Quote:
Originally Posted by Keith P.
One thing to remember about housing and what it costs is that expensive housing is a relatively recent phenomenon of just the last 5 or 6 years. In the 1980s and '90s I lived in several of the large apartment blocks around SGR. When I moved there in the early '80s I was paying something like $600/mo, and when I moved away in the late '90s it was around $900/mo, so not unreasonable inflation. There's a long way to make that into today's $2500 or $3000/mo., especially for the same 1970s buildings.
I bought my house in the late '90s for $115K if memory serves. The identical house nearby was recently purchased for $500K+. I would expect to get even more if I sold it today. Why? Covid seemed to spark a change in that equation as people fled here from big cities, combined with runaway immigration spiking demand for housing of any sort (thanks, JT). That led to rentals with 8 mattresses on the floor, something never seen here previously, and something that govts would have previously come down hard on but which they no longer seem to care about. We have only ourselves and our leaders to blame. Govts making a fortune raking in taxes from all those people working and buying stuff blinds them to the costs, both financial and social.
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There's an undercurrent in Canada that we are not supposed to talk about but I think a lot of people, particularly younger people, are figuring out about how fake our monetary system is as well as our "economy" is.
We were already dead-set on a massive recession back in Sept. 2019 but western governments started quantitative easing procedures and they needed plausible deniability to do it without completely imploding the markets out in the open for people to see. I won't get into the 1:1 conspiracy theory behind the extreme reaction to COVID (the policies, not the disease) but it is awfully convenient how it went down. That said, the BoC essentially doubled the M2 money in the system which naturally would cause huge inflation, particularly asset inflation as our economy is not productive as is (innovation, manufacturing, etc.) so most of that new funny money got parked into housing rather than other parts of the economy.
The other aspect is fractional-reserve banking which since the 1970s/80s went from something like 70% of reserves to now being essentially 0% meaning banks were loaning money they had none of in the first place distorting the financial markets. I only learned very recently that up until 1974 the Bank of Canada would provide interest-free loans to the government for infrastructure spending with reasonably pay-back timelines which allowed our country to build the Trans-Canada Highway, St. Lawrence Seaway, etc., without ballooning the federal debt. Then the BIS stepped in, and well... look at deficit spending and inflation that skyrocketed from the mid-1970s to the 1980s.
My last gripe is about HELOC loans and "unrealized gains" and how rigged the system is. For example Keith, if your house you've owned for 30 years has increased in value x5 then to leverage those extra "gains" to access another 500k in loans with the house as collateral to... buy more property, to leverage the unrealized value for loans for... buying more property... you get the picture. It creates a 'slumlord' class of older established people gaming the system for more assets while young educated people and young families are cut off from the system entirely. It's a rigged game and I can't imagine younger people are willing to play it much longer if they have to sacrifice everything for nothing in return. This cynicism usually manifests hatred towards everyday boomers that aren't necessarily the cause of the problem, but definitely benefit from it.
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(which should be five cents now, given that most of us probably don’t remember the penny as actual currency)
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