Chinese Media Is Now Warning Canada’s Housing Crash Will Be Worse Than The US
There's been a lot of ink spilled lately about Canadian real estate and foreign (largely Chinese) ownership of Canadian property, and its effect on the Canadian housing bubble. There was recently a thread here in the Canada group about the homeless came in Victoria: http://www.democraticunderground.com/10875877
and The Walrus recently had an article about how our hesitance to "blame" Chinese investors for pricing working Canadians out of the housing market is hurting the poor here at home: https://thewalrus.ca/how-political-correctness-is-hurting-the-poor/
But Better Dwelling went to Chinese media (yes, it's state sponsored, take with a grain of salt) who claim that our housing crash will be worse than the US. A potentially big chunk of this sort of information is designed to keep Chinese capital in China. But here's the article: https://betterdwelling.com/city/vancouver/chinese-media-now-warning-canadas-housing-crash-will-worse-us/
And some exerpts:
We’re always curious to know how other countries interpret our statistics, political climate and what outside media is reporting about Canada’s economy. Since China has been a hot button subject in Canadian news recently, we thought it was high time we took a look at how Canada is portrayed in China’s State regulated media. While the Chinese media does acknowledge that Chinese buyers are a contributing factor to our prices – and admit they have been capitalizing on it – they also point out some interesting observations that our media has failed to cover. Here are the most interesting points we found from three major Chinese publications.
Hexun, China’s largest finance portal, recently published an article pointing to Canada’s debt fueled economy. They noted that Canadians have the largest debt-to-income ratio of any G7 country, with the average spending 165% of their salary. To contrast, at the height of the US housing crisis in 2008, Americans carried what was then considered an outlandish 147% debt-to-income ratio – 17 points lower than where we currently sit. Canada’s total household debt reached $1.892 trillion dollars, with $1.234 trillion dollars of that as mortgage debt – roughly 65% more than we make per year. To put that 1.82 trillion dollars into perspective, we could have run the US government for 8 months with that amount of money.
Sina.com’s real estate partner, and NYSE listed Leju was quick to point out that while the average home price in Vancouver is up more than 30%, the province is in a state of “stagflation.” Stagflation is a fancy word that describes when the cost of living increases but there is stagnant demand in the economy. They go on to say BC has one of the lowest median incomes in the country, and the BC government is hoping rising home prices will “render some good”.
While they didn’t put statistics to those statements, we recently published an article that showed Vancouver’s home prices have risen 172% in the last 15 years, while income has only moved up 10%. The struggle in VanCity is real.
The article seems a little threadbare on facts, to me, but one thing stood out to me as being straight up wrong. It says:
other cities like Toronto, that have substantially more international buyers, are not having discussions about “vacancy taxes” and “restrictions”.
But that's not true. I've heard this bandied about a little around City Hall, though mostly it is being denounced by folks like Tory as a non-starter. It has been brought up, though.
Anyway... I don't really have a horse in this race. I don't see my way ever being clear of renting at this point in my life, but we'll see what happens, I suppose. I've got some friends who are looking to buy houses. I've also got some friends who work in Toronto, but have bought homes in Mississauga and Hamilton because there are no houses that you can afford in Toronto proper anywhere.
Food for thought.
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