this post was submitted on 07 Feb 2026

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The numbers don’t lie: The housing crisis is not caused by a supply shortage (www.policyalternatives.ca)

submitted 1 day ago by sbv@sh.itjust.works to c/canada@lemmy.ca

47 comments fedilink hide all child comments

the housing crisis has been created by banking practices that have directed excessive amounts of credit into the property market, and especially residential mortgages. As a result, buyers can bid prices up to ever-higher levels, resulting in a market where people must pay more for the same type of housing. Hence financialization can be defined as an inflationary tendency in the housing market that is induced jointly by banks’ desire to expand mortgage lending and buyers’ confidence that the value of their properties will rise.

...

However, the image of a bubble bursting and prices returning to a more rational “equilibrium” level does not seem to apply to the housing market. Because housing is a necessity, people are willing to pay high prices for it. Bidding wars can therefore persist even when relative supply grows, so long as credit markets enable them.

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[–] CanadaPlus@lemmy.sdf.org 16 points 1 day ago* (last edited 1 day ago) (7 children)

Because housing is a necessity, people are willing to pay high prices for it. Bidding wars can therefore persist even when relative supply grows, so long as credit markets enable them.

Right, that's why I see rural houses literally falling over because nobody wants to live in them. /s

Supply and demand applies to food. It definitely applies to housing.

The central argument of this is that because the number of houses per adult is the same as 1989, the housing supply is fine. And then they have the audacity to claim other people are cherry-picking. No mention of average household size being different now, even just considering adults (nor mention of urbanisation). There's little effort to support their own theory with numbers, either.

Not to mention, that very same graph has a noticeable dip right in the recent years where it's become an issue. They've just scaled the graph so it's not emphasised. 1989 was the last time it was so low.

[–] definitemaybe@lemmy.ca 3 points 18 hours ago (6 children)

Housing size is specifically addressed:

On top of that, the square footage of housing units in Canada has on average been growing across all housing types, which should in theory provide more flexibility for people to live with roommates.

Housing units are bigger and there are more of them per capita any way you slice it: by population, by number of adults, or by number of households.

They make a very compelling argument that the big change is not anything to do with supply, it's entirely a result of easing burrowing standards and increased access to credit. It's not as simple a story, but it actually offers a reasonable explanation for the observed data, while ECON101 Supply & Demand arguments don't match the data. Doesn't matter if it makes sense if it's wrong.

[–] FireRetardant@lemmy.world 1 points 14 hours ago (2 children)

I think a big part of the supply problem and the generational difference in ownership is the size creep of homes. Homes have been getting bigger and bigger to support the same sized families meanwhile wages have stagnated. Thats all extra flooring, walls, insulation, labor to build, energy to heat, wires to run, property taxes to pay etc. We need to change the way the supply is skewed and start offering more reasonably sized homes.

Sure if you want and can afford a 2500+ sqft 3 storey house then shop for that, we build lots of those, but we don't build lots of 500-1200 sqft homes which reflect the size of starter homes from decades ago. Many homes this size need to be custom built or are built by smaller developers. We don't see entire neighborhoods of these sized homes anymore. Same goes for apartments, they've experienced luxury condo creep despite demand for that level of luxury being met already.

[–] prodigalsorcerer@lemmy.ca 2 points 9 hours ago (1 children)

The problem with building a 500-1200 sqft home is that most of the price is in labor and land. So it doesn't cost a lot more to make that a 1500-2500 sqft home instead, which will in turn give more profit.

[–] fourish@lemmy.world 1 points 5 hours ago

A local developer bought an old single detached home for 1.3 million and knocked it down to build 4 small sdh micro units on that property. Each one is currently listed for $650,000. I was watching the construction and I’m sure they didn’t pay anywhere near that for materials. They’re ok but definitely not quality.

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