Quote:
Originally Posted by CliffFletcher
But 83 per cent of young families still want to live in detached homes.
https://www.huffingtonpost.ca/2018/1...ip_a_23576914/
You would have a glut of condos, many sitting empty, while bidding wars continued on houses.
The great majority of homes bought by first time buyers today are heavily subsidized by parents. All of that boomer wealth is starting to be transferred to their children. If an extra $100k in downpayment is enough to ensure the grandkids won’t be raised in a condo, the bank of mom and dad will happily oblige.
https://www.theglobeandmail.com/opin...-is-under-way/
And recent efforts to stem foreign buyers from using Canadian real estate as a way to stash wealth are half-hearted and difficult to enforce. Taxes are imposed on properties sitting empty? Let a nephew or family acquaintance live rent-free in a $3 million property while they go to school. Problem solved.
If Canadian governments were really serious about cutting off foreign money in Canada’s real estate market, they would impose New Zealand’s restrictions on foreign ownership. But they won’t, because they aren’t. |
Firstly, a lot of the glut of condos is due to specific economic factors, many associated with Covid. In Calgary, you had a massive buildup followed by a prolonged oil industry slow down. In Vancouver, Covid has shut the border. Typically, international short-medium term residents and tourists form a large part of the downtown demand. Also, many people are working from home. This is all very temporary. Even then, in Vancouver, condo sales are already picking up. I actually watched it happen in real time as I was looking at places through December-March and putting in bids. First the houses went, then the townhouses, and then the bidders turned to condos.
A lot of people with families would choose to move to townhouses if they were still available. I'm not talking about a run down townhouse complex in the bad parts of Queensland. I'm talking about centrally located higher end units with 3-4 bedrooms. These are really perfect for most modern families. Many people don't want to spend their weekend dealing with the yard, and choose to have 0-2 kids. In a dual income family with children, time is at a premium. The priorities become time saved from commuting, and ease of access to facilities.
What Peter12 said about development is really correct for most markets in Canada. The municipalities control the permits and limit density. This creates artificial limits in supply. The quality units that are on the market skyrocket. Then the detached homes, due to their development potential, themselves skyrocket, no matter how run down.
There definitely downsides to density, but there are many to not having density. In fact, the main reason I won't move back to Calgary is the endless suburban sprawl. I appreciate the advantages of having your own yard, but for me, the disadvantages of that are profound. You're basically stuck with a commuting and car culture.
Also, based on my recent buying experience, foreign investment was a non-factor. Every showing I went to in Vancouver had between 30-50 showings, all local people in their 30-40s. Many had older parents with them, but I didn't see any lack of local demand.
I do 100% agree that we are seeing parents help out adult children, and it's typically a lot more than $100k.