Covering business, finance, and economics every week can be a little depressing. In just the last two years, personal savings have evaporated, consumer debt has hit record highs, and the job market has been defined by anti-worker trends such as ghost jobs, broad sector layoffs, and gig work—all while

asset prices have ballooned far faster than household incomes or even their intrinsic fundamentals. The results have been pretty simple: it's getting much harder for people who work for a living to keep up with those who already have assets. Even the most diligent and career-

focused people are finding it tough to make ends meet, let alone accumulate assets so that they, too, can one day achieve financial security. But even if you are feeling it's all a bit hopeless, just remember it could be worse: you could be from Canada.

How the hell is anyone existing in Canada? Like, I just...I feel trapped. It's saying house prices in Vancouver are expected to rise, get back to the peak where they were two years ago. A landlord did pay for her to live in a motel for a short period of time, but

that has ended. She says her only option was to move into her shed. There's no place else she can afford to live. As Canadian students head back to school, a growing number are still trying to find work. The latest U.S. Census data shows that in 2022, more than 126,000 people moved from

Canada to the United States. Okay, so a big problem across the world right now are figures like GDP, stock market prices, and unemployment numbers that look really, really good but don't actually help the people whose incomes haven't kept up with productivity, don't own stock, and are

Working four of the new jobs that have been created and are still struggling with bills, but in Canada, not even the big picture numbers look good anymore. GDP growth has been sluggish, and because of population growth driven by high levels of immigration, GDP per capita hasn't really improved at all over the

last 10 years. Unemployment is also higher than in America, and average annual wages are far lower. However, there is one area where they have a commanding lead over the USA, and that's average home prices. The average Canadian earns less and has to pay much more for a place to

live, making one of the biggest problems in the world right now far worse for our northern brothers. Now, Canada's biggest exports have always been natural resources, manufactured goods, and YouTube videos about how up their housing market is, so this probably doesn't need to be said again, except that a lot of

this is missing a much more important problem. This is probably going to be shocking to you, but America has an unaffordable housing problem too, and so does most of the developed world. But Canada is still a little bit different. Comparing the price of real estate

worldwide is actually incredibly difficult because a city like Tokyo is certainly more expensive per square foot than San Francisco, but there are also a lot more small, budget-friendly apartments for regular people to live in, which is why, even though it looks almost

twice as expensive, the city has been praised for its housing affordability. Here in the United States, our average dwelling might be more expensive, but it's also a lot larger. So, if you can afford a home, it's probably going to be more comfortable.

than a similarly priced dwelling in more compact cities. Anyway, a city like Vancouver is roughly the same as a city like Seattle; they have a similar population, similar cultural preferences for freestanding homes spread out around a business district, and they are even relatively close to one another.

The price of the average home in the Vancouver metropolitan area is slightly more expensive than the average in Seattle, but Seattle has a median household income more than twice as high as Vancouver's, thanks largely to Big Tech companies like Microsoft and Amazon, which have their global headquarters in

the city, as well as dozens of other major tech companies and supporting firms which have big offices there as well. These companies employ lots of people in very well-compensated roles, so they have pushed up the price of real estate in places like San Francisco, New

York, and Seattle. As someone who has personally moved to one of these cities to work one of these jobs myself, I am well aware of the problems they cause for locals who can't afford to live in their own homes, but it does, at the very least, make sense; people with good jobs

can afford to pay higher rents. And since those high-paying jobs are only really available in a few cities, they become very expensive. In the States, real estate prices have been driven by a few concentrated industries, but in Canada, real estate *is* the industry, according to

a report by the OECD. Real estate in Canada contributed to 40% of its capital investment; the USA, by comparison, was only 20%. Hilariously, this statistic was proudly reported on by the country's largest real estate agency in a post

They made this time last year. I don't get it. Why are they confessing? They're not confessing; they're bragging. Vancouver doesn't have the same availability of jobs where young professionals can make life-changing amounts of money before they are 30 and then move out. It's

largely a regular city for regular people with opportunities that are not particularly remarkable. To put it another way, nobody is moving to Vancouver to try to get ahead financially like they are in Seattle, and the data backs this up as well. According to the most recent census data from both

of these cities, the average age of someone living in Vancouver was 4 years older than someone living in Seattle. This just makes all the problems people are facing a lot worse because, if you live in these cities, your financial situation is not defined by your income

or even how financially responsible you are. It depends almost entirely on if you own a home or not. A renter who is a highly skilled professional with diligent saving and an investment plan is going to be financially crushed by someone with an average income and no

financial discipline simply because rent is so high and houses make more money than their inhabitants. Now, again, the Canadian real estate market is up—you didn't need me to tell you that—but a lot of people leave it at just that. But hot take alert: expensive real estate

is not a problem if incomes keep up with prices. Homes in West Virginia seem cheap to Californians, but they would be very expensive to someone living in Bangladesh because of the income differences between these areas. So, while it's not as fun as opening up Zillow,

North of the border, and looking at some derelict homes that cost more than I will ever make in my lifetime. We do need to dig a little deeper. What is actually important in Canada is understanding how it actually got this

bad, without the household incomes to support it, and what the actual long-term consequences are of this mess, even for the homeowners. This is not a great situation to be in, so it's time to learn how money works to find out what they are doing in America's...

