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Comment by RandyRanderson | Hacker News Reader

The Canadian economy is almost entirely dependent on real estate[0][1]. It's almost a certainty that the Liberal government would never hurt that sector in any meaningful way. I'm guessing that they're run the numbers and they know this won't have any real effect (other than political points scoring).

Most of the RE demand comes from immigration (in CA, currently more than 1%/year) - look at any country that has high immigration and you'll see huge appreciation in RE (CA, AU, NZ, etc).

You will also see a huge decline in birth rates in those same countries.

[0] https://en.wikipedia.org/wiki/Economy_of_Canada#Key_industri... [1] https://betterdwelling.com/canadas-economy-hits-a-new-record...

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It's fine for demand to go up as long as supply can keep up -- which unfortunately hasn't for decades thanks to NIMBYs

https://financialpost.com/news/economy/ontario-alberta-and-m...

https://www.livabl.com/2021/05/canada-housing-market-most-un...

Look at any satellite or aerial view of Vancouver or Toronto and it's basically all SFH

https://www.reddit.com/r/toronto/comments/twj89s/yonge_st_fr...

Everyone's got their pet theory on what's behind Canada's housing crisis. In reality it's probably a combination of different factors.

The NIMBY theory is probably part of it, but definitely not the full story. For one, Toronto and Vancouver's population density is on par with major european cities (Toronto is about the same as Berlin, and Vancouver same as London). Arguably most european cities have similar affordability problems, but if NIMBYism is an issue, it's not particular to Canadian cities.

My pet theory is it all comes down to money supply. All that money generated out of nothing through quantitative easing over the last decade+ had to end up somewhere, and it's settled in real estate and equities. If that's the case, then the end of QE and "balance sheet pruning" is going to put a stop to this... and likely pop a giant bubble in the process. That's a scary prospect for countries like Canada and New Zealand, where RE has played such a huge part in inflating wealth.

I agree NIMBY is definitely not a Canada-exclusive thing. I would say that it's far more prevalent in western countries.

Japan's zoning laws are at the federal level so despite growing population in Tokyo metro, they have comparatively less affordability issues. It's crazy (as a Canadian) to think that Tokyo's central wards have roughly 3x the population and same land area as Toronto but are still able to have sub $1 million detached homes.

I live in a small-mid sized city in Ontario. The biggest issue with our lack of housing is a hugely corrupt local government that has introduced a TON of extra fines and red tape to the building process. Plus there's a tremendous amount of "I'll scratch your back, you scratch mine" with the local building companies (of which there are functionally two). This all means that it's prohibitively difficult and expensive for any new developers to enter the scene and the best margins exist in the $500k+ range for new houses. It's a nightmare.

"Canadian economy is almost entirely dependent on real estate"

This is a myth, real estate makes no contribution to (ironically) the Real Economy.

Think about it, if rents in London double, then the % of GDP in real estate doubles! Everyone's life has just gotten worse because they have to earn money elsewhere and pump it into real estate whether they like it or not.

The greater is your housing shortage, the more the people are suffering, the greater is the share of realestate in the economy.

It affects you negatively even if you own a house, you pay someone's rent every time you need a plumber or buy a coffee.

The housing shortage is a giant vampire squid sucking the first world dry. i am not a PhD economist, but institutional investors are definately contributing to the problem.

Currently, more than 10 per cent of Canada’s GDP is derived from residential real estate activity: renovations, ownership transfer costs and real estate commissions. [1]

[1] https://nationalpost.com/news/canada/canadas-unhinged-housin...

Is 10% == "almost entirely"?

Jun 2021: Canada Is Now 50% More Dependent On Housing Than The US At Peak Bubble:

https://betterdwelling.com/canada-is-now-50-more-dependent-o...

The S&P was flat for 6 years following 2007 in the US. Doesn't seem like a good path to follow.

Renovations are actually a tangible benefit, while ownership transfer costs and real estate fees are more of an indicator of high liquidity, but they don't actually provide value for people seeking housing.

> The Canadian economy is almost entirely dependent on real estate[0][1].

Umm your link says real-estate is 13%. How can you justify calling that "almost entirely dependent".

I would agree Real-estate in Canada s too large for Canada's own good

That, or, like in the old country, the law to be passed will have built-in exceptions or riders that will be exploited on arrival. It is possible that I have become a little too cynical, but even if I thought it was a good idea ( I don't ), I just don't see it actually happen.

People with money will find a way in; like they always do.

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