Justin Trudeau Vows Two-Year Ban on Foreign Home Buyers in Canada Election • Hacker News Board

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

#61

Post by lwansbrough » Sat, Sep 18, 2021, 2:58 AM UTC

baybal2 wrote: post #27

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 lived in Vancouver for 6 years. > Nice, this will curb the unacceptably high 4% of home buyers who are foreign who are definitely responsible for driving the market prices up. These 4% are driving up prices of the most elite real estate, and crowding out rich elite upper-middle-class Canadians, who invest in real estate, and live in big cities (read Toronto, and Vancouver.) That's the real problem for them. So, the…

My whole post was being sarcastic. None of those groups are responsible for the vast majority of demand in this country, it is people who have been living here their whole lives like myself who are priced out simply because there isn't supply for them. The population has grown but the housing has not. And we're doing nothing to meet that demand with additional supply, just slightly cutting down the demand, which doesn't do anything to address the underlying problem.

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

#62

Post by funksta » Sat, Sep 18, 2021, 3:01 AM UTC

jseliger wrote: post #23

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-…

The housing discourse has long since reached the point of satire: Canada will try absolutely anything to lower the price of housing except build more housing: https://www.mcsweeneys.net/articles/i-will-do-anything-to-en... . Meanwhile, https://www.worksinprogress.co/issue/the-housing-theory-of-e...

> Canada will try absolutely anything to lower the price of housing

This is absolutely not true. Canadian policymakers are willing to do almost nothing that could reduce housing prices– instead they try to induce prospective buyers to take on even more debt under the guise of "making housing affordable". Just look at every major party's housing platform in the current election– besides some very hand-wavy notions of bringing on more supply, and the LPC's plan to eliminate blind bidding, the "solutions" are almost universally focused on further stoking demand

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

#63

Post by lwansbrough » Sat, Sep 18, 2021, 3:05 AM UTC

hn_throwaway_99 wrote: post #40

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 owners…

> 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.

> you're likely going to want to put it into areas that are already supply constrained

These are the primary arguments for building more. Build enough and you will drive prices down, and with it the reputation of Vancouver's housing market as a safe store of value.

Housing can be cheap and not seen as a substantially valuable investment if we simply build to meet demand. Densely of course - something other than 20+ floor apartment buildings would be nice.

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

#64

Post by gorgonzolachz » Sat, Sep 18, 2021, 3:15 AM UTC

lwansbrough wrote: post #63

hn_throwaway_99 wrote: post #40

Earlier quoted context omitted.

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 owners…

> 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. > you're likely going to want to put it into areas that are already supply constrained These are the primary arguments for building more. Build enough and you will drive prices down, and with it the reputation of Vancouver's housing market as a safe…

And this is where the NIMBYs come in; people who bought in years or even decades ago, who want to see prices rise to astronomical levels so they can retire off of their home's equity. Any proposal to do this will absolutely be shot down, until the voting public outnumbers the homeowners - which may never happen, given current voting trends.

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

#65

Post by sevilo » Sat, Sep 18, 2021, 3:25 AM UTC

Justin Trudeau has been in power for 6 years and now he finally wants to address a problem that contributes to a percentage as large as 4% of the real estate market. This man will seriously say whatever feel good crap people wanna hear but don’t actually address problems just to hold onto power.

And yet the amount of support he somehow still has in Canada makes me feel reassured it was a good decision to leave, people in this country will vote for whoever’s most woke even if their actions tell the exact opposite of what they said they stand for.

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

#66

Post by gruez » Sat, Sep 18, 2021, 3:45 AM UTC

klyrs wrote: post #59

jseliger wrote: post #23

Earlier quoted context omitted.

The housing discourse has long since reached the point of satire: Canada will try absolutely anything to lower the price of housing except build more housing: https://www.mcsweeneys.net/articles/i-will-do-anything-to-en... . Meanwhile, https://www.worksinprogress.co/issue/the-housing-theory-of-e...

