Why is There a Housing Crisis in Canada?

Why Is There a Housing Crisis in Canada

Link to YouTube video>>> https://youtu.be/WxIHlLEK-jk

Introduction

Many people in Canada have set their sights on becoming homeowners. The ever-increasing cost of real estate may make it appear to be an impossible objective to reach. Several factors determine the cost of housing in Canada, and the cost of real estate in some Canadian cities is significantly higher than in other areas.

 

Even though many Canadians have credit ratings that meet the minimum requirements to buy a home, saving enough money for a down payment on a property whose value has practically doubled in the past few years can be challenging. It causes one to ponder: will prices be reduced? Why is it so difficult to locate suitable housing? Where can one find the best deals on housing?

Why are homes in Canada so much more expensive than those in the United States?

Comparing the cost of housing between Canada and the US reveals a notable disparity, with Canadian homes, on average, being 40% more expensive than their American counterparts. This price discrepancy can be attributed to many factors, encompassing various economic and market dynamics. Despite regional variations in both countries, the overall trend suggests that housing affordability remains a concern for many prospective buyers in Canada.

Supply and Demand

One of Canada’s most influential factors impacting housing prices is the classic interplay of supply and demand. With a growing population and migration toward urban centers, the demand for housing has surged. However, the rate of new housing construction has struggled to keep pace with this demand, leading to a limited housing supply in many regions. Consequently, a scarcity of available homes drives up competition among buyers, often resulting in bidding wars and allowing sellers to command higher prices in the real estate market.

Low-Interest Rates

Additionally, Canada’s historically low interest rates have played a significant role in driving up housing prices. For an extended period, the central bank maintained interest rates at near-zero levels, making borrowing more affordable for potential homebuyers. Lower borrowing costs incentivize individuals to enter the housing market, increasing overall demand. However, this surge in demand has led to an imbalance, with more buyers than sellers in the market, creating further upward pressure on housing prices.

 

In response to the surging housing prices, only recently has the Bank of Canada opted to raise interest rates. The central bank’s decision to increase rates aims to curb excessive borrowing and mitigate the impact of heightened demand on housing prices.

Immigration

Another significant driver of rising housing prices in Canada is the influx of foreign buyers, particularly from countries like China. Lured by Canada’s stable economy, attractive investment climate, and reputable education system, foreign investors have increasingly sought to capitalize on the Canadian real estate market. These investors often purchase properties to rent or sell at a profit, creating an additional layer of demand in the market. The appeal of Canadian real estate as an investment option, akin to investing in the stock market, further intensifies the competitive landscape.

 

To address the impact of foreign investment on housing affordability, certain regions in Canada have implemented measures such as foreign buyer taxes. These taxes deter non-resident buyers and ensure that housing remains more accessible to Canadian citizens. However, the influx of foreign money continues to be a driving force behind the increased difficulty for local buyers to enter the market, contributing to the surge in purchase and rental costs.

 

The discussion surrounding the reasons for the expensive housing market in Canada is widespread, with platforms like Reddit frequently hosting debates on the topic. While it is acknowledged that factors like supply and demand and foreign buyers are major contributors to the soaring prices, addressing these issues is a complex and time-consuming process. Policy interventions to rectify the housing affordability challenge often require careful consideration and implementation, and the results may take time to be evident.

Solutions to Rising Housing Costs

A new policy in Toronto that allows single-family homes to be transformed into low-rise multiplexes is being praised as a positive development by observers, although experts warn that it would not make housing more affordable in the long run. Why? 

 

The reason is plausible. The rising house prices directly affect inflation and the loss of purchasing power that comes with it. That means your dollar can no longer purchase what it could back in time. So the real solution lies in addressing that problem. 

Conclusion

In conclusion, the higher cost of housing in Canada compared to the US is a multifaceted issue influenced by supply-demand imbalances, low-interest rates, and the impact of foreign investment. As the Canadian government continues to explore strategies to tackle this challenge, it is evident that finding a sustainable solution will require a balanced approach that considers the complex interplay of various economic and market factors. The aim of addressing the underlying drivers is to create a more accessible and equitable housing market for Canadians, enhancing overall financial security and well-being.

 

PS.  Buy some gold and silver from Durham Precious Metals if you like this article

 

So you have decided to buy silver online.

Great choice. Let’s talk about silver.

Silver is exceptionally popular today. Part of the reason for this is the belief that it’s potential for upside value increase is even greater than the same belief in gold. In fact, there is a very good book on this subject entitled: “ Why Silver Will Outperform Gold by 400% in the coming years”. It’s a very scholarly book and quite convincing. Give it a read if you have the time.

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Mind you, one need not look as far as that book to find evidence of the common belief that silver has great potential for growth in the near future. All one has to do is go to the web or even Youtube and there are advocates of this thought at every turn.

