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PostPosted: Thu Apr 20, 2017 4:05 pm
 


We don't have the same problem with poverty and blight that you have in the states.

Most flipping here in the GTA is with homes that are already middle class and the buyer does little or no work on the house, they just let the ever-inflating price bubble do all the work.

It's now common to see average houses going in a matter of days, for a hundred grand over asking with no conditions. Even with obvious deficiencies the realtors say don't bother fixing, just sell as is.


BTW, I'm all for neighhood improvement but the problem with gentrification is that it just displaces the poor people in the area to "blight" another part of the city. And Gentrification doesn't improve their neighbourhood for the poor people already there - the people who can least afford disruption in their lives end up forced from their homes, and away from their jobs. That's what gentrification refers to.


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PostPosted: Fri Apr 21, 2017 8:44 am
 


BartSimpson wrote:

Toronto's government policy is purposefully limiting housing by preventing high rise buildings from being erected with a zoning code that favors small housing structures and that eschews the kind of high density housing that makes sense in an urban core.

Thus creating a government-induced spike in competition for a limited supply of housing.



That isn't the case at all. Not even close.

While many are looking to point fingers at everyone from the City of Toronto, Ontario Liberals, etc, the problem is simple; Supply and demand.

Had you been to Toronto anytime over the last 20 years, you'll see that the policy above hasn't prevented hundreds of massive skyscrapers already built along with many more being built in the GTA as we speak.

This isn't just a City of Toronto issue, it's affected housing prices well beyond the borders of Toronto.

Despite all the massive growth all around the City, supply for family homes is limited and those that are for sale are going for a premium....and there's nothing wrong with that.


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PostPosted: Fri Apr 21, 2017 9:05 am
 


The problem is the demand is being driven by speculative investors, looking to buy houses simply to resell them at higher prices, not by families looking for homes. The speculation needs to be reigned in.

Families first. Investors a distant second.


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PostPosted: Fri Apr 21, 2017 9:27 am
 


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Last edited by Lemmy on Wed May 03, 2017 7:01 am, edited 1 time in total.

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PostPosted: Fri Apr 21, 2017 9:43 am
 


BeaverFever wrote:
Families first. Investors a distant second.


That's a great soundbite but it's a shit policy. It's done wonders for the Venezuelan people.


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PostPosted: Fri Apr 21, 2017 9:57 am
 


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Last edited by Lemmy on Wed May 03, 2017 7:00 am, edited 1 time in total.

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PostPosted: Fri Apr 21, 2017 10:19 am
 


Coach85 wrote:
Despite all the massive growth all around the City, supply for family homes is limited and those that are for sale are going for a premium....and there's nothing wrong with that.


Yeah, there is.

It's creating generations of debt slaves that are simply not able to change
their life conditions without the huge albatross of debt hanging around their necks.

Governments like this, it keeps people meek, desperate for money, and only thinking
about the damn mortgage.

Throw in some keeping up with the Jones', and the generations that can buy are
just fucked with eternal debt.

It also is creating generations of kids who will NEVER be able to get out
and grow up properly.

Everyone thinks the government is throwing them a few bones instead of the
'evil' business type investors, but it is nothing but a short term game
versus actually solving the problem.

The solution is to either create enough housing stock, reasonably sized,
so that the younger ones can buy a house and get going,
or to restrict property purchase to citizens only.

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PostPosted: Fri Apr 21, 2017 11:59 am
 


BeaverFever wrote:
The problem is the demand is being driven by speculative investors, looking to buy houses simply to resell them at higher prices, not by families looking for homes. The speculation needs to be reigned in.

Families first. Investors a distant second.


If your theory was correct, and it's not, you're forgetting about capital gains tax.

martin14 wrote:
Yeah, there is.

It's creating generations of debt slaves that are simply not able to change
their life conditions without the huge albatross of debt hanging around their necks.

Governments like this, it keeps people meek, desperate for money, and only thinking
about the damn mortgage.

Throw in some keeping up with the Jones', and the generations that can buy are
just fucked with eternal debt.

It also is creating generations of kids who will NEVER be able to get out
and grow up properly.


My parents had a mortgage with an 18% interest rate. My uncle when he got his first home, was around 20%. My parents scrounged enough to keep their home with my dad working full-time and my mom working two jobs.

It's not a right to be able to afford a family home in a major city. As many have done in the Toronto area, move to afford a cheaper home and commute. It's the only way you can make it work.


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PostPosted: Fri Apr 21, 2017 12:25 pm
 


There is no government cure for a problem that stems from the end-user.


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PostPosted: Fri Apr 21, 2017 12:42 pm
 


Lemmy wrote:
No, it isn't. Because that isn't a problem. Demand for housing and the profit motive aren't problems. Furthermore, those are two things that are incredibly difficult to alter with government policy. Demand is what it is. End of story. If there's demand, prices will rise. If they don't, it was undervalued.

