A couple of things jump out at me here. The first is the false statement that keeps getting repeated so that otherwise informed people think it's true. There was ONE person with a Confederate flag and ONE person with a swastika, and both these people were outside influencers that we immediately shut down. STOP repeating this lie! The second comment I would make is that the Truckers and their supporters weren't asking for financial reform or help from government. They want LESS government control in all aspects of our lives. Treat us like adults that can make our own decisions and stop lying to us and spying on us. How can government help? Give us accurate data, not politicized, and get out of the way. Help the truly poor and disadvantaged for sure, but stop buying votes and controlling the media.
Now, housing is another issue, and we see 2008 looming once again. Thanks for your insights into that problem.
Excellent, perspicacious article. Many feeling disillusioned by government obfuscation and inaction on the housing file. Terrible financial burden for new generations. Can't believe there is any support at all for current governing parties. If young people stay out of housing market, they will be poor tenants in the future. If they get in the market, they will be house poor or living in a shoebox.
"What I worry about now is the reaction of our political class to all of this, which has been not good."
I would rephrase this because it projects that it was just a mistake in messaging. No, it was proof that our political class not only lacks empathy and care for working class people, but they are committed to stomp on their necks until they die.
"Yes, there were white supremacists in this protest, carrying around Confederate flags."
Let's agree to effing stop this right now. There are about 40 true white supremacists in Canada and maybe 140 in the US (people who believe that the white race is superior and want to purge everyone else from the country). They don't go out and protest. They build their bunkers and fill them with ammo and dried food supplies in anticipation of the race war apocalypse. Those you see carrying confederate flags are leftist activists farming this very talking point in the media. Just as every national hate crime of whites against blacks is proven a hoax by the victim. So just stop repeating the lies.
Way too much focus on the Confederate flag issue to fog the discussion. Compared to the number of other flags perhaps .01%. The more interesting aspect was your question of why the trend toward smaller towns. In my view it has more to do with the declining quality of life offered in the conglomerations like the GTHA in Ontario. The greed of developers, the lousy civic leadership from mayors down to dysfunctional school and the rise in petty day to day crime not to mention drug/gun crimes rounds it out. Populism is driven by the fatigue of regular law-abiding folks who have had it with a self-serving elite leadership that is happy creating and managing a community that fits their niche view of a fair and inclusive society that works by excluding or moreover penalizing others based on their gender, economic status, race or political persuasion.
Blackrock, Blackstone, and foreign oligarchs will own all the real estate, we'll all just be their serfs. If you commit any wrongthink, Castro Jr will seize your bank accounts and remove you from your rented shack to the gulags. You'll own nothing and you'll be happy!
Thank you for this analysis. I'm in California, where (as you're probably aware) the housing market is out of control. But the sense is exactly as you've portrayed it: a frenzy to get in, at all costs, because prices can only go up and so there's free money to be made. At some point something has to break, but there's the irrational exuberance and all, so nobody's contemplating that. I honestly cannot imagine how any normal person outside of Big Tech could possibly afford to live here. It's depressing to see that this now seems to be spreading everywhere else.
Daniel Tencer may understand economics and what is happening in the markets, but he is ignorant about politics and ideologies. I was shocked to hear him credit the NDP with having policies that might solve the problems facing the working class and lower middle class today.
The NDP, like all socialists, is devoted to failed Marxist ideas, like government management and control of the economy, management of everything done by bureaucrats, following policies dreamed up by ignorant politicians, and directly governing the lives of ordinary people, involving forcing them to behave according to the rules laid down by the bureaucrats because only "the 'experts' knew" what is best for the people.
This is what the Soviets tried - and they were abject failures at the economic development side of things, and autocratic and dictatorial about the people and social sides of life.
Entrepreneurship and individual initiative go out the windows when a collectivist and highly ideologically-driven socialist or Marxist mentality takes control.
In the Soviet Union, the bureaucrats and "experts" lived well, like the old aristocratic class, even availing themselves of special well-stocked consumer stores open to only them, and many of them, especially if they were also Communist Party members, were often able to purchase secondary vacation homes for their leisure time holidays and vacations.
