Billions in 'unknown' funds flowing into Canada's housing market [video] • Hacker News Board

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

#161

Post by FooHentai » Fri, Jul 30, 2021, 9:05 AM UTC

digislave wrote: post #124

FooHentai wrote: post #86

Earlier quoted context omitted.

Probably a false dichotomy; the ideal is somewhere in the middle. It's reasonable to plan to extract some value back out the commutable, family-size when retiring to somewhere smaller and further out. But it's a problem when this becomes the primary or only available means of funding retirement.

But isn't that also a factor of what people prepared to pay? Like if some people are prepared to pay 50% or more of their income to live in an attractive location, prices will rise so that to live in that location, most people will have to pay almost all of their income for it? I am not sure there should be regulation to prevent people from doing that, as it represents personal choice and preferences.

Definitely, and also a factor of what people are willing to lend.

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

#162

Post by em500 » Fri, Jul 30, 2021, 9:12 AM UTC

fastball wrote: post #25

sunstone wrote: post #11

Earlier quoted context omitted.

In Australia if I recall correctly, foreign buyers are only able to buy newly built homes. Canada would benefit from a similar rule, it would stimulate more housing and not impact the demand for existing homes.

In Indonesia, only citizens or businesses with part ownership by citizens are allowed to own property, and I think this is probably the right way to go for most other countries as well. Unlike the vast majority of other human endeavors, land actually is a zero sum game, at least until we are a space-faring species.

> Unlike the vast majority of other human endeavors, land actually is a zero sum game, at least until we are a space-faring species.

Around 17% of the Netherlands is reclaimed from the sea or lakes. The largest project (the Flevopolder [1]) was 240,000 acres, reclaimed in the 1950s and 1960s. Most of the land is still just meadows/grasslands (it has 2 towns with less than 350k inhabitants in total).

Meanwhile, in Amsterdam (less than 30min away by car or train) house prices keep increasing by 10%+ YoY. It seems that lack of physical land is not the main limiting factor.

[1] https://en.wikipedia.org/wiki/Flevopolder

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

#163

Post by quantified » Fri, Jul 30, 2021, 9:14 AM UTC

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.

Treated as an investment, but nothing guaranteed. It’s only beating inflation if the cost of housing is going up. Which it has, but now we’re seeing the problems with that.

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

#164

Post by wuschel » Fri, Jul 30, 2021, 9:19 AM UTC

ChuckNorris89 wrote: post #151

wuschel wrote: post #142

Earlier quoted context omitted.

I was just wondering. It's hard to understand markets, IMHO, and I have no feeling how a potential balance between cost of money, supply and demand should look like in a sector like housing. Do you have any references or literature that would give me a better understanding? Originally, I also thought that proper restriction of foreign investment might be a good solution. I agree with you that it must be domestic acto…

>It is crazy what happens in cities like Berlin in regard to gentrification Can you elaborate on this?

Sure.

In the case of Berlin inner city districts like Kreuzberg, Prenzlauer Berg et cetera have been rapidly changing in the last 10 to 20 years. This is in part because population is dying off/moving away, but also because developers are buying apartments and are actively removing the old inhabitants in order to be able to charge higher rents.

There are laws in Germany that regulate the increase in rental payments. However, with the current price levels in housing, only a new contract with a tenant can give an investor an income that justifies the price payed for a property. The 'historic' population that can not afford the new level of rent is pushed out to the outskirts of the city [1].

Other cities of this tier e.g. London have similar population and price effects.

[1] "Plattenbau" in Berlin - not so trendy. See: https://www.bz-berlin.de/media/plattenbau-sanierung-in-marza...

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

#165

Post by dillondoyle » Fri, Jul 30, 2021, 9:20 AM UTC

yardstick wrote: post #160

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’ve talked with a friend in NZ who have recently purchased 5 houses all to rent, all have mortgages, and none in expensive cities (think South Island outside CHCH and Queenstown). They work full time in Auckland in a business they run. The housing crisis has been this way since at least 2000 or so. It won’t change until: - Stamp duty for buying rentals / converting to rentals, maybe 10-20% - Limit the number of exis…

Is there a reason increasing supply wouldn't be an easier solution?

