Study says 48% of Canadians are 200 dollars or less away from insolvency.

[The Romulan Republic]

https://www.bnnbloomberg.ca/maxed-out-4 ... -1.1247336

The number of Canadians who are $200 or less away from financial insolvency every month has climbed to 48 per cent, up from 46 per cent in the previous quarter, in a sign of deteriorating financial stability for many people in the country, according to a new poll.

The survey, conducted by Ipsos for insolvency firm MNP Ltd. and released Monday, also found that 35 per cent of Canadians say an interest rate increase would move them towards bankruptcy, while 54 per cent said they worry about their ability to repay debts.

“Canadians appear to be maxed out with no real plan for paying back what they have borrowed,” said MNP President Grant Bazian in a release. “This raises many alarming questions about how and if consumer debt will be repaid, particularly if conditions deteriorate or interest rates rise.”

The Bank of Canada raised its benchmark lending rate three times last year, taking it to 1.75 per cent in October, but has since held rates steady. The central bank will announce its next interest rate decision Wednesday.

Despite the uncertainty in the economy, many Canadians continue to add to their debt loads. The MNP survey found that about four in 10 respondents said they won’t be able to cover all living and family expenses in the next 12 months without taking on more debt.

“This isn’t simply a matter of people living beyond their means. The reality is that too many households simply cannot make ends meet, however hard they try,” Bazian said.

According to the survey, insolvency concerns rose the most among Atlantic Canadians, with 55 per cent saying they are $200 or less away from the financial brink, a jump of 10 percentage points since MNP’s December survey. Quebec residents were second at 51 per cent, up five percentage points, followed by Ontarians at 48 per cent, up two points.

Ipsos, which conducts the quarterly poll for MNP, surveyed 2,070 Canadians online from March 13-24.

Up 2% since just last quarter. Lovely.

That doesn't bode well for the current government. Unfortunately, it looks like Canada is going to follow so many other countries down the road of voting for Right-wingers and blaming brown people, rather than blaming oligarchs and voting for democratic socialists like would make sense.

[mr friendly guy]

If I understand that correctly, if they needed to find $200 for an emergency, they won't go bankrupt but fall behind on their mortgage. Do Canadian banks allow for renegotiation? And how many months will they be allowed to fall behind on average?

[Solauren]

If I understand that correctly, if they needed to find $200 for an emergency, they won't go bankrupt but fall behind on their mortgage. Do Canadian banks allow for renegotiation? And how many months will they be allowed to fall behind on average?

Depends on the bank.

Also, most bank accounts have overdraft protection up to certain values. (Dependent on the bank, account type, house value, etc).

Now, given how fucking overpriced alot of houses are, I'm not surprised by this. People see 'oh, 3% mortgage,', and then go buy a house that is 5 - 10 times what they make in a year.

I once had a mortgage specialist recommend no more then 2 - 3 times your highest household income, even with low interest rates.
That was 15 years ago, and that's what my Dad was told back in the 1970s.

Now? 2 - 3 times is considered bare minimum.

[Jub]

Depends on the bank.

Also, most bank accounts have overdraft protection up to certain values. (Dependent on the bank, account type, house value, etc).

Now, given how fucking overpriced alot of houses are, I'm not surprised by this. People see 'oh, 3% mortgage,', and then go buy a house that is 5 - 10 times what they make in a year.

I once had a mortgage specialist recommend no more then 2 - 3 times your highest household income, even with low interest rates.
That was 15 years ago, and that's what my Dad was told back in the 1970s.

Now? 2 - 3 times is considered bare minimum.

That's not feasible in a lot of major cities given how fast housing costs have inflated compared to incomes. In Vancouver, the average price for a home is $1.7 million the prices are in decline at the moment so it's expected to bottom out at $1.4 million in a few years. Even at that 'low' price, you'd need to earn $500k per year to buy property here.