The problem is 4 fold: 1. Supply. There just aren't enough units available. 2. The government WANTS short supply and high prices. They count on the revenues from property tax. They restrict development, in part, for that purpose. They also want lots of sales to cash in on the land transfer tax. Which leads directly to problem 3. MPAC. The Frankenstein monster created solely to grab homeowners by the ankles and shake in perpetuity. Province-wide inflation in housing prices, created on purpose, and on an on-going basis each year. 4. The Real Estate industry. Commissions add 5% to any house price (which, btw, goes on the assessment so you pay property tax on the commission you paid!) but the real evil is in the incomplete information that the system creates. Buyers and sellers grope in the dark to find the market price while the real estate firms collude, collude and collude with one another to inflate prices. KABOOOM! Have all sales by auction, like they do in Australia.

If you want families first, investors need to be in on that...big time. Because it's a supply problem and a regulatory problem. We need investment because we need construction. And the gov't needs to get some better advice on policy if their goal is truly to reign in pricing. My professional opinion is that they can't afford to do anything other than lip service because this market is lining their coffers at a time when they desperately need revenues.


Sorry. you have to differentiate between demand for housing and demand for investment returns. A family in need of a roof over their heads and a hedge fund that already owns a dozen investment properties in the city as part of it real estate portfolio are not the same, and we should not be indifferent to whose interests are being served here. These are not two indistinguishable sources of demand and its not fair to lump them all in together. Unlike the family, the investor is not really looking for housing, they're looking for returns on investment and the moment that stocks or bonds or whatever else is a more attractive investment, that's where most of them will go instead.

When a run-down semi-detached with a leaky basement in a rough part of town sells for $1million as is, and with no financing conditions, its not because some highly affluent family wants to try slumming it for a while. It's because the buyer wants to rent the house out to the families who can no longer afford to buy and then they expect to be able to sell the house just a few years later for several times what they paid for it.

Investment in new construction, both homes and purpose-built rentals are important and not what I'm talking about here. Im talking strictly about use of existing housing stock.


If the housing bubble was just about shrinking supply and growing demand, one would think the price increases would be steady, instead of a massive spike. Also we've seen that Toronto house prices hold steady even when demand drops. The prices "defy gravity" as they say.


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PostPosted: Fri Apr 21, 2017 5:41 pm
 


BeaverFever wrote:

When a run-down semi-detached with a leaky basement in a rough part of town sells for $1million as is, and with no financing conditions, its not because some highly affluent family wants to try slumming it for a while. It's because the buyer wants to rent the house out to the families who can no longer afford to buy and then they expect to be able to sell the house just a few years later for several times what they paid for it.


What happens to that house after it's purchased? It's renovated and updated to be able to offer the property as a rental unit. It may even be converted into a house with a legal basement apartment. A home that's a better option for a family than renting an apartment.

A home that was run-down is now updated, occupied and has brought business to the local economy through the contractors, agents, lawyers, etc.

You and others with your line of thinking think all of the benefits lie with the investor which is far from the case.

End of the day, speculation, and foreign investment aren't the problem in the real estate market in the GTA. In fact, the Ontario Government admitted they have no idea what the problem is, but added this 15% foreign buyer tax (just to say they "took action").

Especially as it pertains to the downtown core, the city is now bursting with 3 million people with a limited supply of established family homes and only new condo's being built.


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PostPosted: Fri Apr 21, 2017 6:03 pm
 


Coach85 wrote:

What happens to that house after it's purchased? It's renovated and updated to be able to offer the property as a rental unit. It may even be converted into a house with a legal basement apartment.
Maybe. Maybe not.

Quote:
A home that's a better option for a family than renting an apartment.
. Not better than the house they can no longer afford


Quote:
End of the day, speculation, and foreign investment aren't the problem in the real estate market in the GTA.
It is A problem.

Quote:
In fact, the Ontario Government admitted they have no idea what the problem is, but added this 15% foreign buyer tax (just to say they "took action").
. They said it is a part of the problem and there is no one single magic solution. IMO, 15% is too low and focusing on foreign buyers only misses out on domestic speculators who are probably a bigger problem.

Quote:
Especially as it pertains to the downtown core, the city is now bursting with 3 million people with a limited supply of established family homes and only new condo's being built.


It doesn't just pertain to the downtown core, the bubble now goes all the way to St. Catharines and Bowmanville. If youve ever been to those places you'll know there's no way that is organic demand.

Middle class families are being priced out of the housing market entirely by wealthy interests, and that's bad. Full stop.


Last edited by BeaverFever on Fri Apr 21, 2017 11:12 pm, edited 1 time in total.

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PostPosted: Fri Apr 21, 2017 7:10 pm
 


It's not "full stop"

You're guessing at what the problem is. You're ignoring supply, population growth, etc.

We need actual data to make an informed decision. What's happened here is typical electioneering from the government.


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PostPosted: Fri Apr 21, 2017 10:19 pm
 


p


Last edited by Lemmy on Wed May 03, 2017 7:00 am, edited 1 time in total.

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PostPosted: Fri Apr 21, 2017 11:18 pm
 


Lemmy wrote:
Demand doesn't care about your moral ranking of its components. The market doesn't care if the reason you're buying is to arbitrage or raise a family. Nor should it.


Basically the thesis statement of your last post. To which I reply: that is exactly why governments exist in the first place. Markets don't have morals but people do; markets don't solve all problems and in fact can create new problems or exacerbate existing ones. That's exactly why we have this thing called public policy.


Last edited by BeaverFever on Fri Apr 21, 2017 11:31 pm, edited 2 times in total.

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