Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Tag: Housing prices

Canadian Housing And Immigration Policy

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On January 4, 2023

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So, Canada has done two interesting things in the last couple years to deal with the effects of Covid. The first is let in a lot more immigrants:

Canada added more than 431,000 new permanent residents last year, the largest annual increase in its history, as Prime Minister Justin Trudeau seeks to ease the country’s labor shortages.

The new admissions met the 2022 target set by Trudeau’s government and exceeded the prior year’s record of about 401,000 newcomers, according to a release from Immigration, Refugees and Citizenship Canada on Tuesday.

The Canadian government has consistently raised its annual immigration goals in recent years, with the latest plan targeting 465,000 new permanent residents this year and half a million in 2025. The policies have also propelled population growth to a fresh record and may be contributing to a decline in the country’s median age.

Immigration accounts for nearly all of Canada’s labor-force growth and about 75% of the nation’s population growth.

When you realize that the Canadian population is only about 39 million you’ll understand how radically large this number of immigrants is.

This is an attempt to keep wages and inflation down. Without immigrants, wages would rise quickly, and that can’t be allowed, since Canada, like most developed countries, considers wage inflation almost the only type of inflation which matters.

Almost. To my surprise, Trudeau has decided to do something about housing inflation (something I’ve been calling for for many years):

A two-year ban on some foreigners buying homes in Canada has come into effect.

The ban aims to help ease one of the most unaffordable housing markets in the world.

As of this summer, the average home price in Canada is C$777,200 ($568,000; £473,700) – more than 11 times the median household income after taxes….

…As of 1 January, the ban prohibits people who are not Canadian citizens or permanent residents from buying residential properties, and imposes a C$10,000 fine on those who breach it.

This won’t be enough to cool the housing market much, though the last year has seen a slight decrease in prices. Still, Canada remains one of the most expensive markets in the world: more than New Zealand or the USA.

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(Correction: In addition to a fine, the government can order the house sold, but it’s not automatic and should be)/ In addition a ban of all AirBnB rentals not of the own person’s home (or perhaps one vacation property) and the seizure of all non vacation/summer housing left empty of residents for more than 3 months for any reason other than ongoing renovations would actually cut prices and rents significantly.

The Canadian government needs a lot more people to keep wages down, but if immigrants can’t find housing in cities with jobs (and they can’t, the markets are insanely pricey and few rental units are available at prices immigrants can afford), then the immigration push might well stall out.

Thus the attempt to cool the housing market. This is more intelligent policy than I’m used to from Western governments, but it’s still in service of expanding inequality, virtually the only priority of most developed world nations.

Nonetheless, a golf clap for Prime Minister Trudeau. He’s stupid and venal, but not a complete idiot.

 

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How Over-priced Is the US Housing Market?

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On October 2, 2018

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This is one answer:

The bottom line, then, is that it’s more overbought than it was in 2008.

If the government had not intervened to keep it over-inflated, it would likely have reverted to mean, but trillions of dollars were spent, and many laws were bent and indeed, broken, to keep house prices up.

Indeed, 2008 was used as a buying opportunity: Distressed homes were bought up at cents on the dollar, then rented or sold at inflated prices.

The entire economy is crooked: It is designed to favor the rich no matter who else that hurts.

There are little people who win, but they are fewer and fewer. And virtually no one below the age of 40 is a winner in this unless they are professionally involved, i.e., in on the scam.

Housing should never have been thought of as an investment. Houses should be for living in, and people who own them to flip them should be heavily penalized. Those who own them and leave them empty should have them seized by the government and auctioned. And, yeah, some form of rent control is needed in most places.

Of course foreign buyers must be kept out of the market. Housing is for people who live in the country; foreigners can rent.

As for mortgages, they should be dead boring; for most people fixed rated mortgages of 20 to 30 years fit.

None of this should be objectionable. But there are people making a lot of money out of the misery of other people, and parasites don’t like letting go of their hosts.

Parasitical economies–and most developed countries have one–exist by immiserating people.

This is the real reason for the current push for basic income: The parasite class is scared they may be about to kill the host, and want a government infusion to keep the poor and the (reduced) middle class stumbling on.

I don’t oppose a basic income, but understand that billionaires aren’t supporting it out of the goodness of their hearts. They expect to take every cent the government gives you.

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A World Without Poor People (Sort of)

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On July 27, 2017

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Because the last time it was done, it was not forbidden, because good jobs cluster in only a few regions now, and because of vast influxes of foreign money, we have charts like this:

So, almost a 100 percent increase in five and a half years. (People living in Vancouver wish housing prices had only risen this much.)

Meanwhile, the Fed is muttering to itself about how there is almost no inflation, because they don’t measure housing price increases as inflation and consider the most important inflation that which does not include energy and food.

In other words, if the price of having a home, staying warm or cool in your home, driving your car, or feeding yourself is going up, well, that’s just not very important.

A lot of people got very rich in real estate speculation, mortgages, and downstream securities last time, and the vast majority of the rich ones got to keep the money they made. Even those who lost it, were mostly made whole by government. (Ordinary home owners were, uhhh, not made whole.)

Given it worked last time, and given that there was no real penalty for doing it, and that the Fed and other central banks proved they were willing to bail out the rich to the tune of trillions of dollars, why not run the play again? The profits are privatized; the losses at the end will be socialized. Heck, with a bit of luck the Fed will print money pre-emptively to make sure that there is never a crisis for rich people ever again, just ever-increasing asset prices.

(This applies to the stock market as well.)

There is, mind you, a real economy buried under all the money being funneled to rich people somewhere, and at some point that economy may just collapse. After all, all the people who own these fancy condos and houses expect a servant class to take care of them.

But perhaps that labor can all be turned over to robots, as Silicon Valley wants, and the poor can just be expelled from places like SoCal, DC, New York, Vancouver, and Toronto entirely, to slowly drug themselves to death, or perhaps just starve, in the vast interior wastelands of the continent where “real” people don’t want to live.

This is, fairly explicitly, what Silicon Valley techbros want; they want to eliminate the need for surplus people.

I wonder, though, how many of them will find that they too, are surplus, when AI becomes able to code and write ads.

It will, at least, be amusing.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

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