There's no fixing this either because in spite of new laws about overseas buyers the Chinese keep buying houses, which neither they nor anybody else will ever live in, as investments to resell to the next batch of Chinese buyers moving in. So what do you do give away income for nothing on legalized theft rent or roll the dice on a mortgage?

[Vendetta]

Depends on the bank.

Also, most bank accounts have overdraft protection up to certain values. (Dependent on the bank, account type, house value, etc).

Now, given how fucking overpriced alot of houses are, I'm not surprised by this. People see 'oh, 3% mortgage,', and then go buy a house that is 5 - 10 times what they make in a year.

I once had a mortgage specialist recommend no more then 2 - 3 times your highest household income, even with low interest rates.
That was 15 years ago, and that's what my Dad was told back in the 1970s.

Now? 2 - 3 times is considered bare minimum.

Although if the property market over there is anything like here, 2-3 times the median income will just about get you a converted garden shed.

[The Romulan Republic]

Depends on the bank.

Also, most bank accounts have overdraft protection up to certain values. (Dependent on the bank, account type, house value, etc).

Now, given how fucking overpriced alot of houses are, I'm not surprised by this. People see 'oh, 3% mortgage,', and then go buy a house that is 5 - 10 times what they make in a year.

I once had a mortgage specialist recommend no more then 2 - 3 times your highest household income, even with low interest rates.
That was 15 years ago, and that's what my Dad was told back in the 1970s.

Now? 2 - 3 times is considered bare minimum.

That's not feasible in a lot of major cities given how fast housing costs have inflated compared to incomes. In Vancouver, the average price for a home is $1.7 million the prices are in decline at the moment so it's expected to bottom out at $1.4 million in a few years. Even at that 'low' price, you'd need to earn $500k per year to buy property here.

There's no fixing this either because in spite of new laws about overseas buyers the Chinese keep buying houses, which neither they nor anybody else will ever live in, as investments to resell to the next batch of Chinese buyers moving in. So what do you do give away income for nothing on legalized theft rent or roll the dice on a mortgage?

Well yeah, the problem is much more complicated than just foreign buyers, of course.

I love the way you word that, though. "the Chinese keep buying houses". "The Chinese", as though an entire nationality is to blame.

The problem isn't nationality or race: its rich vs. poor. Rich people buy up homes and flip them for profit, reducing available housing and driving prices ever-higher. Rich people vote in politicians who won't build more low-income housing or pass basic income. Who cares where they're from? This is oligarchs vs the people, not born Chinese vs British Columbian. Race and nationality are distractions for the oligarchs' divide and conquer strategy, nothing more, just like they always have been.

[Ralin]

I love the way you word that, though. "the Chinese keep buying houses". "The Chinese", as though an entire nationality is to blame.

Or, you know...that it's a phenomenon that wealthy Chinese people are especially known for. It's not just in Vancouver. I mean I don't like to cite common knowledge, but by all accounts it's a common form of investment/speculation for mainland Chinese people with money to burn, including in China.

[The Romulan Republic]

I love the way you word that, though. "the Chinese keep buying houses". "The Chinese", as though an entire nationality is to blame.

Or, you know...that it's a phenomenon that wealthy Chinese people are especially known for. It's not just in Vancouver. I mean I don't like to cite common knowledge, but by all accounts it's a common form of investment/speculation for mainland Chinese people with money to burn, including in China.

Its the way he said it- "the Chinese keep buying houses", as though its the race/nationality that is to blame. Maybe not intended, but... nasty implications.

Plus, it really irritates me that with all the talk about affordable housing, arguably THE big issue in BC, seemingly the best that the Provincial government can come up with is a law targeting foreign buyers. Hell, I've pretty much cut ties with the Greens, after campaigning for them a couple years back and having friends who are Greens, because of their support for that law. It just feels like scapegoating so they can avoid putting the money into affordable housing and basic income.

[Jub]

Well yeah, the problem is much more complicated than just foreign buyers, of course.