Most consumer goods and other manufactured goods not intended for the military, such as farm machinery and equipment, were shoddily made and distribution throughout the countries of the Soviet Union was haphazard and inefficient, which, in turn hampered food production.
How such ideologically-driven policies could solve the problems Mr. Tencer describes, completely escapes me.
He has not provided a viable solution to the problems he describes.
Vancouver real estate prices have indeed been artificially inflated by offshore investment and even drug money. The first wave was Hong Kong money, starting after Expo 86 through the end of the 90s. The second wave, concurrently, was Taiwan money, from the 90’s through most of the early 2000s. Finally there was CCP money from the Naughts through til today. The result? An average house in Vancouver proper is over a $1 million. New homebuyers are forced into tiny condos, or farflung suburbs. The city, province and country sold the soul of Vancouver for the promise of more property tax revenue. Shame on them.
I had some capital. Could have purchased real estate. Instead I invested in a manufacturing business. It was not a good business move relative to how hard I am having to work just to stay afloat in a sea of more taxes and regulations compared to the large return I would have realized playing the real estate ponzi scheme like everyone else with some cash.
The elites have rigged the selfish-returns real estate game to fatten their bank accounts at the same time they have rigged the rest of the economy to make other collaborative-return business investments much less attractive.
If you think that this is all just by chance, I have some swampland if Florida to sell you.
I think "populism" is a reaction to the leftist "woke" movement. And they are both just a new version of the old debate between left and right thinking people.
Commenting again from Vancouver: I was at a party several years back with some neighbourhood acquaintances and strangers. Most of them home owners, a few—like me—lowly apartment renters. Some of us didn’t know who was who! I got to talking in one group and this woman was bitching about how she’s worried her kids won’t be able to afford living here when they grow up. So guess what she’s done?! Bought a couple extra houses so they’ll have somewhere to live when they move out!!!! In that same convo she talked about how “people should move elsewhere if they can’t afford it here”. Oh, and then it was time to discuss spring break plans in Whistler 🤣
Capital seeks a return. That is not capital's fault and not the capital owner's fault. But there is a simple principle of supply and demand that is the foundation of economic price theory. With the value of housing skyrocketing we would see more developers jumping in to building housing.
But they are not.
And the fact that they are not... is a key to understanding one big piece of the puzzle for too high housing.
On the American left coast where housing is the most expensive we can thank massive layering of government regulations, construction codes and fees...
In CA for example, the liberal progressives in charge of the state keep adding to Title-24... rules that MANDATE energy-saving upgrades to not only new development, but now if you add another square foot to any existing place. The estimate is 25% in additional costs just from title-24. And the liberals also implemented CEQA rules that means every development gets sued by the NIMBYs claiming a fake identity of tree-huggers and bug lovers... again driving up costs.
CA had a program - redevelopment associations - that was used to build some affordable housing. But when the Great Recession hit, Old Moonbeam Brown raided the RDA cookie jar to give raises to his CA teachers union benefactors.
Lastly, "Let's Go Brandon" as his wacky idiot leftist friends in power have destroyed the global supply chains and exploded energy costs while pumping trillions of new dollars into the economy... thus causing more consumerism at the same time they slowed production and goods movement. Now this might correct, but there is a bottlenecking problem where the demand will continue to exceed the supply for many months if not years... including building materials for new housing.
There is a lot of government COVID "relief" out there on the balance sheets of businesses that did not need the relief and their owners are taking big distributions and buying up real estate.
The other impact here is because of the massive tax and regulatory burden on non-real estate capital investment. Fucking start a business people... make some products and provide some jobs! But wait... it is almost like the government does not want you to do that. Instead they encourage you to become a landlord with your spare cash... thus creating more demand for the limited supply of housing units.
Oh... there is a too low supply of commercial space to even start a business.
Bottom line here... everything about housing cost hyperinflation should be blamed on government.,, primarily the liberal Democrat kind. So why are the kids mad at capitalism?
