Canada's 'housing bubble' deemed close to bursting

[lio45]

Originally Posted by rousseau

Not sure if this is evidence of prices plateauing or not.

Rising interest rates WILL cool off the market, it's a phenomenon as reliable as the laws of physics.

I expect plateauing in my markets, and some deflating in the really bubbly ones (Toronto, Vancouver).

[lio45]

Originally Posted by someone123

Cash out of $3M Vancouver house tax free, buy retirement community property for summer, travel as snowbird in winter, Airbnb property if desired. Defer property taxes. Free healthcare and free or subsidized fights/ferries to large hospitals as needed. CPP/OAS provides good return on fees paid in. Government imports service workers to keep wages down, e.g. $15/hour, so that it's possible to hire people to do cooking, cleaning, and personal care if needed.

Now, all the younger generations have to do to emulate this is work as hard as Boomers did.

[theman23]

Originally Posted by lio45

Now, all the younger generations have to do to emulate this is work as hard as Boomers did.

No better way of getting ahead in life than working as a burger flipper in an isolated town full of dying seniors.

[casper]

Originally Posted by someone123

They don't have workers because they don't pay competitive or living wages. The low end immigrant labour system (the kind where $15/hour pay is uneconomical) works in part because they save up to move back to a lower cost environment or pay remittances, something not available in the same way to native-born Canadians. Or they just have lower living standards expectations. I don't think this is a good system in the long run. For one thing we need a solution for the Canadians who don't get paid living wages, not just the businesses.

The small town restaurant is one vignette but the bigger backdrop is large corporate profits and declining wages as a share of GDP. The simplest ideal solution is to let wages rebalance at a higher equilibrium point (finally). It's much like housing where tiny interest rate hikes are treated like the end of the world while $1M shacks are considered a good thing. We probably should just have an economy with 2-3% inflation, reasonable house prices, and McWorkers getting paid $25 an hour with a lot of labour-intensive businesses shutting down, allowing other more productive businesses to operate.

If the minimum wage is not a living wage the solution is to raise the minimum wage. That is what have been happening. In BC it is above $15 and tied to inflation.

I don't buy the argument that companies are not paying enough and if they raise rates the problem is solved. If every employer raised their salary by $10 an hour what does that do to availability of workers? Absolutely nothing. We still have the problem there their are not enough workers .

What are the McWorker positions your talking about? Retail, janitorial, warehousing, agriculture etc. Yes, automation can address some of these but honestly we still need people in society doing these things. Our hospitals, offices and schools need to be cleaned. Someone needs to harvest eggs on a chicken farm etc.

[casper]

Originally Posted by someone123

Cash out of $3M Vancouver house tax free, buy retirement community property for summer, travel as snowbird in winter, Airbnb property if desired. Defer property taxes. Free healthcare and free or subsidized fights/ferries to large hospitals as needed. CPP/OAS provides good return on fees paid in. Government imports service workers to keep wages down, e.g. $15/hour, so that it's possible to hire people to do cooking, cleaning, and personal care if needed.

That model works. It is not the only model, but it is one that works.

[someone123]

Originally Posted by casper

I don't buy the argument that companies are not paying enough and if they raise rates the problem is solved. If every employer raised their salary by $10 an hour what does that do to availability of workers? Absolutely nothing. We still have the problem there their are not enough workers .

This is incorrect. The supply can and does change in response to wages, and the participation rate in the population can change. For example you may have somebody who earns outsized returns on real estate so they decide there's no point in working more, or you may have a household with highly disparate incomes that decides to drop to 1 income (tech worker + McJob university educated worker), or you may simply decide to shift your ambitions downward and work fewer hours or not at all in the conventional economy (homeless, live with parents and work part time at Starbucks, etc.).

While minimum wage may be pegged to the CPI, I think it's pretty clear wages are not keeping up with inflation, and minimum wage is not a living wage in BC. Incidentally when I did a road trip around the US it was interesting how many McJobs offered much higher salaries than here, before accounting for the exchange rate or lower cost of living there. Small towns in Oregon offering $17/hr US and so on. Cue lecturing about health insurance.