I love the way you word that, though. "the Chinese keep buying houses". "The Chinese", as though an entire nationality is to blame.

The problem isn't nationality or race: its rich vs. poor. Rich people buy up homes and flip them for profit, reducing available housing and driving prices ever-higher. Rich people vote in politicians who won't build more low-income housing or pass basic income. Who cares where they're from? This is oligarchs vs the people, not born Chinese vs British Columbian. Race and nationality are distractions for the oligarchs' divide and conquer strategy, nothing more, just like they always have been.

Yes, class, wealth, wealth distribution via wages and housing subsidies are all core to the issue but those apply everywhere more or less equally. Even in an area with cheap plentiful land that land is only so inexpensive because it's undesired by a large enough percentage of people who could afford to buy it. The same goes for certain foods or brands and experiences being prestigious and expensive. It's kind of a no shit sherlock thing to even mention and my feeling is that it's more productive to address specific issues than to turn every economic debate into a broad discussion about wealth inequality and class warfare.

As for the Chinese, and to a lesser extent in Vancouver proper Indian foreign owner/investor issue. It's a pressure that applies to certain cities in a way that it doesn't apply to other cities. It's an issue that prompted changes to local laws specifically targeting foreign buyers; we can debate about if that was needed, racist, smoke and mirrors, all or none of the above in another thread if you wish. It's also an issue which has a proven effect, SFU’s Andrey Pavlov, professor of finance, cites the now defunct international investor's program (IIP)as the cause of at least 2.5% increase in inflation in housing prices in Chinese favored communities So even if it's not the main driver of out of control costs it contributes significantly to the problem.

You can say that they're being scapegoated all you like and, even if it's true, they're still a significant issue in markets such as Vancouver, London, San Francisco, etc. Given my financial situation, it should go without saying that I'd like to see a more multi-faceted approach to housing costs. I'd be in favor of rent controls, strictly enforced renter's rights, more enforcement against things like Air BnB, purpose-built affordable housing, increased wages, and maybe even something more draconian like a cap on how much extra value a property can gain over time but as I've said those are universal and common to all almost all cities so I chose to talk about a local issue.

[mr friendly guy]

Its not exactly esoteric knowledge that when the Chinese government institutes policies which are design to counter speculation and to limit the effect of bubbles, some Chinese just move their money elsewhere. They could potentially make money, and they could lose it, but I guess the idea is the economic effects would be more prominent in the country they are investing in rather than China itself. That being said, its one thing to say they are contributing to high prices, its another to say how much they are contributing.

I think even Vice or Vox reported about high Canadian property prices due to Chinese investors. One way to check whether Chinese investors are a main cause in Canada is to track the inflow of Chinese money with the rise in property prices. If prices were already shooting up, then Chinese investors are just adding fuel to an already big fire, rather than the major cause of the fire.

Fun fact, the Chinese investors causing inflated property prices meme has been going on here in Australia as well. Its designed to appeal to people with short memories. Really, really short memories. Those who have forgotten the mining boom before the GFC when property prices shot up before Chinese investors had the bright idea to invest in Australian property, where some Australians would buy so many properties they can't afford to pay for their own food, so they go to charity for food, reserved for you know, homeless people.

Another fun fact, during that time (mid 2000s) I believe in some of these economic threads, either J or Aerius also mentioned Canadian property prices had already gone up, and I don't recall the term Chinese investor being thrown into the mix.

Basically, I don't doubt foreign investors including the Chinese contribute to higher property prices via increase demand. As to how much, that I am very suspicious that they are just being used as scapegoats based on the above.

[Jub]

Basically, I don't doubt foreign investors including the Chinese contribute to higher property prices via increase demand. As to how much, that I am very suspicious that they are just being used as scapegoats based on the above.

