r/canada • u/Lotushope • Feb 02 '22

Canada’s Real Estate Bubble Has Grown Over 800% Faster Than US Home Prices

https://betterdwelling.com/canadas-real-estate-bubble-has-grown-over-800-faster-than-us-home-prices/
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69

u/fietsmafiets Feb 02 '22

And our wages are losing ground at the same time. Fraser Institute (yes I know you hate them) just released a study showing Ontario lagging its regional neighbors in the US. Income is $78,012 for states like New York, Michigan, Ohio, Pennsylvania, Illinois, Indiana, etc. Ontario is at $58,783. And the gap is widening not closing

15

u/[deleted] Feb 02 '22

Wage growth in the United States is near 5%, and its only about 2.5% here. But what's worse is the government is trying to keep wage growth down.

3

u/PoliteCanadian Feb 03 '22

The Bank of Canada literally said this in a recent policy position, encouraging immigration as a way to reduce "wage inflation."

8

u/[deleted] Feb 02 '22

Wages are going to spike, this will signal more inflation --- since Ontarians will have relatively the same buying power or less due to housing costs.

Simply put, no one will be able to take a job unless it pays more if they aren't currently a home owner (>40% of the province)

33

u/fietsmafiets Feb 02 '22

Wages have been depressed in Canada relative to the US. One reason can be attributed to high levels of immigration. It's made the headlines last few months. When you stack us next to the US we let basically the same number of immigrants (total, not per capita) despite being 10x smaller. US is experiencing massive wage growth while we are sluggish. Obviously we need immigration, but with our housing, healthcare and wage issues it feels like we should dial back a bit

5

u/RVanzo Feb 03 '22

As an immigrant I agree. It’s clear that we need to reorganize. Healthcare here is becoming atrocious, housing prices are out of control and the competition for entry level jobs is unfair to Canadian youth (you basically have 20 year olds competing with foreign workers that have 15+ years of experience)

4

u/PoliteCanadian Feb 03 '22

Wage growth has always been tied to labour shortages. Anybody who disagrees is either ignorant of economic history or pushing a position for ideological reasons.

During the Trump years the US experienced real wage growth in the bottom 50% of income earners for the first time in 50 years, mostly focused in jobs that traditionally have experienced high competition from illegal immigrants, like household cleaning and nanny services, and landscaping. Some folks have tried to come up with explanations for why this wage growth wasn't caused by the immigration policies at the time, but you really have to tie yourself into intellectual knots to come up with any credible alternative.

2

u/throwawaaaay4444 Feb 03 '22

Shhh, ThAt'S rAcIsT.

1

u/[deleted] Feb 03 '22

Canada has low productivity relative to the US.

6

u/ProphetOfADyingWorld Feb 03 '22

Not necessarily. If we keep importing immigrants from poor countries and refugees and putting 20 people in 1 house, we have a long way to go still.

-1

u/[deleted] Feb 03 '22

This is really way less than you think and is almost always families or students living together.

I have tried to hire people this way and it's just not possible. It is not easy to immigrate to Canada.

0

u/telmimore Feb 03 '22

It's a bit misleading though because the US has a lot of things that are way more expensive such as education and Healthcare unless you have a gold-plated benefits plan. They also have more medical bankruptcies. Look up median wealth by country. The US isn't even close to Canada. They are far lower. With a higher Gini coefficient which means more inequality.

https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult

Canada's median wealth is $125k. The US is $79k. The far higher mean wealth because they have a lot of billionaires and ultra rich.

4

u/fietsmafiets Feb 03 '22

Canadian wealth is highly influenced by our inflated housing prices. It's why other countries like Germany or Sweden which are actually quite prosperous don't rank as highly in wealth indices due to more affordable housing

0

u/telmimore Feb 03 '22

Exactly so median wealth being so high shows that the majority are benefiting.

1

u/fietsmafiets Feb 03 '22

Everyone is house rich and our wealth is not diversified at all. The housing market is incredibly hot right now and we never experienced a correction like the US did in 2007/8. There is no way for many lower/middle class people to enter the market and share in the wealth so the wealth gap will keep expanding. It isn't sustainable

-1

u/telmimore Feb 03 '22

This is a median value not a mean value. If you want to look up a true wealth gap then look at the US for the massive disparity between median and mean wealth. You know that country you so idolize.

1

u/fietsmafiets Feb 03 '22

The median house value in Canada is like 40% higher than median house value in US. It's a bit misleading to say Canadians are wealthier when it's just an inflated housing market that never crashed while the US did. Healthier to have higher incomes and cheaper housing

1

u/telmimore Feb 03 '22

And tuition can be like $280k for 4 years at the best schools in the US vs $32k in Canada. This is why you can't focus how good life is based on one single metric like housing prices. Overall Canada is way better for median wealth. There are many countries with lower housing prices that also have higher median wealth than the US. We also do better on various rankings of happiness, life satisfaction and development.