Ever since free trade was introduced in a big way the working class has been victimized. The good jobs were sent abroad and the workers who formerly held these jobs were told to find employment in retail. This eviscerated the middle class and caused much disaffection with governments. The pandemic, with its shut-down of small business has been an equal dampener on social connectivity. The truckers are simply the first to strongly state "enough" There were far more people supporting the protests than just truckers. This may be the beginning of a real pushback against the politicians who have allowed this to happen and who seem determined to perpetuate the destruction of all but the elite.
Regarding the 'unremarkable bungalow'... I am not sure what is more frustrating - the fact that this house sold for such an exorbitant sum of money, or the fact that a very large minority in this counrty, including the highy educated earners with 'good' salaries, can only dream about such a unremarkable house and would be thrilled to own one.
I think you are missing the biggest point in our insane housing market. We have the most land per capita on earth and yet among the highest real estate prices based on income. Clearly this makes no economic sense until we connect the dots....
The feds plummet interest rates to all-time lows driving up demand and yet our municipal and provincial governments are totally anti-development so they squeeze supply to little droplets here and there....during their onerous 'official plan' sessions every 15 years or so.
The first thing we learn in business school, in the first week, is supply and demand.
Low rates create high demand while little supply causes.....wonder of wonder, prices to rise.
Governments, get the hell out of the way, release your grip on onerous zoning and development rules and the let the builders build. When there are more houses than buyers, prices will stabilize or actually fall.
I read about ridiculous additional taxes that our fearless leaders want to impose....home equity tax, foreign buyers tax, capital gains tax on personal residences....is this the only tool in their toolbox?
When governments try to tinker with market economics, they mess it up, every single time.
Let market forces play out. It is the only thing that will solve the issue, period, full stop.
Two factors are fueling the housing crisis: our central bank's policies and money laundering.
Both are advantageous to our ruling political and business elites, no matter the political stripe. Thus why nothing will change short of a full-fledged revolution.
Complain all you want, but no amount of yelling and screaming will change a thing.
A couple of things jump out at me here. The first is the false statement that keeps getting repeated so that otherwise informed people think it's true. There was ONE person with a Confederate flag and ONE person with a swastika, and both these people were outside influencers that we immediately shut down. STOP repeating this lie! The second comment I would make is that the Truckers and their supporters weren't asking for financial reform or help from government. They want LESS government control in all aspects of our lives. Treat us like adults that can make our own decisions and stop lying to us and spying on us. How can government help? Give us accurate data, not politicized, and get out of the way. Help the truly poor and disadvantaged for sure, but stop buying votes and controlling the media.
Now, housing is another issue, and we see 2008 looming once again. Thanks for your insights into that problem.
Excellent, perspicacious article. Many feeling disillusioned by government obfuscation and inaction on the housing file. Terrible financial burden for new generations. Can't believe there is any support at all for current governing parties. If young people stay out of housing market, they will be poor tenants in the future. If they get in the market, they will be house poor or living in a shoebox.
"What I worry about now is the reaction of our political class to all of this, which has been not good."
I would rephrase this because it projects that it was just a mistake in messaging. No, it was proof that our political class not only lacks empathy and care for working class people, but they are committed to stomp on their necks until they die.
"Yes, there were white supremacists in this protest, carrying around Confederate flags."
Let's agree to effing stop this right now. There are about 40 true white supremacists in Canada and maybe 140 in the US (people who believe that the white race is superior and want to purge everyone else from the country). They don't go out and protest. They build their bunkers and fill them with ammo and dried food supplies in anticipation of the race war apocalypse. Those you see carrying confederate flags are leftist activists farming this very talking point in the media. Just as every national hate crime of whites against blacks is proven a hoax by the victim. So just stop repeating the lies.