For Vancouver specifically this article suggests that the IIP program alone was responsible for upwards of 2.5% inflation in some areas. So, according to SFU’s Andrey Pavlov, professor of finance, “The answer is, overwhelmingly, yes, absolutely, there is an effect.” He does caution that outside investment isn't the only factor listing low mortgage rates, low property taxes, burdensome development-permit processes, and infrastructure shortcomings as other significant factors. Other sources also place blame on property speculation in general as a major cause for inflation and, at least in Vancouver, 'Chinese Investor' is shorthand for 'Property Speculator'.

The other reason to bring up foreign investors is, unlike internal causes, it's fairly straightforward to draft a law which targets outside investors as a means of slowing inflation. This combined with things like empty home taxes is an easy popular way to make an impact on housing costs even if the impact only swings things to the tune of a 5% reduction in inflation for a period of time.

[Starglider]

The problem isn't nationality or race: its rich vs. poor.

No it isn't. Or rather, it isn't in the simplistic way you imagine.

Rich people buy up homes and flip them for profit, reducing available housing and driving prices ever-higher.

Flipping a house requires a buyer. The net change in housing stock is zero. The net change in housing quality is positive (excluding tacky rennovation show trends). The housing is not 'reduced'. Someone sold a house, someone bought a house. Is this getting through to you yet?

And no, flipping a house does not make it more likely to become a rental (generally it reduces yield essentially because rents are less elastic than prices) and rich people owning multiple homes they don't inhabit doesn't happen enough to have a significant impact on the statistics (outside of a few global hotspots where property is heavily used for money laundering).

Rich people vote in politicians who won't build more low-income housing

The bulk of opposition to housing development comes from the middle class, who largely stand to lose. If they're homeowners, more supply tends to depress the capital value of their existing property. If they're renters, it could reduce rents if it was equivalent property, but with various factors favouring luxury development leading to gentrification, an increase in rents is more likely. Both are vastly more likely to be situated next to an 'affordable housing' development than rich people's mansions. Rich people on the whole stand to gain from property development: they own the land that gets a massive appreciation when zoned for housing and sold to developers, they fund the developers themselves and capture profits from the sale of new housing, and to a large extent they buy the new stock and extract profit from renting it out.

pass basic income

Basic income would exacerbate the problem by (slightly) increasing rents & mortgage affordability.

This is oligarchs vs the people, not born Chinese vs British Columbian. Race and nationality are distractions for the oligarchs' divide and conquer strategy, nothing more, just like they always have been.

You have exactly two causes for every problem, 'oligarchs did it' and 'racists/fascists/deplorables did it'. That leaves you incapable of comprehending this issue, not coincidentally just like the majority of the population. The actual explanation is straightforward however. In order of importance: historically unprecedented access to leverage (cheap credit) has increased the amount people can pay, while cultural and industrial trends have re-concentrated demand into a smaller regions, and government regulation has increased the cost of building faster than construction industry productivity growth (recently very poor) can lower it. 'Oligarchs' are responsible in the indirect sense of putting lobby muscle behind loose lending standards and bank bailouts, but (virtually) everyone wants access to more and cheaper credit. They are just in denial of the fact that letting everone have this causes price inflation and ultimately an increase in the skim for banks, landlords and real estate brokers. Reducing mortgage max income multiples would bring down prices much faster and harder than any feasible attempt to increase supply or restrict trading: but of course the people who don't understand the problem don't see why they can't have cheap loans and most of the people who do understand the problem are exposed to a price crash and vote against it.

[Vendetta]

Rich people vote in politicians who won't build more low-income housing or pass basic income.

More cogently, rich peope funnel capital into lobbying and donation to make sure that their agenda is enacted in law no matter who actually gets voted for.


Of course, the real solution is to progressively remove the market from basic needs via, in the domain of housing, a combination of extremely strict rent and quality controls and expanding social housing to outcompete private landlords so that all can easily be housed.

[The Romulan Republic]

Rich people vote in politicians who won't build more low-income housing or pass basic income.

More cogently, rich peope funnel capital into lobbying and donation to make sure that their agenda is enacted in law no matter who actually gets voted for.

