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Should home prices go down? ’No,’ says Canada’s new housing minister (globalnews.ca)

submitted 4 days ago by cm0002@lemmy.world to c/canada@lemmy.ca

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[-] Arkouda@lemmy.ca 3 points 3 days ago

It is only important if one wishes to ignore the basic economic principle of "Supply and demand". More supply, less demand, lower price.

[-] kbal@fedia.io 0 points 3 days ago

It's centrally important and means that they are still in denial. Real prices must come down — as you say, due to basic principles of supply and demand — if the problem is going to be solved. But they cannot be allowed to come down, because that's another financial crisis waiting to happen. And nobody wants more general inflation either, when we've so recently been reminded how much it sucks. It's quite a dilemma.

[-] Arkouda@lemmy.ca 1 points 3 days ago

It’s centrally important and means that they are still in denial. Real prices must come down — as you say, due to basic principles of supply and demand — if the problem is going to be solved. But they cannot be allowed to come down, because that’s another financial crisis waiting to happen. It’s quite a dilemma.

Can you elaborate?

[-] kbal@fedia.io 0 points 3 days ago

The current problem is that housing prices are too high and must come down. Getting the government back into the business of directly building affordable housing is one effective way to accomplish that. If whatever they do doesn't bring prices down then they haven't done enough, and the problem remains.

[-] Arkouda@lemmy.ca 1 points 3 days ago

Getting the government back into the business of directly building affordable housing is one effective way to accomplish that.

Is this not the plan?

[-] kbal@fedia.io 1 points 3 days ago

To quote the minister, "no."

The Globe and Mail pointing out the obvious a year ago: "Cutting shelter costs while ensuring that homeowners’ property values remain high could be viewed as contradictory."