Something has been irking me something fierce for years now, and I think it’s about time I wrote it down so people can better understand my disdain for the current ‘housing crisis’ ahem BULLSHIT. My disdain for the Real Estate industry is no secret, and my feeling of disgust for the Canadian government for allowing this to transpire is growing daily.
A few years back, we were bombarded by the first planned advancements of the real estate market and the beginning of the artificially inflated housing boom, an event that forever changed the way wealth and poverty were divided in Canada, especially in the Greater Toronto and Vancouver areas. This boom, a construct of those greed-driven individuals looking to profit off the backs of the less fortunate, was designed so they could use those backs as steps to gain more wealth. Forever dividing the classes based on equitable assets and the ability to accrue more assets with previously acquired assets, is flawed, very flawed. Keeping those without liquid assets from gaining any return on the hard work they endure, they simply live life like a drone bee, never able to really live. I’d like to preface that I am entirely fine with people working hard and gaining wealth, as long as it’s not done at the detriment of those they make money from. But it seems that’s exactly what's been happening the last several years, noticeably, out in the open, not even in private like it used to be done. It’s beginning to smell a lot like a Capitalist influence, and I don’t like it one little bit. During the beginning of this artificially inflated housing boom, we saw loads of for sale signs on owners lawns with “SOLD **% above asking” in a market where fair growth of property was 3-5% per year for eons. Now after the threat of the bubble popping, we see more unscrupulous Real Estate tactics surfacing in the way of listing houses well below today's expected market value so that bidding wars happen and they can market themselves as selling a house at 25%-??% above asking, shameful and imnmoral behavior. Lying in the listings to drive traffic in hopes that someone will believe their lies. Trying to perpetuate a system of marketing lies in the name of keeping the market profitable for them and those investing via investment firms. Are all Real Estate professionals money-hungry beasts with meat hooks for hands and the hearts of an Iceberg? No, and I’d never insinuate they are. But in a way, even if you feel you’re fair as an agent, you’re still allowing the lie to be perpetuated and continue to be guilty by association. Sorry, not sorry. Just as there are stand-up Police, there are also the bad apples that make the whole lot look bad. I guess for me it’s a matter of “If you’re not part of the solution, you’re part of the problem” type of thought process. I have family, friends, and associates who are in the Real Estate biz, and although I don’t agree with how business is conducted within the housing market, that doesn’t change how I see those individuals on a personal level. There’s still nothing but love there!
Since the early 70’s there have been many blips and peaks in the housing market, some significant enough to affect the Stock Exchange, some not so much, but never one that prevented an ‘average’ Canadian family of owning a home if they worked hard enough to get it. In the not-so-distant past, 10-15 years ago, It was a rare occurrence to see a house sell 5-10% above asking let alone the 25-40% higher than asking that some houses received once corporate investor influences started inflating the market. It’s not a matter of what people are ‘willing’ to pay any more, it’s a matter of people ‘having’ to pay what the market fixers designed the market to be, a price people have to pay for the actions of a handful of unscrupulous individuals making money for their investment firm clientele. Who’s at fault? Deregulation of the residential market allowing investment buys from deep-pocketed investment firms? The Government not stepping in and regulating the housing market before it got to this level, or possibly not opening up the housing trades enough to allow for growth? Maybe the untruthful Real Estate agencies? Us trusting fools who allowed this to happen? Who’s to blame? I’d personally say all of the above. See, we’re at a point in the Canadian continuum where if something isn’t done, and done soon, there will be a crisis of proportions unlike anything Canada has seen in it’s 155 year history. There are hundreds of thousands of families who bought homes at interest rates that were appealing but weren’t sustainable, inducing the probability of loss for a large proportion of those households once renewals became due at interest rates well above the lender's stress test guidelines. This error by the banking industry will cause a major shift in wealth distribution as those same houses that were lost by a good hard working family, will now be scooped up by investors when the “lenders” need to recoup some of their investment. What’s worse is that the Canadian government again changed regulations and allowed lenders to extend amortization lengths to unrealistic terms so that the market wouldn’t immediately crash… just another band-aid. Good job ya knob heeds, well done indeed. There are currently hoards of investment condos in the GTA with renters in them, where the investors are losing money on them, just to keep them. As the purpose of investing is designed to hopefully make money, it becomes counter-intuitive to continue to pour money into investments you’re not getting returns on. Many of these condos will be desperately sold, but in a market where the “Average” person will never get a broker to approve them, it may be a double-edged sword of sorts. Where are these people going to go? With the last Bank of Canada adjustment only coming in at 25 basis points of an expected 50, it’s very likely the next adjustment will follow suit, or increase by another 25 basis points to a 50 basis point adjustment, or .25-.5% if you prefer. With these continued increases in interest rates, while designed to curb spending, they do not take into consideration that they will only hurt the small guy looking to buy his family of four a forever home, or a family just trying to keep their forever home once renewals become due. Corporate interest will still have pockets deep enough to continue to drive the market to unreachable plateaus, that won’t change unless we do something about it. With the average house in Toronto currently listing at $1.14 million dollars, with a good percentage selling above that, it’s unfair to assume that the ‘AVERAGE” family can afford to carry that expense when the median household income in Ontario is around $92K. With 46% above the median still making less than $250,000 per household, meaning the wealth and ability to buy properties is being held by the top 4-5% of Ontarians. Those families not holding any leverage in the way of liquid assets will continue to be denied the right to a home of their own, and will be forced to pay rent in a market where rent is often higher than a mortgage would be.