Can we not take this down the "BOTH SIDES! DEMOCRACY IS A SHAM!" route, please? That just legitimizes the worst elements by putting all politicians on a equal level, and ultimately gets fascists elected.

Of course, the real solution is to progressively remove the market from basic needs via, in the domain of housing, a combination of extremely strict rent and quality controls and expanding social housing to outcompete private landlords so that all can easily be housed.

That could be part of the solution, although directly investing in building more affordable/low-income housing would also help, as would incentivizing said construction (or even mandating in law that for ever condo for rich people that gets built, an equal or greater amount of low-income housing has to be built).

Basic Income would help ease financial pressure on the low-income as well, and is worth doing regardless for a myriad of reasons. I say we throw all these solutions at the problem, rather than looking for a single solve-all silver bullet.

[Vendetta]

Rich people vote in politicians who won't build more low-income housing or pass basic income.

More cogently, rich peope funnel capital into lobbying and donation to make sure that their agenda is enacted in law no matter who actually gets voted for.

Can we not take this down the "BOTH SIDES! DEMOCRACY IS A SHAM!" route, please? That just legitimizes the worst elements by putting all politicians on a equal level, and ultimately gets fascists elected.

The first step in fixing a problem is admitting you have a problem. In most western politics the problem is the easy access of capital to the levers of power, which means that even when populist demagogues get elected what actually gets enacted is what capital wants.

You can see that pretty strongly in the USA right now, where what has actually happened in law in Trump's tenure has actually been relatively mainstream conservatism, tax cuts for the rich, handouts to entrenched capital like coal and penalties for their competitors, and cuts in services for the rest.

Policy, especially in the US but also in the rest of the capitalist world, reflects the wants of the donor classes not the electorate. You can't fix that without dramatically overhauling the laws around political capital and campaigining (with real penalties, pissant five digit fines don't worry billionaires who want to, for instance, cheat campaigning laws in a nationwide referendum to produce a result they can financially benefit from. Perversion of the course of democracy should be one of the gravest crimes in any democracy.)

That could be part of the solution, although directly investing in building more affordable/low-income housing would also help, as would incentivizing said construction (or even mandating in law that for ever condo for rich people that gets built, an equal or greater amount of low-income housing has to be built).

Or just don't grant planning permission for new high value construction unless at least 100% of the social housing need is met in the borough. The rich can have their asset flips/russian money laundering pads after everyone elses needs are met, not before. If there's undeveloped land and someone wants to build something on it, they can do what's needed for everyone not what capital wants but can never possibly need because they already have more money than they could disperse in a lifetime.

(Also replace at least part of the tax system with a land value tax, where tax is levied against the undeveloped value of land itself, which inherently penalises non-development, and acts as part of a wealth based tax system).

[Jub]

I 100% agree with your stance on divorcing finances from politics.

Or just don't grant planning permission for new high value construction unless at least 100% of the social housing need is met in the borough. The rich can have their asset flips/russian money laundering pads after everyone elses needs are met, not before. If there's undeveloped land and someone wants to build something on it, they can do what's needed for everyone not what capital wants but can never possibly need because they already have more money than they could disperse in a lifetime.

(Also replace at least part of the tax system with a land value tax, where tax is levied against the undeveloped value of land itself, which inherently penalises non-development, and acts as part of a wealth based tax system).

I think that rather than a full-on ban on high-value developments a ratio of needs should be established annually with higher weights being placed on the scarcest commodities, such as low-income housing, rather than simply looking at demand which will always favor commercial and high-value construction.

[aerius]

Starglider is correct.

I find it hilarious that folks in this thread are advocating supply side economics to fix housing affordability. You know, the same thing that they declared was a total failure when Reagan tried it back in the 80s.

[Jub]

Starglider is correct.

I find it hilarious that folks in this thread are advocating supply side economics to fix housing affordability. You know, the same thing that they declared was a total failure when Reagan tried it back in the 80s.

