly are required regardless of how much we build?
According to the CMCH, double the housing starts. Which is what the government is aiming to do.
Except the CMHC said you would need to double the housing starts between when they released that report and 2035 for that to happen. The report came out last year.
Did we double housing starts in 2025? Nope.
Will we double it in 2026? Also no.
In fact, how long would it take to even train 100% more workers than already exist in that industry?
https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020016-eng.htm
Here’s the statscan data on new registrations for apprentices… I looked at plumbers and electricians specifically, but If you google around for total numbers of people working in those fields. It appears that even with the latest huge post-covid push of new apprentices it will take… 10 years to double the number of workers, and that assumes not a single existing one retires in that period.
So the reality of the situation is that we CANNOT build twice as many houses each year between now and 2035 to return the pricing level to 2019 affordability ratios. We realistically can’t even come close to doing such a thing.
This would always have been true, housing didn’t suddenly become investments in 2020.
And yet, houses were at 2019 prices in 2019, regardless of their ability to act as investments. And that happened without any of the radical proposals outlined. Why would these proposals not have been necessary in 2019 to hit 2019 prices but suddenly are required regardless of how much we build?
I don’t know how young you are, but housing has been getting more unaffordable for my entire life, it wasn’t affordable in 2019 either and it wasn’t unaffordable because we didn’t build enough houses. There are far more bedrooms in Canada than people (I did the math a while back), and that doesn’t even account for the fact that lots of couples and kids share a room. There’s more than enough housing for everyone, the problem is the distribution of housing. Home owners making money just living in their home, completely unearned. That is money that has to come from somewhere, and it’s always been coming from the next generation of buyers. It’s the largest pyramid investment scheme in history.
That’s one of the reasons I like the land value tax idea I mentioned above, if you use more land than you should for a given area desirability, you have to pay a larger amount of tax. This will cause a massive amount of downsizing for empty nesters, freeing up those larger homes for people who currently have children or even just for re-development into condos in urban areas.
The re-distribution of the tax to offset income taxes/or a basic income make it more affordable for current workers and families to afford those bigger units because they’re still working and will collect more money from having more family members.
Except the CMHC said you would need to double the housing starts between when they released that report and 2035 for that to happen. The report came out last year.
Did we double housing starts in 2025? Nope. Will we double it in 2026? Also no.
They released an updated version this year, here’s the CBC write up on it. Essentially, 4.8 million homes are needed by 2035 to get housing costs back to 2019.
I assume Carney can do basic math. If you watch the interview in the post, he notes that we’re only going to have a small number initially as we start scaling up new processes, companies and the like.
10 years to double the number of workers, and that assumes not a single existing one retires in that period.
Sure but again, part of the push is to move into new ways that require fewer workers etc. That’s the push with modular/prefabs.
it wasn’t affordable in 2019 either
Like I said, totally fair. For me, 2019 levels are workable. I know that’s a very lucky position etc.
That being said, all the factors and processes that get the country to 4.8 million by 2035 don’t suddenly stop. Coupled with population decline or maybe staying roughly steady, that means prices should continue to fall slightly.
I assume Carney can do basic math. If you watch the interview in the post, he notes that we’re only going to have a small number initially as we start scaling up new processes, companies and the like.
Carney can do basic math, but the reality is that he is lying to people. He doesn’t actually want house prices to go down. Voters would actually be quite unhappy with a 20% drop in prices that occurs too quickly and doesn’t have an external event to blame. The Conservatives would eat his breakfast in the next election if he dropped the value of homes by 10% before then. That’s the retirement savings for a lot of voters, they have far more money in their homes than they do in stocks and retirement portfolios.
Which is why every government is just picking some key items to say “look at what we’re doing, but it’s going to take time” knowing that they will get voted out before that lie starts to become apparent. The liberals launched a “National Housing Strategy in 2015”… it’s 10 years later and things are just significantly worse. Harper wasn’t any better before that, here’s their strategy from the 2006 election. https://www.poltext.org/sites/poltext.org/files/plateformesV2/Canada/CAN_PL_2006_PC_en.pdf where they acknowledged the problem, and agreed to do… almost nothing. The only reason that Harper didn’t have a massive explosion of the housing prices during his term was because the global financial crash nuked the real estate market right in the middle of his time in office, and they still managed to go up 15% in total.