Way too much focus on the Confederate flag issue to fog the discussion. Compared to the number of other flags perhaps .01%. The more interesting aspect was your question of why the trend toward smaller towns. In my view it has more to do with the declining quality of life offered in the conglomerations like the GTHA in Ontario. The greed of developers, the lousy civic leadership from mayors down to dysfunctional school and the rise in petty day to day crime not to mention drug/gun crimes rounds it out. Populism is driven by the fatigue of regular law-abiding folks who have had it with a self-serving elite leadership that is happy creating and managing a community that fits their niche view of a fair and inclusive society that works by excluding or moreover penalizing others based on their gender, economic status, race or political persuasion.
Blackrock, Blackstone, and foreign oligarchs will own all the real estate, we'll all just be their serfs. If you commit any wrongthink, Castro Jr will seize your bank accounts and remove you from your rented shack to the gulags. You'll own nothing and you'll be happy!
Thank you for this analysis. I'm in California, where (as you're probably aware) the housing market is out of control. But the sense is exactly as you've portrayed it: a frenzy to get in, at all costs, because prices can only go up and so there's free money to be made. At some point something has to break, but there's the irrational exuberance and all, so nobody's contemplating that. I honestly cannot imagine how any normal person outside of Big Tech could possibly afford to live here. It's depressing to see that this now seems to be spreading everywhere else.
Daniel Tencer may understand economics and what is happening in the markets, but he is ignorant about politics and ideologies. I was shocked to hear him credit the NDP with having policies that might solve the problems facing the working class and lower middle class today.
The NDP, like all socialists, is devoted to failed Marxist ideas, like government management and control of the economy, management of everything done by bureaucrats, following policies dreamed up by ignorant politicians, and directly governing the lives of ordinary people, involving forcing them to behave according to the rules laid down by the bureaucrats because only "the 'experts' knew" what is best for the people.
This is what the Soviets tried - and they were abject failures at the economic development side of things, and autocratic and dictatorial about the people and social sides of life.
Entrepreneurship and individual initiative go out the windows when a collectivist and highly ideologically-driven socialist or Marxist mentality takes control.
In the Soviet Union, the bureaucrats and "experts" lived well, like the old aristocratic class, even availing themselves of special well-stocked consumer stores open to only them, and many of them, especially if they were also Communist Party members, were often able to purchase secondary vacation homes for their leisure time holidays and vacations.
Most consumer goods and other manufactured goods not intended for the military, such as farm machinery and equipment, were shoddily made and distribution throughout the countries of the Soviet Union was haphazard and inefficient, which, in turn hampered food production.
How such ideologically-driven policies could solve the problems Mr. Tencer describes, completely escapes me.
He has not provided a viable solution to the problems he describes.
Vancouver real estate prices have indeed been artificially inflated by offshore investment and even drug money. The first wave was Hong Kong money, starting after Expo 86 through the end of the 90s. The second wave, concurrently, was Taiwan money, from the 90’s through most of the early 2000s. Finally there was CCP money from the Naughts through til today. The result? An average house in Vancouver proper is over a $1 million. New homebuyers are forced into tiny condos, or farflung suburbs. The city, province and country sold the soul of Vancouver for the promise of more property tax revenue. Shame on them.
I had some capital. Could have purchased real estate. Instead I invested in a manufacturing business. It was not a good business move relative to how hard I am having to work just to stay afloat in a sea of more taxes and regulations compared to the large return I would have realized playing the real estate ponzi scheme like everyone else with some cash.
The elites have rigged the selfish-returns real estate game to fatten their bank accounts at the same time they have rigged the rest of the economy to make other collaborative-return business investments much less attractive.
If you think that this is all just by chance, I have some swampland if Florida to sell you.
I think "populism" is a reaction to the leftist "woke" movement. And they are both just a new version of the old debate between left and right thinking people.
Commenting again from Vancouver: I was at a party several years back with some neighbourhood acquaintances and strangers. Most of them home owners, a few—like me—lowly apartment renters. Some of us didn’t know who was who! I got to talking in one group and this woman was bitching about how she’s worried her kids won’t be able to afford living here when they grow up. So guess what she’s done?! Bought a couple extra houses so they’ll have somewhere to live when they move out!!!! In that same convo she talked about how “people should move elsewhere if they can’t afford it here”. Oh, and then it was time to discuss spring break plans in Whistler 🤣
I’ll never forget it. The divide is HUGE.
