Real estate to get even more expensive
Was the real estate bubble a good thing? Journalists who take the part of the real estate business tend to write as if it was, for example this Journal piece reassuring us that prices will be even higher by 2022. Why is this good news?
This is a serious question. Is it good for an economy to have the cost of ownership out of reach for many people, forcing rentals also out of reach?
Updated to add: Even though that last piece talks about a slowdown from the pandemic, this piece in Metro says ten thousand new rental units are expected to become available this year, despite which the housing crisis is expected to continue. There’s various discussions in the item about why this is so, one being that the new units will mostly be tiny and thus unsuitable for families. Not quite mentioned is that brand new units are also likely to be expensive for their size and thus, of course, out of many folks’ reach.
Douglas 11:14 on 2020-06-24 Permalink
The higher the values, and the more volume of sales done, the more the city collects in taxes. The city does a lot of good with all those tax revenues. The last real estate boom allowed to city to fund all those construction projects to fix all the infrastructure that was not fixed for decades.
The negative is that rental prices and home ownership prices makes things unaffordable for many people.
Pros and cons.
Maxim Baru 12:39 on 2020-06-24 Permalink
The rub with that viewpoint is that the profits / wealth generated from this market far exceeds the funds generated for taxes. monies which are then mobilized towards distorting our formal political systems to favour the few over the many.. meaning that the gov doesn’t do the things we want it to do even if they have more more money to do it with…
GC 13:17 on 2020-06-24 Permalink
I guess it’s great if you’re prospecting or flipping properties, but otherwise… My place has probably gone up a fair chunk, but it’s my home. That appreciation isn’t actual money I can spend. And if I were to sell, then buying a place in the same area would cost me an arm and a leg. It’s only a personal benefit if I want to move to an area with cheaper property prices at some point.
Chris 13:18 on 2020-06-24 Permalink
>…mostly be tiny and thus unsuitable for families
“families” are the minority these days, single person households are the most common type, so makes sense that most units would be “tiny”, no?
Kate 18:31 on 2020-06-24 Permalink
Chris, you didn’t grasp one of the important points made in that piece: most of the single people were hoping not to be single for long, so there will be an ongoing need for larger apartments. In any case, a single person can live alone in a 6½ (if they can afford it) but a family of six cannot live for long in a 1½.
Tim 13:15 on 2020-06-25 Permalink
I took the time to read through your link Chris and the Stats Can press release (https://www150.statcan.gc.ca/n1/pub/75-006-x/2019001/article/00003-eng.htm). So there are around 4 million people living alone in Canada representing 14% of the population. So how are the other 86% of the population categorized? It is very unclear.
Additionally, because it talks about households, does that mean that if a household has 4 people, it’s only counted once?
I would like to know the percentage of the population above the age of 15 that live in a household of more than one person. My belief is that this would dwarf the 14% statistic of people in single person households.