[lio45]

Originally Posted by casper

If the minimum wage is not a living wage the solution is to raise the minimum wage.

What's the solution for the fact that the ratio minimum wage : price of houses is completely out of whack in the Lower Mainland?

[MonkeyRonin]

Originally Posted by someone123

Cash out of $3M Vancouver house tax free, buy retirement community property for summer, travel as snowbird in winter, Airbnb property if desired. Defer property taxes. Free healthcare and free or subsidized fights/ferries to large hospitals as needed. CPP/OAS provides good return on fees paid in. Government imports service workers to keep wages down, e.g. $15/hour, so that it's possible to hire people to do cooking, cleaning, and personal care if needed.

The Canadian Dream.

[theman23]

Originally Posted by lio45

What's the solution for the fact that the ratio minimum wage : price of houses is completely out of whack in the Lower Mainland?

Adjust your expectations. Rent out of of casper's basement suites. Only $1800 a month, $2000 if you want the window. That's only 75% of your income at minimum wage.

[swimmer_spe]

Originally Posted by casper

If the minimum wage is not a living wage the solution is to raise the minimum wage. That is what have been happening. In BC it is above $15 and tied to inflation.

I don't buy the argument that companies are not paying enough and if they raise rates the problem is solved. If every employer raised their salary by $10 an hour what does that do to availability of workers? Absolutely nothing. We still have the problem there their are not enough workers .

What are the McWorker positions your talking about? Retail, janitorial, warehousing, agriculture etc. Yes, automation can address some of these but honestly we still need people in society doing these things. Our hospitals, offices and schools need to be cleaned. Someone needs to harvest eggs on a chicken farm etc.

Most if not all of work that anyone does in the world can be done by automation. That means that there is a strong reality that one day, you job will become obsolete. When a company sees that it is more profitable to switch to automation, they will. This goes back to taxing the rich/corporations.McDonalds has replaced most front desk workers with a screen that you order from. How many workers are cut due to that? What the governments should do is every year, set a minimum wage based on what the living wage is. They should adjust it or hold it stable, such that you would never hire workers at a lower rate. They should also bring laws in that all workers must get a raise of 1%+inflation every year they have been working for.

A lot of people took the time during the pandemic and using CERB to better themselves. They did exactly what people have been telling them to do. Now all those crappy jobs are not being filled? Then raise the wage and improve the working conditions to a point where someone wants to do it.

If all of this means your business is going to close, then your business model was not viable.

[SpongeG]

Loads of people are pissed off that they have to do self-checkout at Walmart these days, and when they find out they can't even get a shopping bag lol. But it's become the norm, Walmart says that they use the replaced cashiers in other departments and no jobs are lost. Personally, I always have problems at Superstore self-checkout and end up having to get the attendant to come fix something. Costco has self-checkouts too but some of the stores have an attendant who does all the scanning for you, which kind of defeats the puropose.

Freshi has started to use virtual assistants. At least you are dealing with a real person albeit via video screen. This could become the norm at more places. I prefer the touch screen ordering at most fast food places these days cause like at most McDonalds they only have 1 real person at the counter and they are usually too busy.

https://www.cbc.ca/news/canada/briti...s-bc-1.6467798


A virtual cashier is pictured at a Freshii restaurant in Kamloops, B.C., on Monday, May 23, 2022. (Ben Nelms/CBC)

A new way of ordering food has entered the conversation in B.C. — virtual cashiers are popping up at fast-food franchise Freshii locations across the country.

Rather than having a person standing there in real life taking your order, they're live on a screen taking orders from somewhere else.

The idea is getting some backlash, with many raising concerns about wages and working conditions. According to a report from the Toronto Star, these individuals are making about $3.75 US (about $4.78 Cdn) per hour — a stark contrast to the $15.65 Cdn minimum wage in B.C.

