Typical - print 100s of billions, when assets inflate blame x, y or z.
How about Justin explains how foreigners owning 2% of homes in Canada has ANY impact whatsoever on prices?
Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
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Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
#12This is the wrong approach, solving a superficial symptom of a deeper root cause. The problem is that housing is a commodity, not that foreign persons are purchasing the commodity. I guarantee you that if he follows through on this we'll see enterprising Canadian "entrepreneurs" buying the homes and creating securities to hide the ownership details and then selling those securities abroad. If the market exists, wealt…
Xenophobia is a classic way to win an election. From that perspective this is a great policy for him.
Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
#13As someone that's been a moderately successful transplant in many cities, I have seen local populations point the fingers at very arbitrary reasons or people for why people can't afford anything.
The commonalities between these populations is that they seems to neglect general macroeconomic trends, as well as local zoning gaffs.
Makes it almost impossible for me to empathize if everyone is so far off the mark.
Fortunately, being a melanin-infused minority I get to blend in to the left side of the inequality bell curve. So, that's a nice privilege in the populist uprising. "Gotta watch out for those gentrifiers I'll let you know if I see any! I can't believe anyone would have the audacity to pay the listed prices or leases set by landlords already here."
A foreign buyer ban will also miss the mark.
Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
#14Maybe I don't know enough about how this works in Canada in particular, but will this do anything? I thought a lot of the issue was from housing as an investment vehicle, and not specifically foreign investment. And are foreign investors really buying the real estate directly, or are they purchasing REITs and the trusts are buying them on their behalf (laundering the "foreignness" of the investment)? And, as always,…
We had this in New Zealand a few years ago too. Prices kept climbing regardless (in my area, prices have doubled in the 3 years since the ban). The real problem is normal owner-occupier homebuyers since they do most of the buying. But they're also the common people and the "victims" so they can't easily blame themselves for their own greed and need a scapegoat like foreigners or investors.
Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
#15the blame-the-foreigners narrative has always sounded too convenient to be entirely true. People used to love saying this in California, when there clearly are so many other problems with housing like Prop 13 and zoning. Is there any data from reputable sources that actually quantifies this effect?
Prop 13 protects existing long-term home owners. Ive seen no solid report that it has impact on current prices. I’d wager CEQ and zoning laws have done more harm than prop 13.
Government backed lending is a primary cause. Just like how student loans enabled university costs to skyrocket.
Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
#16Maybe I don't know enough about how this works in Canada in particular, but will this do anything? I thought a lot of the issue was from housing as an investment vehicle, and not specifically foreign investment. And are foreign investors really buying the real estate directly, or are they purchasing REITs and the trusts are buying them on their behalf (laundering the "foreignness" of the investment)? And, as always,…
Buying expensive apartments and letting them sit vacant for money laundering purposes is a well-known phenomenon by now. This has significant effects on prices from increased demand, while also a detriment to resulting empty neighborhoods.
Foreign investment of construction is a thing but I’ve not seen any studies on the net effect.
Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
#17Nice, this will curb the unacceptably high 4% of home buyers who are foreign who are definitely responsible for driving the market prices up.
It certainly couldn't be driven up by the fact that if you ask virtually any person under 40 if they will purchase a home once they can afford one they will say yes.
If only there was a way you could put more than one home on a single lot so you could actually meet demand without building $300m apartment buildings.
Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
#18Maybe I don't know enough about how this works in Canada in particular, but will this do anything? I thought a lot of the issue was from housing as an investment vehicle, and not specifically foreign investment. And are foreign investors really buying the real estate directly, or are they purchasing REITs and the trusts are buying them on their behalf (laundering the "foreignness" of the investment)? And, as always,…
We had this in New Zealand a few years ago too. Prices kept climbing regardless (in my area, prices have doubled in the 3 years since the ban). The real problem is normal owner-occupier homebuyers since they do most of the buying. But they're also the common people and the "victims" so they can't easily blame themselves for their own greed and need a scapegoat like foreigners or investors.
If that’s the case, with enough housing supply prices would be stable. Both can’t be true however.
Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
#19Foreign ownership of houses comprises only small % of the housing market [1]. The measures promised (but all political parties, not just Trudeau) have been applied in New Zealand and their housing market still remain white hot. The root cause is low supply of houses in Canada, the red tape around land / property development keeps construction of housing slow and costly.
[1] https://www150.statcan.gc.ca/n1/pub/11-626-x/11-626-x2017078...
Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election
#20A temporary ban seems like it won't be very impactful in the long term. Have these sorts of policies, even when permanent, had much of an impact on places where they're implemented? From what I've heard it doesn't seem to have cooled off the market in places like New Zealand
It didn't have measurable impact in NZ. NZ has many other, bigger, problems w.r.t. housing affordability though. I think it's a policy worth doing even if it doesn't actually reduce house prices because it removes an obvious scapegoat, and shifts the discussion to other, hopefully more effective solutions.