You're of course correct, any supply-side fix is a short-term bandage at best because no matter how high density and low cost you build eventually a given area will be full. It's a useful tool though especially in areas with large numbers of single family homes with maybe a suite or two onsite instead of an apartment complex.

[Solauren]

Part of the problem is letting the builders setting how much the houses go for. They will always go for maximum profit.

I've seen the new houses north of where I live (Oshawa), and in terms of room size/yard size, they're crap compared to older houses.

Yet, they're going for 700k+
And this isn't resale, it's straight from the builder.

[K. A. Pital]

Flipping a house requires a buyer. The net change in housing stock is zero. The net change in housing quality is positive (excluding tacky rennovation show trends). The housing is not 'reduced'. Someone sold a house, someone bought a house. Is this getting through to you yet? And no, flipping a house does not make it more likely to become a rental (generally it reduces yield essentially because rents are less elastic than prices) and rich people owning multiple homes they don't inhabit doesn't happen enough to have a significant impact on the statistics (outside of a few global hotspots where property is heavily used for money laundering).

Flipping houses often makes them stand vacant for months as looking for a good buyer requires the property to be in pristine condition; so if we consider a temporal dimension as well, availability is reduced by speculation.

The bulk of opposition to housing development comes from the middle class, who largely stand to lose. If they're homeowners, more supply tends to depress the capital value of their existing property.

Owning a home (with no debts) often puts you into the dreaded 3% elite inside your own nation. What middle class lol.

If they're renters, it could reduce rents if it was equivalent property, but with various factors favouring luxury development leading to gentrification, an increase in rents is more likely. Both are vastly more likely to be situated next to an 'affordable housing' development than rich people's mansion

Renters opposing affordable housing development as opposed to rich fucker gentrification? You are in a parallel reality. We‘re like in Fringe.

Rich people on the whole stand to gain from property development: they own the land that gets a massive appreciation when zoned for housing and sold to developers, they fund the developers themselves and capture profits from the sale of new housing, and to a large extent they buy the new stock and extract profit from renting it out

.
Not if it crashes the price of their existing assets; and not if it is state-owned property rented out cheaply and perhaps even for lifetime lease. No rich fucker would be happy about such developments.

Basic income would exacerbate the problem by (slightly) increasing rents & mortgage affordability.

Basic income is a scheme to replace social security. I have not seen any bank eager to hand out loans to people on social support, so... *shrugs* Of course, solving capitalism with capitalism is not going to work, basic income will be eaten up by rentseekers and inflation very quickly.

You have exactly two causes for every problem, 'oligarchs did it' and 'racists/fascists/deplorables did it'. That leaves you incapable of comprehending this issue, not coincidentally just like the majority of the population. The actual explanation is straightforward however. In order of importance: historically unprecedented access to leverage (cheap credit) has increased the amount people can pay, while cultural and industrial trends have re-concentrated demand into a smaller regions, and government regulation has increased the cost of building faster than construction industry productivity growth (recently very poor) can lower it. 'Oligarchs' are responsible in the indirect sense of putting lobby muscle behind loose lending standards and bank bailouts, but (virtually) everyone wants access to more and cheaper credit. They are just in denial of the fact that letting everone have this causes price inflation and ultimately an increase in the skim for banks, landlords and real estate brokers. Reducing mortgage max income multiples would bring down prices much faster and harder than any feasible attempt to increase supply or restrict trading: but of course the people who don't understand the problem don't see why they can't have cheap loans and most of the people who do understand the problem are exposed to a price crash and vote against it.

The actual reality: most of the working classes are so poor that they cannot afford to buy housing without using credit and indebting themselves for life (and getting poorer by the years). Most of the working classes also fail credit checks so can only get very limited sums (like, median wages would get you very little, unless you can get credit without advance payments, like a 103% mortgage and stuff like that). Capitalists screw people over and out of basic necessities like housing.