[casper]

Originally Posted by SpongeG

Loads of people are pissed off that they have to do self-checkout at Walmart these days, and when they find out they can't even get a shopping bag lol. But it's become the norm, Walmart says that they use the replaced cashiers in other departments and no jobs are lost. Personally, I always have problems at Superstore self-checkout and end up having to get the attendant to come fix something. Costco has self-checkouts too but some of the stores have an attendant who does all the scanning for you, which kind of defeats the puropose.

Freshi has started to use virtual assistants. At least you are dealing with a real person albeit via video screen. This could become the norm at more places. I prefer the touch screen ordering at most fast food places these days cause like at most McDonalds they only have 1 real person at the counter and they are usually too busy.

https://www.cbc.ca/news/canada/briti...s-bc-1.6467798


A virtual cashier is pictured at a Freshii restaurant in Kamloops, B.C., on Monday, May 23, 2022. (Ben Nelms/CBC)

The problem with self checkout is the tare weight. The place where put the grocers has a scale and it should be tared to zero with the weight of your bags.

The Costco I go to only have an attended helping scan the items during peek hours where there are long lines. outside of that they behave like normal lines.

I have a real problem with the Freshii virtual assistant. Hiring someone in a third world country to virtually replace someone in Canada like that is legal but may not be consistent with the relationship the company wants to have with the local community and the ethics it wants to demonstrate. Perhaps if Freshii has no ethics and does not care about the community then it is fine.

[casper]

Originally Posted by swimmer_spe

Most if not all of work that anyone does in the world can be done by automation. That means that there is a strong reality that one day, you job will become obsolete. When a company sees that it is more profitable to switch to automation, they will. This goes back to taxing the rich/corporations.McDonalds has replaced most front desk workers with a screen that you order from. How many workers are cut due to that? What the governments should do is every year, set a minimum wage based on what the living wage is. They should adjust it or hold it stable, such that you would never hire workers at a lower rate. They should also bring laws in that all workers must get a raise of 1%+inflation every year they have been working for.

A lot of people took the time during the pandemic and using CERB to better themselves. They did exactly what people have been telling them to do. Now all those crappy jobs are not being filled? Then raise the wage and improve the working conditions to a point where someone wants to do it.

If all of this means your business is going to close, then your business model was not viable.

I don't dispute that many jobs will be replaced with automation. I think we are still at the point where we don't have sufficient people.

[travis3000]

5 year fixed rates are now all over 5% for the big banks. If you meet certain criteria with some other lenders you can still find 4.3 to 4.7%. But it's becoming increasingly harder.

Prices have already dropped by 10-20% across the entire Greater Toronto area from the price peak in Feb/early March. It depends on location and product but we've seen some clear price drops in almost all segments of the market. Toronto itself is weathering the storm better with prices more just holding steady. But once you get into Niagara/St Catherines/Hamilton/Peel/York/Durham/Dufferin/Simcoe County and even into London/Kitchener/Waterloo... all seeing declines of around 10-20%. I think another 10% decline is likely in these areas by end of year. With rising rates its inevitable.

When the dust settles there will be some regions in the GTHA that experience 30% declines in home prices from the February peak. Sounds steep but these same areas experienced 50% increases in prices over COVID. So they will still be 10-20% higher compared to March 2020.

[casper]

Originally Posted by lio45

What's the solution for the fact that the ratio minimum wage : price of houses is completely out of whack in the Lower Mainland?

A diverse mix of solutions...

- Build more Social housing
- Build more Co-op housing
- Build more student housing
- Build more assisted living
- Expanding the number of legal secondary seats and lane way home. Mortgage helpers etc.
- Expansion of commuter rail, skytrain making more outlying areas more accessible..

We have a supply problem. Flood the market with supply.

[LightingGuy]

Originally Posted by casper

A diverse mix of solutions...

- Build more Social housing
- Build more Co-op housing
- Build more student housing
- Build more assisted living
- Expanding the number of legal secondary seats and lane way home. Mortgage helpers etc.
- Expansion of commuter rail, skytrain making more outlying areas more accessible..

