Greed. And the genuine belief that “the world is not enough”

1. Land is scarce where people want to live, it’s always going to get more expensive as more people want to live there.
2. Low interest rates caused large investment firms to seek higher rates by being rental owners instead of mortgage owners. This forced up rent to make returns on investment. As the realities of being a landlord are realized this might get better.
3. New building nationally wasn’t keeping pace pre covid, but it was by a negligible amount. Post covid, new building is years behind where it needs to be.
4. High interest rates now has effectively got people stuck in existing homes, because a new mortgage would be double the payment.
5. Inflation happened, 20% of the increase since 2020 is just inflation.
6. Short term rentals have devasted the residential market in popular tourist areas, forcing them to charge hotel taxes and follow those regulations is hopefully going to start correcting this.

Land is the only commodity that’s actual worth anything, perpetually.

Because population is increasing faster than new housing is being built. There is a supply problem and demand is in elastic. The supply problem is the result of government’s continual suppression of new construction, via permitting red tape and overeager density zoning.

The biggest reason that is often overlooked is wealth inequality. The rich keep accumulating wealth, and real estate is a scarce form of wealth that holds value, produces a return, and can be accumulated. It probably accelerated recently because of the large amount of money that was dumped into the system around covid; that was yet another opportunity for the wealthy to grab a bigger share of the pie.

If things keep going this way, we’re going to get into a situation where regular people don’t own houses anymore, and rent is a much larger percentage of your income.

Artificial restriction of supply þrough ð purchasing of properties on speculation by landlords and hedgefunds for ð explicit purpose of cashing in on ðem eiðer as rental properties or as property flips.

Ðere are more empty units ðan ðere are unhoused people. In any oðer market ðat would be called an excess in supply and precipitate a drop in prices.

The commercial real estate market has taken a big hit since COVID and RTO is generally unpopular. In North America this has led to a shift to buying residential housing for rental or resale.

I remember back before 2020 there was tons of mountain and cabins and homes and stuff like that anywhere from 2:50 to 500K. Now you won’t find a single one less than 800k…

WFH and good satellite internet were a bit of a game changer here. You could now live in a remote place and work a job with a high income.

Regular homes are just as bad. I’m seeing homes in my area that sold for around $200 to 300K in 2019, now they are 500k and above.

Supply and demand here. There aren’t enough houses being build for people (and private investors) that want to buy them. The price rises.

I don’t understand how this makes any sense? Salaries were not doubled, but somehow the price of all homes are now twice as much.

Lots to unpack with this one. First, some people’s salaries were doubled. There has been some niche sectors of industry that have seen large year over year increases in income, specifically some STEM fields. Second, housing price rises are not linear across all pricepoints. The cheaper house are going up significantly faster than more expensive homes. Why? Because there are more people shopping at the lower pricepoints. When we bought our new-to-us house a few years ago buying a house $150k more expensive than the house were were living in got us very little more house. However, buying a house $250k more expensive got a lot more house (larger, better neighborhood, more outside space, etc).

Crime.

Investors.

China’s entire modern “economic miracle” is founded on housing as an investment vehicle.

You can in part blame Canadian Conservatives in BC, specifically Bill Vanderzam, Christy Clark, as well as federally, Brian Mulroney and Stephen Harper, for importing this behaviour and concept from Asia and its rise here. Initially in the late 1980s and early 1990s it was about attracting the elite of Hong Kong, who were afraid of what the handover of Hong Kong to the CCP would mean. (And rightly so, as it turns out.)

Vancouver BC is infamously unaffordable, and its entirely because of investors, both national and international using its real estate as a ridiculously effective investment vehicle. If you had purchased a home in the suburbs for 500k in 2006, that home would be worth well over 2 million dollars today.

When Vancouver started capping out and hitting limits investors moved on to apply the same practices all over the continent.

I feel the main reason is corporate entry into the market. Foreign and domestic. The ROI is larger on real estate than any other investment.

Because houses past your primary residence are not taxed enough. Houses you own should be taxed at an exponential rate. Primary residence means you live there >80pct of the year.

The answer is very location dependent, and often multifaceted. However here in Canada it’s a combination of neglecting affordable housing construction for decades, a huge uptick in immigration raising demand in some areas, a total lack of political willpower (most of our MPs report housing income, many actual landlords), and an economy that’s over-leveraged on real estate in general.

I stayed at an Airbnb

Nothing funnier than source of the problem complaining about the problem :D

Think of inflation from monetary policy like lead in the environment. It takes time, but it all eventually ends up in the bones. Real property are those bones. 13 trillion dollars were ‘created’ during covid. Inflation (which i don’t think is necessarily the right word to use, because it implies it can go backwards), takes time to get “into” the price of products, but products that transact faster, inflate faster. Property “inflates” on a relatively long time horizon, but its often very substantial appearing jumps because the transaction cycle is so long (typically 10+ years between transactions).

So maybe you’ve not bought a home, but try not to think about things in the absolute value of their price-tag, but rather in the monthly cost of the money to make the payments on the debt. At 2.5% interest, lots of people can afford a 500k house. At 6% interest far fewer can. If the seller re-financed at less than inflation, its literally more “profitable” to just pay the mortgage than to sell.

I see some others blaming air-bnb’s. There is very little evidence for this. A few papers have found significant correlations, but the effect is so small relative to inflation that we should probably ignore it, and most of these papers are from a pre-inflationary period. Orders of magnitude more impactful is the fact that so many home owners were able to either purchase or re-finance at an extremely low rate in 2020/2021. Blaming Air-bnb’s and ignoring the broader macro-environment in which all property sit is just extraordinarily lazy, reactionary thinking. Air-bnb’s represent a microscopic number of actual rentals, and have been dropping in numbers for years.