Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

bloomberg.com

Post reply on HN
Print view View original

31–40 of 73 posts

Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

#31

Post by krickkrack »

epa wrote: post #22
krickkrack wrote: post #11

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?

It has been an issue in the Canadian market for 20 years now and has had a material impact on housing prices in certain big markets.

I understand that this is the narrative, but show me what markets specifically. Even if ownership is 10%. That means 90% of homes that are bought and sold are NOT to foreigners.

The fact is that inflation has eroded away the value of $$ and houses that should cost $50,000 now cost $700k.

Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

#32

Post by mixmastamyk »

exporectomy wrote: post #24
mixmastamyk wrote: post #18

Earlier quoted context omitted.

If that’s the case, with enough housing supply prices would be stable. Both can’t be true however.

Not entirely. In NZ, people really favor single family homes near or in big cities. That just doesn't scale because of finite land. Nobody wants to settle for a duplex or worse, an apartment. Perhaps eventually prices for those high density homes will be stable and single-family-home owners will be super rich.

Well yes, there’s always been more desirable properties. Location, location, location, and now especially? SFH.

Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

#33

Post by baybal2 »

rubayeet wrote: post #19

Foreign 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-…

Having few skyhigh priced McMansions on property listing just to fish out these 4% of rich foreign buyers definitely makes most realtors to put extra efforts to cater to them, and hold out on locals.

Having foreign buyers buy very so-so, if not shitty for the price houses with 20% 30% premiums is a story which many realtors in Vancouver can talk about.

Although, I admit, the root cause is still the understudy of housing in big, fast growing cities.

Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

#34

Post by mixmastamyk »

exporectomy wrote: post #25
mixmastamyk wrote: post #16

Earlier quoted context omitted.

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.

Any data to back that up ("significant effects on prices")? Otherwise it may just be news-hyped outrage mongering.

Don’t need data to prove basic economics at this point. The question left is, does it happen with enough frequency to be a major factor?

I’m not that familiar with the market in Vancouver, however they did pass a law regarding vacancy I believe. Perhaps a local could chime in on efficacy.

Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

#35

Post by idoh »

It’s so crazy, the government just has to get out of the way of developers and then the problem will just sort of solve itself. We are sitting on the biggest economic opportunity thinkable because there is 30+ years of pent up construction demand. Simply letting that happen would unlock so much prosperity for decades.

Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

#37

Post by freyr »

bllguo wrote: post #7

the 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?

You might try this paper (https://www.tandfonline.com/doi/full/10.1080/02673037.2020.1...). From the abstract:

“Using new data from the Canadian Housing Statistics Program (CHSP), this paper provides a basis for an integrated account of the Canadian housing market in the last two decades. It shows how the housing markets in Vancouver and, to a lesser extent, Toronto have become de-coupled from local incomes due to significant flows of foreign capital.”

Regardless, is there a case to be made why a country should allow its housing supply to be treated as an investment vehicle, instead of the more beneficial purpose of housing its citizens? In cases like this, where a state’s obligation to the welfare of its people seems self-evident, the burden of proof is on you to to show that the massive and widespread foreign investment in real estate leading up to a housing affordability crisis somehow was not a factor.

Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

#38

Post by kenned3 »

This is such BS on so many levels.

First, how is this still an issue given affordable housing was his platform in 2015?

October 5, 2015 Infrastructure: The Liberals want to invest $20 billion in public transit over 10 years, almost $20 billion more over 10 years for affordable housing, seniors’ facilities, early learning and recreational facilities; and $6 billion for green infrastructure over four years. They would also create various tax incentives and other programs to encourage the construction of both rental market and social housing.

Next, all this will do is encourage the use of "numbered corporations" to do the buying. How many homes in Canada are already owned this way?

use the existing anti-money laundering laws and stop the using Canada as a means to launder ill gotten gains.

Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

#39

Post by koolba »

rubayeet wrote: post #19

Foreign 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-…

Percentage of the total market is not the issue. The issue would be percentage of sales. If a large chunk of them are foreign cash offers, this would have a massive impact.

Assuming they don’t work around it through straw purchasers…

Re: Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election

#40

Post by hn_throwaway_99 »

lwansbrough wrote: post #17

Nice, 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 witho…

I'm not saying the ban on foreign ownership will fix the housing problems, nor am I really disagreeing that the primary issue is just a lack of housing, and of course banning foreign ownership is an easy political target because foreigners don't vote.

But just because foreign ownership is only 4% doesn't mean it can't have a sizable impact on home prices. Prices are always set at the margins, and since foreign ownership, especially in Vancouver, is really treated as a "safe place for cash" from foreign buyers, it can cause prices that are out of whack with the intended purpose of a home as being place to live.

Also, when your primary use of a house is simply a store of value to park your cash, you're likely going to want to put it into areas that are already supply constrained, because that means the risk of prices falling is lower.

Post reply on HN