Flipping houses isn't a significant factor in the housing market. The main factor is the demand for housing. That demand is driven by many factors including offshore investors, Rental leveraging, immigration, etc. It's further exacerbated by increasing costs associated with material costs, insurance costs, permitting costs, etc.
The more money you make, the more you should be working with a financial planner to reduce the impact of taxation on your income.
Financial Institutions and mortgages aren't the problem. You need to consider home ownership as a cost of housing. That cost is apparent whether you own or rent. If you take the difference between ownership and renting factoring in all the costs, insurance, property taxes, heat etc.. and you offset that cost by comparing it to the equity you build up in the home, you can determine which path is better for you. Like I said before, everyone's situation is different.
Most people don't have investments. Most people don't have a very strong saving mentality. Realistically speaking you should be putting aside at least 10% of your gross income annually (whether into a pension, investment, property, business or other asset) to direct towards your personal goals, whether that's retirement, home ownership, kids education, etc. Yes mutual funds have built in costs but you'd have to be investing in very poorly managed funds if the cost of the fund management results in an overall negative return that depletes your investment over the long term. If you don't have the risk tolerance or time frame to invest in mutual funds you should look for other alternatives, but the investment vehicle (mutual funds in this scenario) is less important than the type of investment you are putting your money into. Everyone's situation is different, there isn't any magical best way to do things, the reality is that the better you understand your own financial situation and define your goals, the easier it is to direct your money to achieve those goals.
Sorry for preaching.
Flipping houses is a factor. But not anymore.
Yes the other factors you mention are factors, but not as much as the flipping houses, when you have 200-300 people flipping houses in an area. Look at this as when the great box stores started Rona, home depot etc. The Fed gov stopped the free capital gain limiting it to 2?? houses; now if you own the home less than 365 day your capital gains has to show up as income. All this to slow down the flipping of houses.
The major amount of immigration has happened since the 1990s when immigration started to be over 200,000 a year. Since 2018 its been over 300,000 per year. Did the demand come from the immigrants, not entirely so. A family of four eventually turns into 3-4 households, depending if there is a divorce. Now this is over a 20 year period.
Banks are a problem to your wealth, as they charge compound interest on mortgages. You pay 2-3 times the amount of your original mortgage. Money that you could use to increase your wealth. Pretty much its designed to keep the poor, very poor and the rich and bankers richer.
Mutual fund manager fees are usually 2%. In five years that takes away 10% of the fund. In the longterm of 40 years that could be 80% you could of earned on your invested money. That 2% adds up and takes alot away...The hook is the 10% return over all the years you invested..... The fund has to earn over 12% a year for you to achieve the compound interest of 10% for the longterm....
Its still cheaper to rent these days. In 2000 I was paying 600.00 for a 1 bedroom apartment. Now a 1 bedroom cost 1500.00. No property tax, just content insurance. Hydro.
Still that is cheaper than a house, where the mortgage is about 2000-2500 an month, Condo policy, property tax, house insurance and content insurance, water, sewer (water and sewer for renters usually is included in rent), and then hydro.
With a house you can save money but its wealth is tied up in the home. The thing is now people who own condos and rent them out are passing on all the prop tax, insurance and water, sewer and condo fees onto the renter, which is why I think the rent is so high today.
I also think that anyone that is making higher than min wage are saving.
Also there are too many rules for our money, all the rules need to be made simpler. A straight tax of 25%, no deductions for income tax. If you can't explain capital gains tax in under 2 pages, the system needs to be simplified.
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