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Comment by throw0101a | Hacker News Reader

If anyone wants to know about the last crash in Toronto in 1989:

> Once adjusted for inflation you can see the real scope of the Toronto housing bubble of 1980s. Only in 2010, or 21 years later, real average housing prices reached the peak of 1989.

* http://www.torontocondobubble.com/2013/02/toronto-housing-bu...

* https://betterdwelling.com/city/toronto/it-took-22-years-for...

It took ~7 years for prices to bottom out before starting to rise again.

Lately condo prices have been softening (supposedly due to Airbnbs folks offloading), but (semi-)detached houses are still going up. Rents have also been dropping due to Airbnbs giving up on 'short-term rentals' (read: mini-hotels) and switching to long-term rentals.

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What can we learn from that bubble to help us tell whether this one is close to bursting?

I don't think we can learn anything. The whole dynamic is different. Interest rates, BoC/FED Gov are too invested in keeping the market going to allow it to correct. People have stretched themselves to the limits with debt. Then you have incredible capital outflows from Asia just parking money in Canadian Real Estate.

For ever distressed Canadian sale, there will be 100's of billions of foreign $$$ waiting to snatch it up.

It is truly remarkable what a young Canadian faces today when it comes to enjoying what previous generations took for granted. A good job or career, a house or property, etc. It just isn't going to happen for the majority of them.

If this was really the case, wouldn't we expect large numbers of Canadian homes to be sitting empty? Or to have a rental market with high vacancy rates at the expense of a tight sales market? In Vancouver at least, we don't see either of those. But the population keeps exploding (2%/year for the metro area) and people keep protesting development. What's the most straight-forward explanation for this?

> For ever distressed Canadian sale, there will be 100's of billions of foreign $$$ waiting to snatch it up.

There seems to be a feeling that not enough is being done about money laundering, and that's not helping the real estate situation:

* https://betterdwelling.com/how-a-little-money-laundering-can...

Canada seems to be so popular what we have our own verb, "snow washing":

* https://en.wikipedia.org/wiki/Snow_washing

From A. Gary Shilling:

> Of course, you need to keep in mind that the stock market can remain irrational a lot longer than you can remain solvent.

* https://quoteinvestigator.com/2011/08/09/remain-solvent/

* https://en.wikipedia.org/wiki/Gary_Shilling

Don't treat your home as an "investment" is probably the best advice: simply a nice place in nice location that you want to spend the next decade or so, and move on with life.

Any gains you see financially will be decades down the road when (a) you don't have rent to pay after the mortgage is paid off†, or (b) you can no longer live independently and sell it to pay for an old-age home.

† But taxes and maintenance still exist.

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