At Durham Precious Metals we believe that silver is an easy choice because it gives a sense of substance due to its lower cost per ounce than gold.

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Probably 90% of our business is silver sales so this sentiment is fairly unanimous throughout the public. 10oz bars seem to be the most popular. Generic rounds and Silver Maples seem to be the next most popular and 1oz bars a close 4th place. It is our opinion that 10 oz bars and 1oz rounds are your best value as their premium over spot is very reasonable. However, there is no wrong choice when it comes to our silver product line because we try to concentrate on product lines with low premiums anyway.

Silver has always been a form of money. There are those that will argue that silver has been demonetized but we beg to differ. All one has to do is refer to the (CCRA) definition for 999 bullion. It is deemed by Rev Can to be a “ financial instrument”. Enough said on that subject!

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From a utility standpoint, silver has somewhere in the neighbourhood of 60,000 industrial uses including painting the backs of mirrors to create the reflective surface to collecting radiation in solar panels. If nothing else, the lack of an above ground supply of silver ( which is relatively new historically) will keep the demand for this metal strong since for most applications there is no viable substitute.

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Can you imagine the mayhem that would ensue if all the major electronic manufacturers came grinding to a halt due to a silver shortage? It would be catastrophic to the economy. We believe that this fact alone will be a major driver of support for the silver price when the powers that be run out of tricks in their attempt to suppress the price of silver. And yes, we agree that this practice goes on in plain sight and that the regulators turn a blind eye. Let’s hope justice prevails and that the historic silver/gold ratio returns to its traditional level.

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In the meantime…keep stacking!

So you have decided to buy gold online.

Great choice! Let’s talk about gold then, shall we?

Gold is, and always has been, a favorite of collectors of precious metals. Its 6000-year history of sustaining wealth is unprecedented. The yellow metal has launched wars, bought fortunes and has been a form of money throughout that history. It is one of the densest metals and also one of the densest elements on the periodic table. It weighs in at a density of 19.32 grams per cubic centimeter. Water, by contrast, has a density of 1 gram per cubic centimeter.

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Platinum is the densest of the common 4 precious metals at 21.45 grams per cubic centimeter.

People will often ask when gold is the right choice to buy as opposed to other metals such as silver. This is a very common question. There is no easy answer that anyone can give to someone so we always boil it down to practical applications.

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Consider how much of an investment you are planning to make over-all throughout the course of your precious metals buying.  If you are planning on purchasing, for example, $10,000 worth of metals and then cap your spending then it really doesn’t matter which metals you buy. The volume of the purchase will be relatively small in terms of weight and size. Our main concern and Durham Precious Metals comes down to simple things like , cost of storage, cost of shipping and bulk. We are always trying to help our customers have the best experience as metals collectors.

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For example, if you were to tell us that you are considering selling a piece of real estate and use the proceeds to buy metals then gold would be our suggestion. The reason comes down to volume and weight at this point. Several hundred thousand dollars of silver would be an incredible amount of bulk at this spend level. Hundreds of pounds of silver would be hard to store practically and would be more expensive to store as well. If you are the DIY type it would also be harder to hide than a comparable dollar amount of gold.

Keep in mind that at the time of this writing gold is about 75 times more expensive in dollar terms as the same weight of silver. That equates to 75 times less bulk per dollar spend. This will make it much easier to hide or store if you are looking at large purchase amounts.

Price of Gold?

If you are only considering a small total purchase amount either of the metals is perfectly fine. The one consideration we always emphasize for small purchase amounts really comes down to personal perception. Here is what we mean. Silver is 75 times more bulky per dollar spend. Obviously, it is going to feel a lot more substantial if you buy $5000 worth of silver and have several hundred ounces to admire than only about 3 ounces. It’s a perception thing at this point but perception matters to people since perception can make us feel a particular way about what we spend our money on.

In closing, gold and silver are both great choices and neither is wrong in terms of their value of utility. They have both had a long history as a store of wealth and that isn’t likely to change any time soon.

Buy both with confidence. Buy Gold Online

We often carry pieces that we don’t list on site so feel free to call us for an up-to-date list.

About DPM

When you consider silver value and gold value, the wise choice is to stock up today. At Durham Precious Metals we make it easy and convenient to buy silver and buy gold online.

For those who are serious about investing in gold and silver bullion, DPM is your one-stop store to buy gold and buy silver, whether it be through our website or our retail store.

Many people want to know where to buy gold and do not realize they can avoid the traffic hassle of driving into the city and visit us at DPM located in Oshawa, Ontario. See our Retail Store page for directions. Our customers are delighted with our competitive silver price. We carry mint direct silver bars, silver coins, gold bars and gold coins.

Make Durham Precious Metals your choice for gold and silver bullion.

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