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

Canada to ban foreigners from buying homes

bloomberg.com

Post reply on HN
Print view View original

141–150 of 817 posts

Re: Canada to ban foreigners from buying homes

#141

Post by RspecMAuthortah »

The ruling liberal party is out of touch here like many other things.

Key problem here is that the inventory is super low, part of it is due to everyone wants to settle in places like Toronto/Montreal/Vancouver due to high job concentration along with NIMBY attitude among the existing suburbs. There is an inflow of 400k immigrants every year who mainly tend to settle in the big cities such as Toronto/Montreal/Vancouver, putting upward pressures. On top of that, the liberal government flat out does not want to impose tax free capital gain from primary home sales, and wide availability of credits with as low as 5% downpayment which can be used with equities from first, second, third homes.

This is just a political move to show they did something. The liberal party minister once said they don't want to entertain any crush on house prices because that would be detrimental to new home buyers. When buyers get the signal that Government has their back and there will never be a crush [1].

[1] https://www.cbc.ca/news/business/housing-canada-policy-marke...

https://www.thestar.com/politics/federal-election/2021/08/24...

Re: Canada to ban foreigners from buying homes

#142

Post by Ensorceled »

AzzieElbab wrote: post #121
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 people are missing the fact that for many Canadians values of their homes represent their live savings. So while homeownership remains high in Canada doing something substantial about re prices would ruin peoples lives.

We are at the point where foreign and Canadian speculation in housing is making housing totally unaffordable for the vast majority of Canadians. In a country of less than 40 million, it's pretty easy to swamp our markets.

We need to take speculation out of the marketplace.

I'd also like to see a ban on corporations purchasing private homes and significant tax increases on non principle residences.

Re: Canada to ban foreigners from buying homes

#144

Post by bennysomething »

slg wrote: post #128
richbell wrote: post #101

Earlier quoted context omitted.

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…

>I think that blind bidding is a bit of a scape-goat here: Almost everything mentioned in the various comments here is a scapegoat. These all might contribute a little to the escalating prices at the margins, but they are not the root cause. The root cause is that many capitalist societies have decided that purchasing a house is the most expensive and important investment most people will make in their lifetime. Ther…

I think the root cause is supply, demand, the salaries of buyers, interest rates and multiple of salary for mortgages permitted by law.

Re: Canada to ban foreigners from buying homes

#145

Post by thethimble »

bennysomething wrote: post #136
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…

This is an interesting question, what is worse for buyers, blind or open bids? Blinds bids prevent bidding wars. They use them in Scotland. Not sure if buyer or seller is better off using them.

Also another interesting dynamic is that bids can’t simply be compared by headline price. There’s so many other factors to consider in a bid: contingencies, time to close, reliance on a lender, likelihood of close, etc.

I don’t see how a blind system can take those factors into account to algorithmically select a single winning bid.

Re: Canada to ban foreigners from buying homes

#147

Post by seanmcdirmid »

VincentEvans wrote: post #7

I don’t know the specifics on Canadian real estate market and the specifics of the problems there, but based on my understanding of the problems facing your neighbors to the south - I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds,…

> I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners”

There is truth, however. The Wenzhou house wife property speculator trope has some basis in reality, and Chinese markets are already rife with massive speculation that has seeped into foreign markets popular for Chinese emigration (Toronto, Vancouver, and to a much lesser extent NYC and west cost American cities). You don't have to look hard to see the effects in Vancouver, where condo buildings and housing remain empty due to being seen as speculative assets.

American and some western European housing markets (e.g. UK) are a bit unique in that they haven't limited foreigners from buying and speculating on real estate. Whereas in China, many tier 1 and 2 cities have strict residency requirements before you can buy an apartment (but these also apply to Chinese via their hukou residency system).

Re: Canada to ban foreigners from buying homes

#148

Post by unsupp0rted »

incomingpain wrote: post #61

The data is public, less than 5% of homes are going to foreigners. Don't see how they even accomplish banning foreigners when there are free trade and free investment agreements. The problem is that bonds have negative yields. Retirement funds are forced into buying real estate, because housing is a safe investment right? The federal government knows this and knows they can't do anything. If they targeted retirement…

As far as I know, that oft-cited 5% number does not include "students" whose parents abroad suddenly gift them > $1 million in cash to buy one, two, or more properties.

Does the 5% stat include those kinds of situations, in which on paper it's not a "foreign investor" buying the property, but in reality it's just that?

Re: Canada to ban foreigners from buying homes

#150

Post by FpUser »

slg wrote: post #128
richbell wrote: post #101

Earlier quoted context omitted.

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…

>I think that blind bidding is a bit of a scape-goat here: Almost everything mentioned in the various comments here is a scapegoat. These all might contribute a little to the escalating prices at the margins, but they are not the root cause. The root cause is that many capitalist societies have decided that purchasing a house is the most expensive and important investment most people will make in their lifetime. Ther…

>"The prices need to go up. I don't understand why no one is willing to admit this."

No, rather somebody at the top needs to go down.

Post reply on HN