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in the description. So, if it wasn't economic opportunity that made real estate in Canada so expensive, what was it? Well, there are actually three factors at play here. My friend Richard from The Plan Bagel actually did a great deep dive on exactly this problem last year, and as a

A Canadian financial professional; his insights on this topic are definitely worth hearing if you want a more in-depth analysis. The first reason is that Canada is actually surprisingly concentrated. It's the second biggest country in the world, but most of its people live close to the southern border

in just a small handful of cities. Those small cities are largely surrounded by lots of protected natural areas, which makes them lovely places to live, but it also means that, when combined with very tight zoning regulations, there just isn't that much place to build new houses. Our Canadian brothers seem to

be even more resistant to medium-density housing than we are. The second reason is that Canada never really experienced the housing shock of 2008. Their financial sector was a little less leveraged than ours, and they were helped a lot by resource exports to China. So as

American real estate was experiencing a massive reset, Canadian property prices barely budged, and any losses were made back within just a few months. This meant that their homes stayed relatively expensive, and investors never got rattled like they did in America, where many people lost everything and became

very wary about going all in on real estate again. The third reason is simply immigration. Canada welcomes about 1/8 as many immigrants into the country every year as the USA, but we have eight times the population and a lot more cities to absorb everybody. Even some of the most

pro-immigration pundits are admitting that even we are having problems. In Canada, migration is also a little bit different because a higher share of new arrivals are already relatively wealthy people moving to the country who come through skilled worker or student visa programs. For some of these people, the job

Opportunities in Canada are entirely secondary to its political stability, safe environment, and strong property rights. A home in Canada is a very safe way to park money in a country that has its problems, to be fair, but is still relatively safe compared to some countries where people feel like the

government could seize their wealth at any given moment. This has led to a strategy known as land banking, where people will get a family member with a visa of some sort—often just a student residency—to buy a property purely as a safe store of value. Now, to be fair, the

Canadian government is aware of this and they have implemented new taxes on vacant dwellings, but it remains a popular way for people to keep their money safe, especially since people have figured out creative strategies for avoiding this tax anyway. For others, it's a lot easier to get a skilled worker

visa in Canada than it is in the U.S. So, even if jobs don't pay as well up there, they pay a lot better than similar work in developing countries. Now, this immigration has been used to help support an aging population and fill in skill gaps that existing Canadians just

aren't paid enough to do, but it's been seen by investors as further proof that buying real estate is always going to be a safe bet because the government needs to bring more people into the country to keep things working. Now, this is still only half the problem, but it does impact

the other half as well. Canadians love investing in housing, but it's been so good that they haven't been as excited about investing in anything else. And when they do invest in actual businesses that generate cash flow, U.S.-based companies have been more attractive than their own homegrown businesses.

The entire combined market capitalization of the biggest listed companies in Canada is less than Apple, Microsoft, or Nvidia individually. This is why Canadian companies can't pay as well as the big American companies, and this also means that a lot of talent leaves Canada to

get better-paying jobs here in the states. If you had the choice between living in Toronto, where the average house costs four times as much as the average in Houston, and you could make more money down in Texas, which would you choose? I'm actually asking if you

are a Canadian; leave a comment down below. Let's take a little poll here. Either way, hundreds of thousands of mostly young Canadians are making that move every year, making the country even more dependent on immigration to avoid catastrophe. Even outside of attracting financing, starting a business is much

harder in Canada because of generally less business-friendly regulations, a smaller domestic market, less talent, oh, and the fact that commercial real estate is expensive, too. Canada is a clear example that a real estate problem can become an everything problem, and it can be hard to realize this until it's too

late. Slowly letting down this house of cards without blowing up record levels of household debt is potentially going to last decades. Already, people are struggling because almost all mortgages in Canada are given on adjustable rates, which means that as rates have increased to combat inflation, the rates people are

paying on their mortgages have also gone up considerably, even if they originally took on the mortgage when rates were low. Some mortgage repayments have doubled or tripled in the last 4 years, making it hard for a lot of families to afford much else besides the roof over their

So yeah, Canada might make you feel better, but don't get too smug just yet. Here in America, we're not too far behind, and our lending standards are not as robust as Canada's. Canada is keeping their housing market afloat with the immigration firehose; we are doing it

with 1% down payment mortgages and corporate real estate investments. Our incomes may, on average, be higher, but that's pulled up by a lot of a few extremely high-income earners in the concentrated industries that have made places like Seattle and San Francisco

into what they are today: unaffordable, gentrified hellscapes. The income floor in Canada for the people most hurt by unaffordable housing is higher, assuming they can find a job. Now, if you are Canadian and these videos got you feeling a bit depressed, just remember it

could be worse; you could be Australian. Make sure to subscribe if you want to see us cover that cluster. Now, if you want a more comprehensive summary on why you can't afford a home, I have put together a brief 1-hour collection of all these problems in basically every

housing market around the world. It's on a new channel that I have made that collates topics like this and turns them into extended videos without ad breaks, which hopefully might be a nicer way to watch some old videos for some of you. So make sure to like and subscribe to keep

Well... At Least We Aren't Canada

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