One of the most revealing comments yet on Canada's obsession with housing can be found in the budget speech given last week by the Finance Minister of British Columbia.
"Is there anything more reflective of who we are as Canadians than the dream of owning a home … and the ability to make that dream a reality?," Mike de Jong said. God, I hope so. But probably not.
In these uncertain times, housing has assumed a role that is out of sync with its true importance and its role in other countries. Housing is a religion and, if you'll forgive a personal finance writer making a reference to Karl Marx, it's the opium of the masses.
Never mind that house prices in cities where the oil industry is a big deal are flat or falling, and that there are places in the country that haven't seen anything close to the gains in Vancouver and Toronto. Canada's new national dream is home ownership. Housing completes us.
They thought the same thing in the United States until the housing market cratered in 2008-09. Now, national U.S. publications such as The Atlantic are running articles like this one, which is headlined The New American Dream: A Rental of One's Own. Our housing market isn't set up to crash like the U.S. market did as a result of insanely negligent lending practices. But we are putting too much of our financial and political capital into sustaining the housing market. A serious price decline would be traumatic to the economy and the households of the nation.
Our finances would be better off if we started treating houses as what they are – consumer goods that a growing number of people cannot afford and shouldn't buy because they're too pricey. Instead, we regard home ownership as living the dream and treat rising prices as validation of this view.
If I only had a buck for every time someone criticized today's young people for having fancy smartphones. The point being made is that millennials are mindless slaves to fashion who spend above their pay grade on toys. A millennial should never open her mouth to complain about anything to do with money unless she has a cheap cellphone.
With houses, a vastly more expensive purchase, we encourage young people to spend beyond their means. We feel they're entitled to a home and must be helped to buy if necessary because ownership is such a great financial move. Parents dig into their own savings to help their children, and politicians like B.C.'s Finance Minister adopt their cause. He just introduced a measure that would conditionally help people save up to $13,000 in property transfer taxes on homes costing less than $750,000. For an exhaustive list of other government measures to help housing, check out this column I wrote last year.
No matter how much money you have to save for a down payment, buying a house is the easy part. It's much harder to afford the endless financial demands of home ownership and find money for your other goals and obligations.
This is something that housing cultists do not address. Instead, they describe a dream of ownership that legitimizes itself as a depiction of domestic bliss while also offering the promise of a jackpot from rising home prices over the years. Houses are this country's one big financial success story for the average person.
We had the Nortel Networks era of stock market wealth for all and that blew up. We had income trusts, but they got too big and had to be shut down. Energy stocks tanked, and now our beloved bank stocks are dragging. But houses in many cities have been a lottery win for long-time owners.
And so we hear endlessly about a dream of home ownership that is ultimately about maintaining wealth and status for certain groups. Included here are the long-time owners in Vancouver, Toronto and some other cities, the politicians who depend on their votes and the big chunks of the economy that live off home sales.
A house is a nice place to live, especially if you're raising kids. Partake if you can afford it, but don't be persuaded by the voices of the housing sector's dream syndicate. They're mainly looking after themselves.