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.