Defunding the state to deliver higher profits to the housing industry? Why not! - ThreadSky

nolore.bsky.social • 3 days ago

Defunding the state to deliver higher profits to the housing industry? Why not!

In Edmonton, Prime Minister Mark Carney announces that his government will eliminate the GST on all new homes under $1 million for first time home buyers, which he says will "provide up tp $50,000 in savings for families entering the housing market."

#cdnpoli

Comments

rjsummers.bsky.social•3 days ago

That’s not how this works. If developers could just add $50,000 to each house, they wouldn’t need an announcement like this to do so. Home purchasers are very price sensitive and home sellers have to compete with one another and selling quickly is very important.

stevemar1976.bsky.social•3 days ago

There will be many families living in 1-2 bedroom condos for the foreseeable future.

knockoutpanda.bsky.social•3 days ago

I am guessing that economist that writes about housing in Canada will love this.

nolore.bsky.social•3 days ago

I'm only listening to what @ricardotranjan.bsky.social thinks about housing.

knockoutpanda.bsky.social•3 days ago

Thanks for the recommendation find so many "economists" are very short sighted.

knockoutpanda.bsky.social•3 days ago

I guess he is mad the developers don't all get to take advantage because supply can only come for those poor hard up developers.

nolore.bsky.social•3 days ago

damn this sucks.

poliscirish.bsky.social•3 days ago

It hasn't even officially started, and I'm already so very tired.

planetjackanapes.bsky.social•3 days ago

The price of every $1MM home just went up $50k. Weeeee!

barrhavenist.bsky.social•3 days ago

Every developer just got a $50,000 grant for every million dollar build

carlmarxman.bsky.social•3 days ago

yaaaaaay

thetrashheap.bsky.social•3 days ago

More juice for the housing market

This country....

devindignam.bsky.social•3 days ago

Not only that, but if this worked, it would increase demand for housing which would...wait for it...increase housing prices.

Exactly wrong policy...almost like it's intentional 🤔

rjsummers.bsky.social•3 days ago

You may want to go back to Econ 101 and relearn supply and demand curves.

devindignam.bsky.social•3 days ago

Remove the tax – cost of housing reduced temporarily

Reduced house price – more are interested in buying a house, demand goes up

Demand goes up – due to increased demand, sellers price housing higher

That's the best case scenario. Oh, and tax revenue declines

They don't teach this in Econ 101?

rjsummers.bsky.social•3 days ago

Devin, I teach this in a fourth year university class on urban economics. You are making a common error of confusing demand and quantity demanded. If you are sincerely interested in understanding do a search for that (demand vs quantity demanded). A conversation with chat GPT could help too.

devindignam.bsky.social•3 days ago

I'm not using an econ definition of the word "demand", I'm using a layperson definition.

It seems like you are being pedantic. Do I have to reword it for you? Does it affect your understanding of what I'm saying? Do you disagree with what I'm saying?

Let's ask ChatGPT, shall we?

rjsummers.bsky.social•3 days ago

No, I am not being pedantic, I was quite honestly seeking to help you learn something if you were sincerely curious. The terms I used were there to help you find the sources that would help.

deanthesavage.bsky.social•3 days ago

Devil's advocate here, it's for first time buyers. It's a bit different from the gift Ford gave developers here in Ontario as it's on the consumer end.

jahagi8389.bsky.social•3 days ago

i expected the liberals' "affordable housing" to be dogshit and somehow i am still disappointed

goosethegander.bsky.social•3 days ago

They need to build more houses, so I'm not seeing the gratuitous issue here.

nolore.bsky.social•3 days ago

If they need to build more houses we shouls be asking why the government isn't building any houses.

goosethegander.bsky.social•3 days ago

I scrolled through some responses, and I see the issue. I naïvely believed that waiving the GST would mean it would save home buyers money. All it will do is incentivize contractors to make the difference up on their end. How do we get more homes built then?

rjsummers.bsky.social•3 days ago

No, you were correct initially. Home sellers exist in a very competitive market and buyers are very price sensitive. All sellers would love to hold on the extra $50k, but they won’t be able to, because some of their competitors will not increase prices.

nolore.bsky.social•3 days ago

The feds need to build housing and take profit out of each step of the equation. We have done it before and built hundreds of thousands of units!

its.small.patatas.ca•3 days ago

But to do big, bold stuff like that, he'd have to admit that governments do not need to eliminate deficits, a truth that I'm pretty sure he's severely allergic to

wuhanclams.bsky.social•3 days ago

This won't get more houses built, developers are just going to factor this in when they figure out how much to sell houses for.

wuhanclams.bsky.social•3 days ago

(I say houses, in Vancouver this is more like a small apartment).

adamboyce.bsky.social•3 days ago

Surely they wouldn't just raise the price and pocket the difference?

rjsummers.bsky.social•3 days ago

Why don’t they just add $50,000 to the price of each house now if they can just do that?

adamboyce.bsky.social•3 days ago

Because the market has proven it will pay current prices from their perspective, so they have a reason to keep the price at that level until a competitor gets higher.

Cut GST, you've created a gap of $50k they already perceive consumers as willing to meet.

rjsummers.bsky.social•3 days ago

Potential buyers can buy from any provider. The speed of sale is very important in home selling. If every supplier starts by raising prices $50k, one savvy seller will only go up $35k. Others will be forced to follow suit or end up stuck with stock sitting.

rjsummers.bsky.social•3 days ago

And so on and so on. There is no evidence of successful collusion in most markets in Canada and the price of housing is set by supply and demand.

rjsummers.bsky.social•3 days ago

The key factor behind excessively high housing costs in some Canadian markets is restrictive zoning and bureaucratic processes that choke supply.

kellyblack.ca•1 day ago

There’s enough evidence to warrant an investigation https://www.ctvnews.ca/business/article/competition-bureau-says-its-probing-whether-landlords-are-using-ai-to-set-rents/

adamboyce.bsky.social•3 days ago

Okay, yeah, maybe they don't raise it exactly the gap, but the point is regular people who can't afford homes are not seeing a meaningful change from anything under 6 figures.

Additionally, house flippers and landlords will never not find a reason to fuck everyone over.

rjsummers.bsky.social•3 days ago

I agree that landlords, developers, home builders, etc will all take as much profit as possible. Understanding the system is key to knowing how to intervene. The leading city on zoning reform is Edmonton.

justmarknichols.bsky.social•3 days ago

How much non-market housing could have been built with the same expenditure?

twieditz.bsky.social•3 days ago

That goes straight into the Liberal CMHC taxpayer-backed financing to attract foreign investors policy bucket.

unpopularlesbian.bsky.social•3 days ago

Oh boy, oh boy! The next 4 years are going to be as shitty as the last 8 years! 🫠

trapdinawrpool.bsky.social•3 days ago

If the Libs keep stealing PPs policies he'll have none left

unpopularlesbian.bsky.social•3 days ago

Axe the tax, buff the bank, hose the house, please the disease, et cetera.

gregbester.bsky.social•3 days ago

It's the neoliberal way!

wuhanclams.bsky.social•3 days ago

It's so funny that making housing "more affordable" must not, under any circumstances, include policies that would bring house prices down.

themeaningofliff.bsky.social•3 days ago

To just slightly deliberately misquote Die Hard:

John Mclane: Powell? Powell? Talk to me, what's going on here?

Sgt Al Powell: That's the Government. They got the universal capitalist playbook and they're running it, step by step.

tesplendente.bsky.social•3 days ago

Schumer du Nord

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