It's even worse than that. Developers are building huge skyscrapers full of housing. Problem is, it's all luxury housing, well above average prices for comparable square footage. Then, people who don't want that luxury will end up stretching their budgets to buy it due to a lack of options in their price range. Developers have huge influence on local politics, so I don't really see a way to escape this.

> Problem is, it's all luxury housing, well above average prices for comparable square footage

but that's fine right? The people rich people moving into the "luxury" apartments will free up the "nice" apartments for middle class people to move into, who will subsequently free up the "okay" apartments. Building $30k cars also doesn't help the college student/single parent who has a budget of <$3000, yet we don't try to outlaw those cars or mandate "affordable" cars because "people who don't want that luxury will end up stretching their budgets to buy it due to a lack of options in their price range".

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

#67

Post by jseliger » Sat, Sep 18, 2021, 4:07 AM UTC

klyrs wrote: post #59

jseliger wrote: post #23

Earlier quoted context omitted.

The housing discourse has long since reached the point of satire: Canada will try absolutely anything to lower the price of housing except build more housing: https://www.mcsweeneys.net/articles/i-will-do-anything-to-en... . Meanwhile, https://www.worksinprogress.co/issue/the-housing-theory-of-e...

It's even worse than that. Developers are building huge skyscrapers full of housing. Problem is, it's all luxury housing, well above average prices for comparable square footage. Then, people who don't want that luxury will end up stretching their budgets to buy it due to a lack of options in their price range. Developers have huge influence on local politics, so I don't really see a way to escape this.

"Luxury" housing helps low-income renters: https://fullstackeconomics.com/how-luxury-apartment-building..., as one would expect from supply increases.

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

#68

Post by ksaj » Sat, Sep 18, 2021, 4:11 AM UTC

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-…

It's a more nuanced problem than that. This is how I've understood the problem when discussing foreign ownership specifically (don't shoot the messenger please!):

Our housing prices are wildly high, partially or even significantly, because of very wealthy foreign purchasers who often don't even live in the homes they buy. They jack the price up and sell them to other very wealthy people from their respective home countries. Rinse and repeat. It affects the prices of homes all around the property in tandem.

Basically those wealthy people who aren't contributing to the economy outside the house they bought, are making housing outrageously expensive for the people who do live here, because regular people can't financially compete with the wealthy purchasers that see the home as nothing more than a money maker to trade in overseas properties stacking.

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

#69

Post by [deleted] » Sat, Sep 18, 2021, 4:44 AM UTC

dontparticipate wrote: post #55

mixmastamyk wrote: post #34

Earlier quoted context omitted.

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.

As an economist, I would strongly object to the idea that data isn't needed to prove points. I've heard about the particular case of the Vancouver market being popular with overseas buyers, but that doesn't absolve anyone from quantifying it. The Vancouver specific reaction has been the "Empty Homes Tax" https://vancouver.ca/home-property-development/empty-homes-t... And according to Vancouver again, while the tax di…

[deleted]

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

#70

Post by abandonliberty » Sat, Sep 18, 2021, 5:36 AM UTC

funksta wrote: post #62

jseliger wrote: post #23

Earlier quoted context omitted.

The housing discourse has long since reached the point of satire: Canada will try absolutely anything to lower the price of housing except build more housing: https://www.mcsweeneys.net/articles/i-will-do-anything-to-en... . Meanwhile, https://www.worksinprogress.co/issue/the-housing-theory-of-e...

> Canada will try absolutely anything to lower the price of housing This is absolutely not true. Canadian policymakers are willing to do almost nothing that could reduce housing prices– instead they try to induce prospective buyers to take on even more debt under the guise of "making housing affordable". Just look at every major party's housing platform in the current election– besides some very hand-wavy notions of…

A drop of property values would hurt a lot of voters and wealthy influential investors / campaign donors.

Same thing for appropriately taxing seniors living in now multi-million dollar hovels.