The sales data in the GTA last month represents a delayed spring market, and prices are skewed up by more low-rise home sales but it doesn't change the fact that this is the exact opposite trend that was predicted by most economists including CMHC ca.finance.yahoo.com/news/august-gr…
So far, the only forecast I'm aware of that is even remotely close to being accurate is from @TD_Economics . They were mocked for predicting at the height of the pandemic that GTA prices would end the year up 8%, they are currently up 13% torontostoreys.com/toronto-home-p…
And to be clear, I did not predict the market would be booming during a pandemic and have no idea how long this will last. My point is that overconfidence is a behavioural bias often associated with bulls - but bears are just as vulnerable to this bias.
In April, every housing bear was absolutely certain that prices would crash because of record unemployment and a surge in mortgage deferrals. It was "obvious" prices would crash and to suggest otherwise meant you were clearly "self-interested" and providing biased analysis.
It is interesting how the things that seemed obvious one month are not so obvious three months later. Will prices fall one day, of course. Will they fall by the end of this year? I wouldn't hold your breath!
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A thread on some of the bigger issues with 🇨🇦's obsession with real estate as an investment.
Firstly, the issues surrounding investors buying condos vs low-rise houses are quite different. 🧵⤵️
The fact that most of Canada’s rental supply has been filled by investors buying condos and converting them to rentals is a product of our government’s decision decades ago to not invest in and prioritize permanent rental housing 2/
This is not the best way to build rental housing, and our government is making some good strides in prioritizing PBRs
But the reality is that there are often path dependencies with housing policies, which means investors buying condos can’t change any time soon 3/
Last week, Canada’s immigration minister, Marc Miller, announced that the Liberal federal government plans to reduce the number of non-permanent residents (NPR) in Canada from the current 6.2% share of total population to 5% over the next three years. 2/
On the surface, this reduction doesn’t sound like a noteworthy announcement that will have much of an impact
But a closer look at the data makes it clear that this is a significant shift in policy & one that will have wide-reaching effects, particularly on the housing market 3/
This piece argues that 🇨🇦’s 🏠 crisis cannot be solved with a singular focus on building more homes
It suggests that 🇨🇦 should reduce the number of non-permanent residents by 1M people to ease the demand for 🏠 thehub.ca/2024-02-21/mik…
This is a very big change in the main narrative re: our housing crisis
For years, most experts & politicians argued that the solution to our 🏠 crisis was to "Build More Homes"
Countless op-eds and editorials were written blaming supply restrictions for our housing crisis 2/
Do we need more homes? Of course!
But our housing shortage is largely a function of our government’s decision to triple our country’s population growth rate without giving any thought to where everyone will live
A decision that hurt renters and benefitted homeowners 3/
Why did our federal government ignore the warnings of public servants if the impact of Canada’s high population growth on housing was so obvious?
If you rewind the clock by more than 2 years, you'll see that these impacts were not so obvious to some 1/ movesmartly.com/articles/the-f…
Most housing economists at that time concluded that Canada’s booming population wasn’t the key driver of rising home prices.
The key driver of rapidly rising home prices, they argued, was a “lack of supply” driven mainly by municipal inefficiencies and zoning restrictions 2/
While some economists did argue that the rate of growth in Canada’s population was too high and was the main factor driving up house prices and rents, they were the minority voices.
Most housing experts, economists and every political party blamed a “lack of supply” 3/
Homes in Canada have become financial assets for the rich
“We have a large corporation going into smaller communities, scooping up affordable units, making them inaccessible for many of the local residents, and renting them out to the corporation’s sole advantage” 2/
One of the reasons why I often disagree with the housing advocates and economists who argue that the solution to our housing crisis is to just “build more homes”
Is that many of them actually support corporations buying up single-family homes 3/