A lot of rich common wealth Asians moved to Canada and created a similar situation x10. Then government created new laws to tax empty buildings.
Did it solve the housing issue? Not entirely, but it sure helped a bit.
Did it solve the housing issue? Not entirely, but it sure helped a bit.
How healthy and legit is an economy if this is the case? The same can be said of a Ponzi scheme, yes.
It seems that the change of the rules effects the current winners the most. And thus the unsustainable persists...until it doesn't.
Most of the people around here immediately buy something as soon as "they can afford it" - with credit. I find it hard to believe that these same people would suddenly hoard cash.
Wikipedia says
The Great Depression was regarded by some as a deflationary spiral.[35] A deflationary spiral is the modern macroeconomic version of the general glut controversy of the 19th century. Another related idea is Irving Fisher's theory that excess debt can cause a continuing deflation. Whether deflationary spirals can actually occur is controversial, with their possibility being disputed by freshwater economists (including the Chicago school of economics) and Austrian School economists.
It sounds more like a theoretical concern than an immutable law of nature to me.
No, it doesn't. [0]
> There is absolutely zero historic record to support that.
Yes, there is. [1]
> Until economics embraces reality it's foolish for the rest of us to hold a false god so high.
Sorry to be kinda blunt here, but I'd like to appeal to you to try to maintain a higher standard of discourse on HN.
Ironic. Your reply does more to support my point than your own.
Unless you are already rich, it makes sense to get a T1 and head off south to Seattle where the houses are still pricey but the salaries are much higher.
When China's bubble finally pops, it will be Japan 2.0+ for Vancouver.
Increased density allowances continue to prop up lot values on single family homes, which allows homeowners to not be underwater but also increase housing supply when they are torn down and duplexes/condos are built in place.
Overall I feel like most people are happy with the outcome thus far.
At the moment the high price of real estate is putting a lot of strain on almost every other sector of the economy: tourism (cheaper to visit other beautiful places like Banff), tech (it's expensive to attract talent with high cost of living), services (similar deal). It's also driven out a lot of younger families which can have delayed impacts on the economy.
On the other hand, it's been great for the construction industry, tax revenue, and infrastructure investment. The high price of land has also justified investments in density which will result in a lasting increase of land value even if the market cools.
There are also a lot of people who have sold their expensive homes and taken the money to cheaper areas, like Victoria and Nanaimo, distributing the windfall a bit.
Some will win some will lose and I have little sympathy for those who entered the market in the last 5 years expecting it to keep increasing as it has.
https://www.cbc.ca/news/canada/british-columbia/bc-finances-...
That being said, modulo some extreme reconfiguration of Canadian society, workers need someone to pay them. I think we should be _very_ cautious about unduly alienating capitalists in an indiscriminant manner.