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Billions in 'unknown' funds flowing into Canada's housing market [video]

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Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#71

Post by Mandatum »

redstripe wrote: post #36
teruakohatu wrote: post #17

New Zealand has a similar housing problem. House prices are skyrocketing and pricing out young people. A 25-30% rise in the past year has meant few people are saving fast enough to get a deposit. But two or three years ago the govt. banned overseas buyers. There is no reason to suggest the ban is not effective. It even bans non-permanent residents, so plenty of legitimate residents (work visas) can't purchase propert…

I don't know anything about the situation over there but did they really ban it? For example this bloomberg report talks about foreign ownership via holding companies. So are foreigners not able to hold stakes in NZ companies or are NZ companies not able to hold realestate (doubtful?).

Yeah all you need now is an IRD number, a NZ bank account or a corporation. All 3 you can setup without setting foot in the country. To those that say that's not possible, it very much is. There's little checks and balances, and COVID's made it even easier.

It's lip service and the government does nothing to help track it. The most investigative journalism that's gone into it was a few years where people tried to look up owners of holding companies and based the research on people's last names. You can imagine how well that last bit went down in the media.

Well, our trust privacy laws are very strict - so it's near impossible to tell who actually owns the companies if it's director is fronted by a corporate holding firm. These are used to protect property in the event of bankruptcies and debts, but can also be used to hide your residency.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#72

Post by ttul »

rishav_sharan wrote: post #52
fredophile wrote: post #30

Earlier quoted context omitted.

That tax applies to the city of Vancouver. Most houses in Canada are outside of Vancouver.

Did it have any effect? From what I hear, Vancouver has one of the costliest real state markets in Canada

It’s utterly bonkers. The median single family home in Vancouver costs CAD $1.9M (USD $1.5M).

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#73

Post by spfzero »

guai888 wrote: post #39
haribr wrote: post #26

Surely a role played by Chinese Govt. Why no one talks about that?

Actually CCP is doing everything they can to stop the outflow of money. CCP wants to keep the money inside of China but not very successful. There is no rule of law in China and people with money in China want to put money in place where government can not take it away from them. As CCP tighten control, money will keep flowing out by any mean possible.

This. China has no safe place for people to save the money that they have made, by whatever means. Anywhere you put it in there, it can go away in an instant if the government wants to take it away from you. We don't understand this in the west, but whatever you have, in some countries, is fair game for people with friends in high places. It's not just China, but Russia and many other countries are like this. If you make enough money to pique the jealousy of the wrong person, You will end up in jail and your savings grabbed.

Long term it's a good thing for the money to go into western real estate. Its value in the global market is being correctly recognized. Short term it is bad for local home buyers who end up priced out of the market.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#74

Post by eurasiantiger »

crummy wrote: post #60
cheesecake_luvr wrote: post #54

Earlier quoted context omitted.

Overseas buyers just get permanent residency and citizenship and buy houses. A few years ago you just needed ~$NZ5m invested in the country and you get permanent residency. There is no way the prices are driven by domestic money. My factory supervisor brother has a house in Mangere Bridge, a blue-collar suburb, built for ~$100k 20 years ago is now well over $1m. It is batshit crazy. I hear of eye-watering prices in M…

You think the price of 500k houses has been driven to 1m thanks to people who can throw around 25m?

Yes. Those people buy multiple properties in an effort to launder their drug money. Just look at the situation in Marbella.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#75

Post by redisman »

anovikov wrote: post #68

If idiots want to pour their millions into worthless concrete to inevitably lose everything when the wave of free money from central banks recedes, leaving innumerous almost free homes in the market for everyone to buy - why any sane person should object? Notice that there is no comparable craze on the stock market. P/E has gone somewhat up sure but it's just out of anticipation of record corporate profits in the com…

> If idiots want to pour their millions into worthless concrete to inevitably lose everything when the wave of free money from central banks recedes, leaving innumerous almost free homes in the market for everyone to buy - why any sane person should object?

Because everything you said is completely wrong and it takes the already extremely tight housing market to an absurd extreme where no ordinary person can purchase lodging to own. It would take a lot more than a monetary policy tightening to crash Vancouver or Toronto housing markets given how many people are moving in every year. Probably something quite cataclysmic

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#77

Post by teruakohatu »

cheesecake_luvr wrote: post #54
teruakohatu wrote: post #17

New Zealand has a similar housing problem. House prices are skyrocketing and pricing out young people. A 25-30% rise in the past year has meant few people are saving fast enough to get a deposit. But two or three years ago the govt. banned overseas buyers. There is no reason to suggest the ban is not effective. It even bans non-permanent residents, so plenty of legitimate residents (work visas) can't purchase propert…

Overseas buyers just get permanent residency and citizenship and buy houses. A few years ago you just needed ~$NZ5m invested in the country and you get permanent residency. There is no way the prices are driven by domestic money. My factory supervisor brother has a house in Mangere Bridge, a blue-collar suburb, built for ~$100k 20 years ago is now well over $1m. It is batshit crazy. I hear of eye-watering prices in M…

> A few years ago you just needed ~$NZ5m invested in the country and you get permanent residency. There is no way the prices are driven by domestic money.

In 2019-2020 just 38 of this class of visa was approved, which seems to be about the average per year over the last decade. It was just 16 in 2020-2021.

I don't think these people are buying decrepit Auckland villas, two bedroom semi-detached or tiny one bedroom apartments, given they have $10 million spare to invest.

Prices are also driven by cheaper interest rates domestically.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#78

Post by yunohn »

tannhaeuser wrote: post #40
tolbish wrote: post #3

Should housing be a primary vehicle for investment and the de facto way of making money? Or should it serve as a necessity and basic aspect of life?

Investment is a basic aspect of life; housing has been traditionally an investment to earn a living when you retire, whether individually or as part of a pension funds. The problem appears to be the monetary policies of central banks and rampant public debt, and the low interest rates, inflation, and lack of alternative investments that go with it.

> housing has been traditionally an investment to earn a living when you retire, whether individually …

Do you mean that people are expected to buy additional houses to make money from, after retirement? I don’t think that’s ever been the case.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#80

Post by anovikov »

redisman wrote: post #75
anovikov wrote: post #68

If idiots want to pour their millions into worthless concrete to inevitably lose everything when the wave of free money from central banks recedes, leaving innumerous almost free homes in the market for everyone to buy - why any sane person should object? Notice that there is no comparable craze on the stock market. P/E has gone somewhat up sure but it's just out of anticipation of record corporate profits in the com…

> If idiots want to pour their millions into worthless concrete to inevitably lose everything when the wave of free money from central banks recedes, leaving innumerous almost free homes in the market for everyone to buy - why any sane person should object? Because everything you said is completely wrong and it takes the already extremely tight housing market to an absurd extreme where no ordinary person can purchase…

Then again - if people are moving in to already tight place, who is to blame? What are the probable ways of "tackling" it you suggest? Soviet-style "closing" of a place where the Party will decide if you are eligible to buy? This is how they prevented Moscow from overpopulating in the Soviet Union, resulting in doubling the population in the decade once barrier fell with the end of Communism.

If anything, it's a source of free money for the residents: sell your current house for millions and move out somewhere cheaper, maybe retiring early as a result.

If you don't want to people to move, analyse the reasons that push them to move and see what can be done about it. Real estate prices are just an indicator. It's stupid to "tackle" indicator rather than underlying reason.

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