Coupled with population decline
This one is a bit of a strange egg since it will happen completely unevenly when it occurs. Go look at housing prices in Japan over the last 10 years. Most rural houses are effectively worthless and practically ghost towns, while places like Tokyo are still up in prices despite completely flat population growth. Not particularly helpful for most people.
Housing productivity hasn’t improved at all over the last 50 years, in fact it’s gone down
Yeah, that’s why it takes something bold like putting together a new agency tasked with fostering innovative new companies. Those are the folks currently contracted to build the 4,000 affordable homes in the first wave.
Voters would actually be quite unhappy with a 20% drop in prices that occurs too quickly and doesn’t have an external event to blame.
Remember, the time scale is 2035, which should have two elections beforehand.
A chunk of voters would be happy, another would be unhappy.
The Conservatives would eat his breakfast in the next election if he dropped the value of homes by 10% before then.
That’s a fight almost any politician would love to have. “We’re here making things affordable for the middle class and our children and you’re complaining that they can finally buy homes?”
the liberals launched a “National Housing Strategy in 2015”… it’s 10 years later and things are just significantly worse.
I don’t find this argument particularly persuasive. Many governments have tried many things, that doesn’t mean nothing can work. This is a significantly larger. more concerted push at the problem than anything that came before. (And y’know, presumably won’t get interrupted by a pandemic.)
Most rural houses are effectively worthless and practically ghost towns
This happens everywhere, not unique to Japan or even demographic decline.
Excellent, so here’s what we’ll do. Ping me in 2035 and we’ll see if I’ve made a whole bunch more money or if my property has gone down in value.
I know I’m right here, which is hard for me, I don’t want to be correct. I would rather my children to be able to afford homes.
Unfortunately, people like you keep getting their hopes up on policies that have no historical record of working. Building more homes has never dropped prices anywhere in the world. Prices have always dropped because of other factors, and specifically those factors related to investment (like interest rates going up, the defaults from sub-prime mortgages, or the stagnation of the entire economy like in Japan)
According to the CMCH, double the housing starts. Which is what the government is aiming to do.
This would always have been true, housing didn’t suddenly become investments in 2020.
And yet, houses were at 2019 prices in 2019, regardless of their ability to act as investments. And that happened without any of the radical proposals outlined. Why would these proposals not have been necessary in 2019 to hit 2019 prices but suddenly are required regardless of how much we build?
Except the CMHC said you would need to double the housing starts between when they released that report and 2035 for that to happen. The report came out last year.
Did we double housing starts in 2025? Nope. Will we double it in 2026? Also no.
In fact, how long would it take to even train 100% more workers than already exist in that industry?
https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020016-eng.htm Here’s the statscan data on new registrations for apprentices… I looked at plumbers and electricians specifically, but If you google around for total numbers of people working in those fields. It appears that even with the latest huge post-covid push of new apprentices it will take… 10 years to double the number of workers, and that assumes not a single existing one retires in that period.
So the reality of the situation is that we CANNOT build twice as many houses each year between now and 2035 to return the pricing level to 2019 affordability ratios. We realistically can’t even come close to doing such a thing.
I don’t know how young you are, but housing has been getting more unaffordable for my entire life, it wasn’t affordable in 2019 either and it wasn’t unaffordable because we didn’t build enough houses. There are far more bedrooms in Canada than people (I did the math a while back), and that doesn’t even account for the fact that lots of couples and kids share a room. There’s more than enough housing for everyone, the problem is the distribution of housing. Home owners making money just living in their home, completely unearned. That is money that has to come from somewhere, and it’s always been coming from the next generation of buyers. It’s the largest pyramid investment scheme in history.
