Goldtent TA Paradise

THE CANADIAN HOUSING BUBBLE

1. Homer says:

   January 22, 2023 - 8:55 pm at 8:55 pm

   Yes, it appears that home price increases in Canada have outpaced household income growth rates by a large margin since 1975.
   However, home prices have become even less affordable in the U.K. and the U.S. The above graph doesn’t reflect these facts.
   It all depends on how the data is presented and what time frame is used for the comparison.

   See this link with long-term charts (for U.S. and U.K.) of median home price divided by median household income below.
   https://www.longtermtrends.net/home-price-median-annual-income-ratio/
   – In the U.S., the median home price recently topped out at 7.75 times the median household income (versus 4.0 times for Canada)
   – In the U.K., the median home price is around 9 times the median household income (900%).
   It is interesting to look at this price ratio for the U.K. going back to 1950.

   • Homer says:

     January 22, 2023 - 9:10 pm at 9:10 pm

     Correction – The median home sales price in Canada is roughly 9.0 times the median household income, not 4.0 times. This is comparable to the U.K., but higher than the U.S.

     • pedro_deleon says:

       January 22, 2023 - 10:00 pm at 10:00 pm

       From a few years back, those ratios sound about right.

       The figures were MUCH higher for China, well over 20x. Maybe 30-40x.
       They put their savings into new homes, and leave them unoccupied.
       More or less.

2. Homer says:

   January 23, 2023 - 8:15 am at 8:15 am

   If you deduct all of the taxes and fees that middle class folks pay to local, state, and federal governments here in the U.S. and Canada, the picture is much worse.
   Median home price divided by median net available income after all taxes is close to 12x in the U.S. and maybe 15x in Canada.
   And this grim situation did not happen by accident… It was all planned.