Canada housing is on fire. Prices are surging. This should be great news should it not. There is only one thing wring with this story. Canada’s housing market is Rising but so are the Bubble Fears. Yes the bubble fear is starting rise among economists around the world. Just last week David Rosenberg says Canada’s housing market in a ‘huge bubble’. Now this guy should know what he’s talking about. ‘This might be one of the biggest bubbles of all time’ he stated.
Now any good Canadian knows that housing has always been expensive in our big cities like Vancouver and Toronto. Real Estate experts from coast to coast are all putting in their 2 cents but know one really knows what the outcome might be. Let’s face it Canada is a housing kind of nation. I mean we have a lot of trees we chopped down so we gotta do something with em, Right! So let’s build houses and open up the borders so people around the globe can come live in them.
The Government of Canada has no intention of stopping the housing bubbles we create my friends. Housing and the fees that go with it churn out billion of bucks yearly for the Feds and local government as well. They won’t end this cash cow anytime soon. So don’t hope house prices will crash and your going to get a bargain. Your best bet is to buy a tent and head out into the forest if your looking for cheap accommodation.
Immigration is about to explode
One factor that is going to make the bubble bigger is the coming immigration tsunami after the Covid fears ease. When that gate is opened up there will be thousands of immigrants heading to the cities looking for a home. This is going to drive home prices to levels you will need an oxygen tank for. People with deep pockets will be snapping up the luxury market and the peons will be living in bunk beds. I know this sounds like a sad reality but let’s face it there is just not enough housing available. Canada is a ripe tree with lot’s of delicious fruit just ready to pluck. Students of the rich around the world will be flocking in also to get a Canadian Diploma renowned everywhere around the globe.
Housing is also the best hedge against inflation. Believe me when I say, inflation is coming if not already here. Those trillions of Yankee green are going to spill over into Canada when the borders open. Like a swarm of hungry locust they will buy up everything with the high flying dollar. Yup, were in trouble. So what is the answer?
Renting over Owning
The only answer to solve this problem for the working poor is renting supply. There is just one problem with this. Who is going to build it. Builders don’t want to get bogged down in renting when governments are introducing control’s and other measures. Developers are out to make money. Maybe tracts of government land and grants could be introduced to build housing for the poor. Sound like communism. Chances of this happening in Canada in my opinion are pretty slim. Socialist government like the NDP party are becoming more popular. If these parties can some how tax the rich and build housing for the poor maybe their is hope.
It’s hard to say what the answer is but at this time in our history it’s not looking good. Of course if your an owner of Real Estate and have been for awhile your probably dancing in the streets. Yes I can remember a time when a house in South Vancouver was only 10,000. You read that right folks. When you hit my age it actually doesn’t seem that long ago. Now that house is pushing 2 million. If you think that house is ever going to go back down to the original price then I got a bridge in Russia to sell you. Real Estate has always been the no 1 investment for Canadians and it will be for the foreseeable future.
The offspring of these equity rich tycoons are going to benefit from this. Parents of the so called millennium generation are heading to the bank. Cash loaded Mom and Pop are dishing out down payment’s for the kids. As of this writing house prices are starting to soar because of this. Mom and Pop know that Real Estate is where it’s at and they want their kid’s in now before it’s just too late.
When the Fear Subsides
One thing is for certain. When any type of catastrophe ends it is soon forgotten. People are funny that way. Thing’s that happen only a year ago are soon forgotten. If you have ever gone through heartbreak and you think your going to die you know what I am talking about. A few years down the road and you can’t even remember your exes name. Especially if you have met a new one. This is what is going to happen in the cities with housing!
As soon as this pandemic is behind us the cities are going to experience a reverse movement. High flying real estate in the suburbs that was so highly sought after will be sold off. Younger people will start flocking back to the cities in droves to experience the social life. Many high paying jobs in Tech are moving into the cites taking advantage of the great deals in commercial space. This trend is about to grow. Condo’s in the cities are a deal right now but this will not last. Younger people that are getting into these tech jobs are going to have lot’s of cash and will be looking for a place to live. Condo’s will be the first choice. Combine this with the flood of immigrant’s about to come and we have a problem! Not enough supply.