That’s one of the reasons I like the land value tax idea I mentioned above, if you use more land than you should for a given area desirability, you have to pay a larger amount of tax. This will cause a massive amount of downsizing for empty nesters, freeing up those larger homes for people who currently have children or even just for re-development into condos in urban areas. The re-distribution of the tax to offset income taxes/or a basic income make it more affordable for current workers and families to afford those bigger units because they’re still working and will collect more money from having more family members.
They released an updated version this year, here’s the CBC write up on it. Essentially, 4.8 million homes are needed by 2035 to get housing costs back to 2019.
I assume Carney can do basic math. If you watch the interview in the post, he notes that we’re only going to have a small number initially as we start scaling up new processes, companies and the like.
Sure but again, part of the push is to move into new ways that require fewer workers etc. That’s the push with modular/prefabs.
Like I said, totally fair. For me, 2019 levels are workable. I know that’s a very lucky position etc.
That being said, all the factors and processes that get the country to 4.8 million by 2035 don’t suddenly stop. Coupled with population decline or maybe staying roughly steady, that means prices should continue to fall slightly.
Housing productivity hasn’t improved at all over the last 50 years, in fact it’s gone down. https://bfi.uchicago.edu/insight/research-summary/the-strange-and-awful-path-of-productivity-in-the-us-construction-sector/
Carney can do basic math, but the reality is that he is lying to people. He doesn’t actually want house prices to go down. Voters would actually be quite unhappy with a 20% drop in prices that occurs too quickly and doesn’t have an external event to blame. The Conservatives would eat his breakfast in the next election if he dropped the value of homes by 10% before then. That’s the retirement savings for a lot of voters, they have far more money in their homes than they do in stocks and retirement portfolios.
Which is why every government is just picking some key items to say “look at what we’re doing, but it’s going to take time” knowing that they will get voted out before that lie starts to become apparent. The liberals launched a “National Housing Strategy in 2015”… it’s 10 years later and things are just significantly worse. Harper wasn’t any better before that, here’s their strategy from the 2006 election. https://www.poltext.org/sites/poltext.org/files/plateformesV2/Canada/CAN_PL_2006_PC_en.pdf where they acknowledged the problem, and agreed to do… almost nothing. The only reason that Harper didn’t have a massive explosion of the housing prices during his term was because the global financial crash nuked the real estate market right in the middle of his time in office, and they still managed to go up 15% in total.
This one is a bit of a strange egg since it will happen completely unevenly when it occurs. Go look at housing prices in Japan over the last 10 years. Most rural houses are effectively worthless and practically ghost towns, while places like Tokyo are still up in prices despite completely flat population growth. Not particularly helpful for most people.
Yeah, that’s why it takes something bold like putting together a new agency tasked with fostering innovative new companies. Those are the folks currently contracted to build the 4,000 affordable homes in the first wave.
Remember, the time scale is 2035, which should have two elections beforehand.
A chunk of voters would be happy, another would be unhappy.
That’s a fight almost any politician would love to have. “We’re here making things affordable for the middle class and our children and you’re complaining that they can finally buy homes?”
I don’t find this argument particularly persuasive. Many governments have tried many things, that doesn’t mean nothing can work. This is a significantly larger. more concerted push at the problem than anything that came before. (And y’know, presumably won’t get interrupted by a pandemic.)
This happens everywhere, not unique to Japan or even demographic decline.
Do you own a home?
Nope. Why do you ask?
Excellent, so here’s what we’ll do. Ping me in 2035 and we’ll see if I’ve made a whole bunch more money or if my property has gone down in value.
I know I’m right here, which is hard for me, I don’t want to be correct. I would rather my children to be able to afford homes.
Unfortunately, people like you keep getting their hopes up on policies that have no historical record of working. Building more homes has never dropped prices anywhere in the world. Prices have always dropped because of other factors, and specifically those factors related to investment (like interest rates going up, the defaults from sub-prime mortgages, or the stagnation of the entire economy like in Japan)