How did we let it go this far? Because, municipal, provincial and federal taxation makes lots of money for the lazy tarts sitting in the House of commons. It’s easier to allow a market to fluctuate out of hand in the name of recovering taxation, rather than trying to fix why the economy is so broke in the first place. It’s easier to allow corporate ingress, and accept their infiltration into a market they have no moral business being in, than it is to lose those same corporate influences' support from a political perspective. Because the unscrupulous Real estate industry took it upon themselves to take advantage of a very unrealistic market in the name of profits. The Real Estate industry is the only industry that bases its commission on the value of the estates. And let's be honest, most Real Estate professionals don’t do a hell of a lot to earn the percentages they are receiving. Houses sell themselves, an agent can never tell me they sold the house, it’s simply a veil they use to ensure people see value in their services. Real Estate commissions should be a standardized amount and not an amount based on the value of the home being sold. Because of this greed-driven artifact, the market will continue down the road to ruin as many agents and agencies push for higher bids in an attempt to make as much profit for themselves as they can. Let's not be daft here, if you think your agent is driving up the price of your property for your benefit then I have some land in the Florida Everglades I’d like to offer you. It’s all about profit margins and the desire to make as much as they can off the commission they receive from your estate. Take that to the bank!
So how do we fix this major screw-up by the Canadian government and the Real Estate industry as a whole? Do we create legislation preventing Corporate investment in the residential markets? Tax investment properties highly enough to curb nonprimary residential purchases? Make it mandatory to be born in Canada to own a house, not unlike Switzerland, China, and a couple of other countries I believe? How do we fix this? Or has this gone too far to mend? Who’s taking accountability into consideration here? We need to stand up as a country and start reforming Canada into a country that we can be proud of, and stop messing with a market where it will be detrimental to every Canadian and future Canadian lives. I’m personally fed up with the lies and veils of secrecy involved in the housing market. I’m tired of being told by real estate professionals and politicians alike that this is normal growth and that people will pay what they are willing to pay for a property of their own. I call a big stinking pile of horse shit on those lies. I and my family have to move because my landlord can’t afford to carry the property we live in, so he’s liquidating this asset. This leaves my family in a position of very unsure circumstances. We have personally become a victim of the housing crisis and from this side of the fence, I’d say it isn’t pleasant at all. We, like many Canadian families currently living in the inflationary climate are stuck with a limited budget to live on. We can’t afford to pay the rent being asked because you’re paying for someone else's investment and they can’t lose money and are in a position where our hard-earned income is being utilized by someone else whose interests in the home don’t sway past the “Investment/Profit” realm. We pay enough rent that it’s unrealistic for us to continue to pay high rent without considering purchasing a home. But in todays climate it’s not only cost prohibitive, it’s very hard to get approved for a mortgage unless you have prior liquid assets or a co-signer/guarantor involved. We have a slated 500,000 immigrants ready to call Canada home in the upcoming year, in a climate where Canadian born residents cannot afford the current prices being offered on existing properties. And with all of Canada currently producing less than 250,000 new homes nationwide a year, where are we putting these people once they arrive, and how will that affect the current residents of Canada in their ability to buy a home? Another governmental band-aid perhaps? It’s a sick joke and I’m so done with laughing. Lets get one thing straight, politicians lie, as do the majority of the Real Estate industry. I wouldn’t piss on a politician or agent if they were on fire. You can believe that!
A very disgruntled and disappointed Canadian I am, and I have every right to feel the way I do about the current state of things in Canada. I no longer love Canada as I used to, and feel the country I once loved devoutly has let me and my family down. It’s time for the government to reassess their game plan and start taking accountability for the mess they’ve made with our country. I point a finger at our political and real estate system and wholeheartedly say “Shame on you, shame on you for allowing this to happen, and for continuing to perpetuate a lie in the name of profits”. You’re a filthy bunch, dirty as dirty gets. The Beer Did one out.