Arnold Schwarzenegger
Former California Governor Arnold Schwarzenegger isn’t mincing words about California’s escalating housing crisis.
In an appearance on Theo Von’s This Past Weekend podcast, Schwarzenegger recalled that when he first arrived in California, the state’s population was around 20 million. Since then, it has roughly doubled — a surge that, he argued, demanded a proportional increase in housing.
“When you go from 20 to 40 million people, then you need twice as many houses, you need twice as many apartment buildings, you need twice as much of everything, schools and everything,” Schwarzenegger said.
“They didn’t take care of them because the environmentalists thought that if we say, ‘no growth,’ then no one will come. But in the meantime, no one gives a sh-t about that — they come anyway. Then somehow they live three people in one apartment, or five people in one apartment, workers — they sometimes live 10 people in one apartment.”
He explained that with limited housing supply, prices inevitably skyrocketed. “The unit that used to cost $600 now costs $3,000 a month. But the salaries, the wages didn’t go up accordingly. So now you have people that are economically homeless — they cannot afford paying for their rent anymore, so this is created by the politicians,” he said.
While California stands out in North America for its steep housing costs, prices in Canada have also seen substantial increases, particularly in urban centres like Toronto and Vancouver.
In 2013, the average rent for a one-bedroom apartment in Toronto was $1,600. By 2022, that price had reached $2,503.
In Vancouver, during the same time period, the average rent for a one-bedroom climbed from $995 to $1,543.
For homebuyers, average prices are also eye-watering. As of July 2025, you need an income between $184,024 and $213,980 to qualify for a good mortgage rate in Toronto. Average home prices are now just shy of $1 million.
Across the country, average home prices increased 375% between 2000 and 2021. Meanwhile, median income did not keep apace. It was $23,100 in 2002, and $42,090 in 2022, an 86.5% increase.
There is a few reasons why housing prices have risen to the unaffordable heights they’ve climbed to in recent years.
Its inception can be traced back to the market crash of 2008, where borrowing costs dropped to drastically low levels and remained there until the covid-fuelled inflation of 2022 took charge.
Then, there’s the influx of immigrants that have surged into the country in the wake of the pandemic, which coincided with rising housing prices. This was tied to inflated costs for construction materials due to supply chain issues, alongside concerns around zoning, permitting and development fees.
Lastly, and more clandestinely, is that homeowners have also become enamoured with the rising prices since they increasingly view their homes as a financial asset.
Peter Kershaw, a public policy professor at the University of British Columbia and founder of the affordability advocacy group Generation Squeeze, notes how the current system “incentivizes extracting profit from real estate, rather than prioritizing that everyone has access to affordable shelter.”
Yet real estate remains a popular investment choice for those looking to hedge against rising living costs. When inflation goes up, property values often climb as well, reflecting the higher costs of materials, labour and land. At the same time, rental income tends to rise, providing landlords with a revenue stream that adjusts with inflation.
However, investing in real estate in Canada isn’t always straightforward in terms of ROI. Here’s what you need to know if you want to invest in REITs or rental properties.
Read more: Here’s how to retire in 10 short years no matter where you live in Canada — even if you’re starting with $0 savings
Traditional real estate investing, ie: becoming a landlord, was a hot investment route for many baby boomers, but the shine has come off this particular diamond of late. For example, the Globe and Mail reported in 2024 that 81% of investors who took out a mortgage to buy investment condos that year were losing an average of $605 a month.
If you’re still interested in adding this labour-intensive asset to your portfolio, be sure you’re investing in a property that is desirable for renters, and that being a landlord fits your lifestyle.
However, there are other ways to take advantage of this hot market. Buying shares in a real estate investment trust (REIT) or real estate ETFs allow you to earn passive income. These investments are like stocks, and can offer similar growth opportunities.
REITs are publicly traded companies that own real estate or finance related projects. Publicly traded REIT stocks, real estate mutual funds and ETFs can all be purchased through a broker like ordinary stocks.
REITs investment funds are pooled from individual investors and used to build a portfolio of real estate investments, much like an index fund. When you invest, you can choose equity REITs, which lease owned commercial properties to tenants, mortgage REITs or mREITs, which act as lenders to real-estate owners, or hybrid REITs, a blend of the two.
As with investing directly in property, the current corrections in the real estate market mean that you should do your research before investing in a REIT or similar type of fund, as future growth may not equal past gains.
Real estate isn’t the only asset investors turn to during times of inflation. Gold has helped people preserve their purchasing power for thousands of years.
Today, the yellow metal is as relevant as ever for a simple reason: Unlike fiat currency, it can’t be printed in unlimited quantities by central banks.
Gold has also long been viewed as a safe-haven investment. It’s not tied to any one country, currency or economy, and investors tend to pile in during times of economic turmoil or geopolitical uncertainty — driving up its value.
In just the last 12 months, the price of gold has surged by 40%.
Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, recently highlighted gold’s importance in a resilient portfolio.
“People don’t have, typically, an adequate amount of gold in their portfolio,” Dalio told CNBC earlier this year. “When bad times come, gold is a very effective diversifier.”
1. YouTube: Arnold Schwarzenegger | This Past Weekend w/ Theo Von #587 (Jun 5, 2025)
2. GTA Homes: The GTA’s Rental Rate History
3. Nesto: Income Needed to Buy a Home in Toronto, by Samson Solomon (Jul 31, 2025)
4. National Post: Canada’s unhinged housing market, captured in one chart, by Deborah Stokes (Nov 10, 2021)
5. Statista: Median annual income in Canada from 2002 to 2022 (Jun 2024)
6. CBC: Can you guess how housing costs changed under Harper and Trudeau?, by Nael Shiab (Mar 25, 2025)
7. CBC: The dirty secret of the housing crisis? Homeowners like high prices, by Andre Mayer (Apr 15, 2024)
8. The Globe and Mail: Just over 80% of new condo investors in Toronto are losing money on their rentals, by Rachelle Younglai (Jul 25, 2024)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.