GTA/Vancouver housing market: The unfortunate co-relation with Crypto and what Canadians can do about it.

Before I go on this rant, I acknowledge that the folks at BoC are much smarter than I am and probably know better but this is my opinion as a Canadian genuinely concerned about the housing market that has exploded ( Ex. YOY, +30% YOY Durham, +20% most regions) with helicopter money. My primary concern is, do we really want our homes to be financial instruments and highly speculative assets as opposed to homes where families thrive? This is my opinion against my own financial interests as I had to position myself early and I understand some of the drivers are global in nature and unfortunate instruments of our financilized system induced with cheap credit.

Unfortunately, the recent explosion in the GTA & Vancouver areas as TREB goes past $1M for an average house impacts most millennial and future generational livelihoods negatively. I believe houses shouldn’t be traded as bitcoin like assets where there is limited co-relation between traditional fundamentals such as household income, rental income, cap rates, property taxes. I argue that tax paying Canadians including those with modest incomes should benefit more from the real estate boom as opposed to flippers, speculators or those who can just park the $$ in Canadian housing market. I think genuine real estate agents and long term real estate investors agree with me on this that they would much rather see a larger pool of tenants/clients succeed in their lives in the long term as opposed to an unsustainable future.

Here is what I would recommend to give Canadians a better chance to build a home, build neighborhoods and secure livelihoods that isn’t obsessed with housing. Some of them are big, not sure if it’s feasible but its to be a balancing act to stimulate and suppress demand

Suppress Demand in hot spots:

· Phase out principal tax exemption and phase in mortgage tax deductions for Canadians

· Provinces need to work with municipalities to increase property taxes that would fund neighborhood schools and parks with mandate that provinces reduce personal income taxes.

· Get rid of archaic zoning laws where relevant that allow greater supply of housing which aren’t condos and can actually accommodate a proper home office

· Decentralize further to create quality public and private sector jobs outside of the GTA

· Introduce lower amortization periods ex. 20 for speculative investors in the residential market

Stimulate Demand in Targeted Areas:

· Introduce 30-year amortization for first time home buyers

· Publish ongoing modest tax credits for home owners

· Determine other areas (trading zones) or industries where certain real estate investors can park money and get returns that serve our national interests better

· Diverse Immigration initiatives across different sectors (high skill and skilled trades)

· Affordable housing initiatives

Monetary Policy — BoC / Feds should not undercount housing costs in inflation measures and should include affordable housing as part of their strategy. Most of this speculative behavior is due to BoC printing money and offering cheap credit as their “independent” policies are just not working for average Canadians.

Just my thoughts, not sure any will be implemented as housing is one of the only industries that is actually working as a financial instrument for Canada. If you cannot change or convince them, eventually you’ll have to figure out a way to join them and enjoy the party.