Comments on: Canada’s Real Estate Bubble Won’t Be Protected By Population Growth: BMO

By: David Tran

David Tran — Mon, 09 May 2022 18:16:49 +0000

In reply to Steve M. It's not economics it's finance. If people can only afford an $800k mortgage it doesn't matter how many people there are, they can only afford that much. People understand why low rates raise prices but the cognitive dissonance makes them incapable of understanding that higher rates do the opposite. It's an interesting phenomenon.

By: Scott

Scott — Mon, 09 May 2022 11:47:57 +0000

Why are all levels of Canadian government making policies and legislation that is designed to fail? Is it so, in 3 years they can say the opposition ruined their plans and therefore we should be re-elected? Or is it simply because pot has been legalized?

By: Lou

Lou — Sat, 07 May 2022 14:13:22 +0000

These values of new comers vs market are at best sub-related. This situation is uncertainties “trust” at the highest level how many historical data pull. The inference to 1990 data (1989)was a complete reserve reform, it doesnt not correlate previous recessions etc. Speculation is not a primary indicator the market dictate but yes the purchase power is important factor but people still will want to own as oppose to rent is as high. Forget all the historical data in the current conditions. The long-term supply issues and even if there was enough it’s pricing can’t go lower. It is my opinion that the new subventions HBP RRSP for for new home owner access will only contribute to phase out “some” of the hikes by then. it still is not enough. The inflation will definitely add to the price.

By: questions guy

questions guy — Sat, 07 May 2022 04:52:02 +0000

rates trump all

By: Steve M

Steve M — Fri, 06 May 2022 17:37:51 +0000

I’m not an economist in any way, but can someone explain in simple terms how a population boom could ever help with lowering home prices? I think economists have too many spreadsheets and numbers in their head, and have lost touch with reality. Maybe I’m missing something, but as more people enter the (country) housing or rental market, they reduce supply, and often raise the base cost for the general population, because eventually someone new to the country will pay said exorbitant rental cost and move the monthly cost benchmark ever higher, continually pricing many people out of the market?

By: Joel Lindsay

Joel Lindsay — Thu, 05 May 2022 22:43:49 +0000

Great stuff, but can you post the source link?

By: Bruno

Bruno — Thu, 05 May 2022 18:01:10 +0000

Forget immigrants now. If you’re a long time immigrant, talk to your friends back at home. I thought I left behind a crumbling country and really it was just a missed opportunity to see mobility rise with the development.

Because little opportunity exists, its hard to see the Fed let their golden goose go without a fight though.

By: GTA Landlord

GTA Landlord — Thu, 05 May 2022 17:56:25 +0000

It’s the same narratives every bubble. Foreign buyers, speculation, low interest rates (relative to the historic normals), population growth, etc..

The fact is a bubble happens when there’s nothing else going on so the excess money drives non-productive growth. No one in their right mind would start a business in Canada that’s capital intensive at this moment without a sweetheart deal from the region subsidizing taxes or rents, like the big tech companies get.

By: David Chan

David Chan — Thu, 05 May 2022 17:46:18 +0000

In reply to Busrider.

That’s why the growth trend is normalized to a multi-year trend to reduce volatility distortion.

It’s clear the VALUE of money is the issue. it doesn’t matter how much things cost, it matters what money can buy. The government inflated home prices and now multi-millionaires like in homes that used to cost $200k and they’re too clueless to realize that’s the same position on the social ladder they always were.

By: Busrider

Busrider — Thu, 05 May 2022 17:23:15 +0000

Not sure I’d dismiss this as much as Porter seems to do. House prices can change faster than population growth levels. What we might be observing when we see house prices changing before population growth levels is the market pricing in expectations of the population growth.