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

#166

Post by rorykoehler » Fri, Jul 30, 2021, 9:25 AM UTC

lrem wrote: post #158

rorykoehler wrote: post #154

Earlier quoted context omitted.

There is no space for that without radical rezoning and densification. The alternative is every city turning into massive urban sprawl which is entirely undesirable. If you are suggesting forcing private investors to make their properties available to public housing stock then I’m not sure why that would be an improvement without serious rent caps in place.

A colleague told me about the setup in their home country some weeks ago, I _think_ that was the Dutch one, excuse my fuzzy memory... Once your €1500 tenant leaves, you have 3 or 6 months to find the next one. If not, the city will offer your place in parallel as social housing and you'll get €400 (flat rate for the whole municipality per size band) if that gets filled first. On a three year contract. Makes for a ver…

It's good and I wouldn't complain if this was an outcome however better yet would be a system that allows people to buy their own homes. One of the major pitfalls and imo systemic national security risks in Europe are the high income tax rates. This coupled with foreign investment in the property market means that regular Europeans are effectively priced out of the market with no way back in. Long term this is a crazy risk to run for the sake of maintaining inefficient bureaucracies that don't remotely cater to the pressing needs of citizens.

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

#167

Post by yardstick » Fri, Jul 30, 2021, 9:32 AM UTC

dillondoyle wrote: post #165

yardstick wrote: post #160

Earlier quoted context omitted.

I’ve talked with a friend in NZ who have recently purchased 5 houses all to rent, all have mortgages, and none in expensive cities (think South Island outside CHCH and Queenstown). They work full time in Auckland in a business they run. The housing crisis has been this way since at least 2000 or so. It won’t change until: - Stamp duty for buying rentals / converting to rentals, maybe 10-20% - Limit the number of exis…

Is there a reason increasing supply wouldn't be an easier solution?

Yes increasing supply will help, and my suggestions encourage increasing supply over turning existing stock into rentals, but if the new supply is all rentals that doesn’t help owner occupiers much.

What needs to happen is owner occupiers are given a competitive edge when bidding for a property over a landlord. Hence more taxes and disincentives for buy to let purchasers.

So for example a property selling for $1m, what would happen if it actually cost a landlord say $1.5m after taxes, higher interest etc, but an owner occupier would still just have to pay $1m. That gives an advantage to someone who actually needs the home.

Edit: Also new supply takes a long time to ramp up, with planning permission, land acquisition, infrastructure, and there are materials shortages (wood especially) and cost overruns rampant at the moment. There is also a potential issue in the quality of supply (see the leaky building crisis in NZ in the 90s, or how small the apartments of the last decade are).

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

#168

Post by pkorzeniewski » Fri, Jul 30, 2021, 9:32 AM UTC

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?

I'm disgusted by the whole real estate market, people buying dozens of apartments and houses just to rent them - and hence increasing prices for people who just want something on their own instead of making rich people richer - is destructive for society, especially for young people. Owning a roof over your head shouldn't require an average person to work their ass for half of their lives.

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

#169

Post by eurasiantiger » Fri, Jul 30, 2021, 9:45 AM UTC

petre wrote: post #93

eurasiantiger wrote: post #74

Earlier quoted context omitted.

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

You probably mean this? https://www.theguardian.com/news/2021/may/20/a-united-nation...

Yes. The situation is likely similar all over the world where there is a housing bubble and large markets for drugs.

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

#170

Post by tibbetts » Fri, Jul 30, 2021, 9:47 AM UTC

wuschel wrote: post #111

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…

Let us assume it is not overseas buyers - what factors are left? Is it just access to cheap credit that drives investment into the housing market all over the globe?

Also lack of supply in compelling geographies.