!britishcolumbia@lemmy.ca
News, highlights and more relating to this great province!
hahahha, developers gettin bailed out again. Surprise!
Carney's implementation of his various govt spending sprees has been pretty crap. Eby's prolly just going along with it hoping it'll increase his dropping poll numbers. They're both a disappointment these days.
so we are bailing out all the construction moguls whose greed left them holding the bag?
If there are ever, ever real estate bagholders the entire system crumbles and Canada as a nation implodes. I wish I were being hyperbolic but eventually this system is going to break and it will be bedlam
Edit: maybe people are misunderstanding me here. Let them fail, fuck bailouts. But bailouts and handouts are what is going to happen until the bandaid fixes stop working and Canada's fake ass economy unravels since it was all built around speculation.
that's not true… if the "market" is to be believed, many people would buy those condos, just not at the current price
if the current bag holder (some company) takes a bath of these, so be it… the entire market would not collapse and I guarantee you the rest of the bag holders will adjust, if only temporarily
what seems to be happening here is that we buy these overpriced condos to sell them at a loss … the greedy companies keep fattening and we eat the market correction
History proves otherwise. Housing prices can come down significantly, and developers can go under, without it destroying the whole system.
What you generally need for that to happen, is high unemployment (leading to foreclosures), or developers going bankrupt on unsold, but constructed, condo stock piles (again, leading to foreclosures and forced sales).
You saw the start of it in Vancouver, with housing prices coming down the past few years -- and with developers finding increasingly 'creative' ways to bundle and sell their unsold stockpiles. Bailing out those developers just keeps housing unaffordable.
Like here, think of it this way: when you buy a home, you need 20% down payment these days. That means your property value could go down by as much as ~15% and the bank won't care. If you're in a forced sale position, the bank just needs to recoop its loan value -- so even on a new loan, they'd potentially accept 15% below market value if there were no other bids. All that can happen, with the bank/financial system being kept whole. So you "could" see real estate bagholders get fucked out of up to 15% yoy losses, basically, and the system would be fine.
Maybe you misunderstand what I meant by my comment. Im not supporting bailouts for developers or homeowners... Let them fail.
My concern is how something like a quarter of our GDP is involved in real estate development or speculation. Vancouver is overvalued by a factor of 3X as well, so prices would need to drop for more than a decade to slowly bring those prices back down to being affordable without subletting your single family home into a triple family home to afford the mortgage or causing complete chaos in the property market.
It's financially irresponsible to do anything productive with your money like own a business or invest locally... You buy real estate or invest in the US stock market. It's hollowed out our economy to just speculation since that's the most profitable... Every coffee shop, bar, bistro .etc that you like was financially irresponsible to spend money on. The owner would have made more money and profited more from spending that on NVIDIA or an apartment building.
What happens when prices continuously go down for an economy built entirely on prices being high? I can't even speculate on all of the ways shit breaks when that happens.