Capital seeks a return. That is not capital's fault and not the capital owner's fault. But there is a simple principle of supply and demand that is the foundation of economic price theory. With the value of housing skyrocketing we would see more developers jumping in to building housing.
But they are not.
And the fact that they are not... is a key to understanding one big piece of the puzzle for too high housing.
On the American left coast where housing is the most expensive we can thank massive layering of government regulations, construction codes and fees...
In CA for example, the liberal progressives in charge of the state keep adding to Title-24... rules that MANDATE energy-saving upgrades to not only new development, but now if you add another square foot to any existing place. The estimate is 25% in additional costs just from title-24. And the liberals also implemented CEQA rules that means every development gets sued by the NIMBYs claiming a fake identity of tree-huggers and bug lovers... again driving up costs.
CA had a program - redevelopment associations - that was used to build some affordable housing. But when the Great Recession hit, Old Moonbeam Brown raided the RDA cookie jar to give raises to his CA teachers union benefactors.
Lastly, "Let's Go Brandon" as his wacky idiot leftist friends in power have destroyed the global supply chains and exploded energy costs while pumping trillions of new dollars into the economy... thus causing more consumerism at the same time they slowed production and goods movement. Now this might correct, but there is a bottlenecking problem where the demand will continue to exceed the supply for many months if not years... including building materials for new housing.
There is a lot of government COVID "relief" out there on the balance sheets of businesses that did not need the relief and their owners are taking big distributions and buying up real estate.
The other impact here is because of the massive tax and regulatory burden on non-real estate capital investment. Fucking start a business people... make some products and provide some jobs! But wait... it is almost like the government does not want you to do that. Instead they encourage you to become a landlord with your spare cash... thus creating more demand for the limited supply of housing units.
Oh... there is a too low supply of commercial space to even start a business.
Bottom line here... everything about housing cost hyperinflation should be blamed on government.,, primarily the liberal Democrat kind. So why are the kids mad at capitalism?
Ever since free trade was introduced in a big way the working class has been victimized. The good jobs were sent abroad and the workers who formerly held these jobs were told to find employment in retail. This eviscerated the middle class and caused much disaffection with governments. The pandemic, with its shut-down of small business has been an equal dampener on social connectivity. The truckers are simply the first to strongly state "enough" There were far more people supporting the protests than just truckers. This may be the beginning of a real pushback against the politicians who have allowed this to happen and who seem determined to perpetuate the destruction of all but the elite.
Regarding the 'unremarkable bungalow'... I am not sure what is more frustrating - the fact that this house sold for such an exorbitant sum of money, or the fact that a very large minority in this counrty, including the highy educated earners with 'good' salaries, can only dream about such a unremarkable house and would be thrilled to own one.
I think you are missing the biggest point in our insane housing market. We have the most land per capita on earth and yet among the highest real estate prices based on income. Clearly this makes no economic sense until we connect the dots....
The feds plummet interest rates to all-time lows driving up demand and yet our municipal and provincial governments are totally anti-development so they squeeze supply to little droplets here and there....during their onerous 'official plan' sessions every 15 years or so.
The first thing we learn in business school, in the first week, is supply and demand.
Low rates create high demand while little supply causes.....wonder of wonder, prices to rise.
Governments, get the hell out of the way, release your grip on onerous zoning and development rules and the let the builders build. When there are more houses than buyers, prices will stabilize or actually fall.
I read about ridiculous additional taxes that our fearless leaders want to impose....home equity tax, foreign buyers tax, capital gains tax on personal residences....is this the only tool in their toolbox?
When governments try to tinker with market economics, they mess it up, every single time.
Let market forces play out. It is the only thing that will solve the issue, period, full stop.
Increase supply, increase supply, increase supply.
Two factors are fueling the housing crisis: our central bank's policies and money laundering.
Both are advantageous to our ruling political and business elites, no matter the political stripe. Thus why nothing will change short of a full-fledged revolution.
Complain all you want, but no amount of yelling and screaming will change a thing.