Canada to ban foreigners from buying homes • Hacker News Board

Re: Canada to ban foreigners from buying homes

#111

Post by CPLX » Thu, Apr 07, 2022, 5:31 PM UTC

dsnr wrote: post #25

mperham wrote: post #20

Liberal governments will do everything but the one thing that will solve the problem: make it much, much easier to actually build more housing. Everything else is just pointless busywork.

This is not really guaranteed to solve the problem. It will only be a part of the solution. In many countries, including Europe, new properties are quickly snatched by investment companies that have much easier access to capital than private individuals and can easily afford to pay above market prices. People shouldn’t really have to compete with companies or “investors” on the housing market.

It shouldn't matter all that much. Rented homes are an excellent (not perfect but very close) substitute for purchased homes.

People don't like to rent because of instability or unpredictability of pricing. But a large and growing long term rental market where it's straightforward to find a new place and nobody has an incentive to kick you out or raise your rent is really just fine.

You might be thinking, right but if you rent you'd be giving up the ability to make all that money from appreciation that homebuyers get BUT THAT IS ACTUALLY THE PROBLEM WITH THE ENTIRE SYSTEM because you can't have affordable housing and also have housing as a guaranteed investment that always builds wealth the two concepts are fundamentally incompatible with each other and when you get that you're really starting to understand the problem.

Re: Canada to ban foreigners from buying homes

#112

Post by [deleted] » Thu, Apr 07, 2022, 5:31 PM UTC

ameminator wrote: post #77

bogota wrote: post #54

Earlier quoted context omitted.

Or we could have seen this coming a mile away and built more houses and reduced the idiocy of city zoning. But yeah it’s the immigrants fault. Lets reduce immigration while we are facing a labor shortage.

Well, it's not the immigrants' fault - it's the government's fault. At the end of the day, this confluence of circumstances is its responsibility. The combination of low interest rates, no expansive public transport projects, no action on money-laundering, hurdles in supply (as you mentioned) - and yes, expansive immigration policies (Canada had the highest population growth in the G7, mostly due to immigration [0]).…

[deleted]

Re: Canada to ban foreigners from buying homes

#113

Post by imposterr » Thu, Apr 07, 2022, 5:33 PM UTC

richbell wrote: post #101

boplicity wrote: post #88

> During last year’s election campaign, Trudeau’s party also proposed a ban on “blind bidding” for houses -- the prevailing system by which offers are kept secret when someone is auctioning a home. This is such a huge deal. Anyone who has had to go through the process of buying a home through a bidding war knows how unfair and one-sided this process is. It take a high-pressure emotional situation, and gives all of th…

I think that blind bidding is a bit of a scape-goat here: the problem isn't that the bidding process is blind per se, it's the complete lack of transparency. Once a house is sold, the price that it sold for AND all bids should be made a matter of public record — accessible without having to pay a ridiculous amount of money to view. Not to mention the ridiculous commission fees for realtors, and their well-known pract…

In some provinces, the sold data is at least available. It definitely helps get a feel for what one can expect to pay in a given neighborhood.

Re: Canada to ban foreigners from buying homes

#114

Post by JoshTriplett » Thu, Apr 07, 2022, 5:33 PM UTC

dsnr wrote: post #25

mperham wrote: post #20

Liberal governments will do everything but the one thing that will solve the problem: make it much, much easier to actually build more housing. Everything else is just pointless busywork.

This is not really guaranteed to solve the problem. It will only be a part of the solution. In many countries, including Europe, new properties are quickly snatched by investment companies that have much easier access to capital than private individuals and can easily afford to pay above market prices. People shouldn’t really have to compete with companies or “investors” on the housing market.

Investors in real estate make money by either selling or renting; either way, more homes still means lower prices. Keep providing more supply until it meets demand.