We have a supply problem. Flood the market with supply.

Agreed. And I would add we also need more houses for everyday Joes with a wife two kids and a dog. Government doesn't build housing, the private sector does. We need to address what's preventing the private sector from building the housing. It's not a lack of demand or poor economics. It's just barriers at the municipal and provincial levels (in Ontario at least).

[swimmer_spe]

Originally Posted by casper

A diverse mix of solutions...

- Build more Social housing
- Build more Co-op housing
- Build more student housing
- Build more assisted living
- Expanding the number of legal secondary seats and lane way home. Mortgage helpers etc.
- Expansion of commuter rail, skytrain making more outlying areas more accessible..

We have a supply problem. Flood the market with supply.

Imagine a world where most work could be done at home. Where, as long as you had an internet connection, you could live anywhere.

Oh, wait, we had that for almost 2 years. But now greedy corporations must justify their real estate holdings. The First Canadian Place, for instance, is the tallest building in Canada, after the CN Tower and the Superstack in Sudbury. It houses offices for banks. During the pandemic, it was mainly empty. Maybe if it were emptied again, and then converted into housing it could solve the problem. How many more of these office towers in our largest cities are not really needed?

[WarrenC12]

Personally I use apps and self-checkout whenever I can. I hate dealing with cashiers, and particularly in places like Tim Hortons or McDonalds where they are almost useless.

[esquire]

Originally Posted by WarrenC12

Personally I use apps and self-checkout whenever I can. I hate dealing with cashiers, and particularly in places like Tim Hortons or McDonalds where they are almost useless.

I will tolerate self-checkout for small orders (e.g. buying less than 12 items) but I would never do it for an entire grocery order, let's say. As I noted before, I walked out of a Walmart leaving a full cart of groceries when they told me they expected me to scan the entire cart. No doubt that would have meant having to wait for the attendant 20 times because of some glitches. Not gonna happen.

That Freshii thing with the staff appearing remotely from overseas does nothing to endear their brand to me. Not that I was a huge fan of theirs before.

[LightingGuy]

Originally Posted by swimmer_spe

Imagine a world where most work could be done at home. Where, as long as you had an internet connection, you could live anywhere.

Oh, wait, we had that for almost 2 years. But now greedy corporations must justify their real estate holdings.

I'm guessing you've never owned a business before? The whole point of a business is to make a profit. If you don't make a profit you eventually cease to exist. So there is nothing that a business loves more than to cut unnecessary costs. Commercial office space is a massive expense that any competent business owner would love to get off their ledger if they could and it made economic sense for their business.

There are certain jobs which can be done just as effectively from home as they can be from the office. However there are other jobs that are done more effectively and efficiently at the office. These will likely be jobs that require more collaberation with colleagues, where it is just more efficient to do in person.

During the pandemic everyone was on a level playing field - work from home. But now that things are back to normal (basically) the fundamentals have shifted. Businesses have to figure out which positions are better suited for the office and which ones can be done from home just as effectively. And with a possible recession coming up businesses are scrambling to make themselves as efficient as possible so that they can survive the recession without having to lay people off.

Nobody enjoys pissing off their employees, but the actual survival of the company comes first. No one is forcing anyone to work there. But the company needs to actually survive in the first place in order for it to be able to employ people.

The reality is that nobody knows for sure which way is more effective - and multiply this by all the thousands of different types of office jobs in existence. The market needs to figure this out for each and every job. Some companies are going to continue working from home, and some are going back to the office full time. However in a few years with more data we will have a better idea of what works best, through trial and error of businesses.

It's not a mystery that people enjoy working from home more, and every company on earth would prefer that their staff are as happy with their work situation as can be. But if your competition has all their people back at the office and they are twice as profitable with everythign else kept the same, then you have to do the same or risk killing your business.

We will find out in due time what works best for a whole bunch of positions across many different industries - it's going to be interesting.