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It’s amazing how much money is made every year in real estate and how much the average Canadian is willing to draw from for affordability.
Few of us realize the extent of profit involved in the rising prices, and that’s the last thing Poilievre wants to talk about. Economist Jim Stanford notes that the real estate sector took after-tax net profit of $55.8 billion in 2022 – up 65 per cent from 2019. It remains at a historically high $48.5 billion in 2023. On top of that, construction profits are almost 50 per cent higher than pre-pandemic levels, totalling $31.2 billion in 2023. The amounts are simply staggering.
It’s not profit, it’s theft. It is profitable for a contractor to build a new house in a market like ours - even if the sale price is completely mismatched to the effort it took to build it those millions of dollars are going to people who made something they innovated a new object into existence.
Our market is one of theft, the elderly generation and the corporations they spawned to commoditize housing are robbing the young of the ability to invest in businesses or their leisure or starting a new family. The market needs to crash.
(Obviously, Canada is both reselling existing housing and constructing some new housing… but our construction sector is tiny compared to the resale market).
Yeah. Profit is what’s left over after everyone who’s done the work gets paid for their labour (including those with equity), so that means all profit is theft. Either the customer overpaid, or the workers were underpaid (or both).
There’s a Chinese proverb: Winners are kings and losers are bandits.
I’m really not to hung up on the wording of how the money ends up in who’s pockets most people think they’re the good guy. I just wonder if really have to wait until things get so much worse before we can get a majority on housing affordability.
If you outlawed real-estate agents and made housing transactions go through at-cost through a public board, you’d probably do more for housing than just about anything else.
When economists talk about non-productive uses of capital, this is what they mean. This isn’t “investing”, this is parasitism.
Just to pull a number out of my ass I think we’re 10 years away having enough people vote for affordability to actually have politicians implement any sincere policies meant to make housing affordable.