Re: Canada to ban foreigners from buying homes

#115

Post by sonicggg » Thu, Apr 07, 2022, 5:34 PM UTC

boplicity wrote: post #88

> During last year’s election campaign, Trudeau’s party also proposed a ban on “blind bidding” for houses -- the prevailing system by which offers are kept secret when someone is auctioning a home. This is such a huge deal. Anyone who has had to go through the process of buying a home through a bidding war knows how unfair and one-sided this process is. It take a high-pressure emotional situation, and gives all of th…

I live in Canada, and the real estate business is such a mafia. They are leeches, and I'm not sure how much value these real estate agents are providing.

It baffles me how this industry has not yet been disrupted by an outsider, like Uber did with taxis. I still remember when taxi licenses costed a fortune, and you had the exact same leeches exploiting it. They were seen as an investment in some cities, like NYC.

I know there are useless regulations that keep these agents being needed, but so there were with taxis as well, and Uber did not give a crap.

Re: Canada to ban foreigners from buying homes

#116

Post by nly » Thu, Apr 07, 2022, 5:35 PM UTC

Here in the UK I've been saying for years that we should be taxing or banning sales to anyone who isn't a full-time owner-occupier.

The situation we have here with average property prices, reaching 10x median income, is simply untenable.

Re: Canada to ban foreigners from buying homes

#117

Post by jachee » Thu, Apr 07, 2022, 5:36 PM UTC

lucidguppy wrote: post #30

hengri wrote: post #23

Earlier quoted context omitted.

It's low interest rates to blame

Its zoning and nimbyism.

It’s treating basic human needs as financial instruments.

Re: Canada to ban foreigners from buying homes

#118

Post by ethbr0 » Thu, Apr 07, 2022, 5:36 PM UTC

boplicity wrote: post #88

> During last year’s election campaign, Trudeau’s party also proposed a ban on “blind bidding” for houses -- the prevailing system by which offers are kept secret when someone is auctioning a home. This is such a huge deal. Anyone who has had to go through the process of buying a home through a bidding war knows how unfair and one-sided this process is. It take a high-pressure emotional situation, and gives all of th…

As someone who recently bid in a hot property market, I'm a huge fan of common sense bans and unwaivable rights.

In a competitive market, filled with buyers of questionable sophistication, i.e. residential real estate, everyone gets to the bottom of maximally-waived, minimal-safeguards pretty quickly to make a competitive offer. And ultimately, that isn't good for anyone, sellers included.

Better to explicitly prohibit the stupidest behavior and require some safeguards. E.g. non-waivable 72 hour cooling off period. Then everyone can compete within those bounds however they want.

Re: Canada to ban foreigners from buying homes

#119

Post by paulgb » Thu, Apr 07, 2022, 5:37 PM UTC

Maximus9000 wrote: post #109

paulgb wrote: post #86

> Freeland will introduce legislation that allows Canadians under the age of 40 to save as much as C$40,000 ($31,900) for a home downpayment within a new tax-exempt vehicle, the person said. I'm not an economist but this seems pretty dumb? To the extent that it helps someone afford a home that they can save tax-free for it, the same is true of some of the people they're bidding against, driving up the price they ulti…

> the same is true of some of the people they're bidding against I think you're assuming that everyone bidding will be a first time home buyer under 40 years old. While that may be the bulk of buyers, there are also many investors also in the mix who are buying up houses to rent/flip them.

A house goes to the highest bidder, so if you decrease the cost of capital for some participants you increase the price for everyone. I agree that it’s not a perfect transfer, but I suspect it’s a pretty good one, on the assumption that first-time buyers represent most of the capital entering the system. E.g. someone buying a first house for $500k puts $500k in the market, whereas someone moving from a $500k house to a $600k house is only bringing $100k of new capital into the system.

I realize that people also leave the system, so maybe my logic is flawed.

Re: Canada to ban foreigners from buying homes

#120

Post by jimmydeans » Thu, Apr 07, 2022, 5:37 PM UTC

No one wants to talk about the elephant in the room.

Canada has 'housing' but no one wants to live in anything other than a detached house close to the city.

Lots of condos, semi-detached, and townhouse, however no one wants them because you have to have a detached home to have made it in life.

I can't remember in my twenties obsessively wanting a detached house.

GenX is buying up all the houses after selling their condos and townhouse they bought as first homes.

Same people who's first car needs to be a 2022 BMW.