Canada to ban foreigners from buying homes • Hacker News Board

Re: Canada to ban foreigners from buying homes

#171

Post by RandallBrown » Thu, Apr 07, 2022, 6:05 PM UTC

dboreham wrote: post #93

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.

It's very easy to build housing here in Montana but that hasn't stopped property prices from rising significantly.

Is it really easy to build more housing in a place like downtown Bozeman? Like if a developer wants to buy up a block of single family homes and replace it with a large condo building, can they do that?

Re: Canada to ban foreigners from buying homes

#172

Post by Ensorceled » Thu, Apr 07, 2022, 6:05 PM UTC

_aavaa_ wrote: post #162

"Some believe that secret bidding forces each potential buyer to offer as much as they can." ... Isn't that the whole point of an auction. Offer as much money as you can to get an thing that's worth that amount of money?

Secret bidding is designed to get the buyers bidding not just against other actual buyers and what you think they might have bid, but also against imaginary buyers that might also be out there.

In a hot market this is playing on the FOMO for people looking for a place to live.

Such shenanigans should never be allowed in basic necessities: shelter, food, water, medical care.

Re: Canada to ban foreigners from buying homes

#173

Post by twa999 » Thu, Apr 07, 2022, 6:05 PM UTC

good first step, but now ban corporate landlords if you're really serious.

Re: Canada to ban foreigners from buying homes

#174

Post by CountSessine » Thu, Apr 07, 2022, 6:07 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…

You're fighting scarcity. You still won't win the bidding war - it just won't be as one-sided.

Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically.

While you're at it, you could go after other wildly popular policies that lead to high housing prices, like the primary homeowner capital gains tax exemption (probably, by value, the biggest tax dodge in the industrialized world), and Canadian cities' extremely low property tax rates (0.3% of assessed value in Vancouver, for example).

Re: Canada to ban foreigners from buying homes

#175

Post by joshlemer » Thu, Apr 07, 2022, 6:07 PM UTC

boplicity wrote: post #99

______-_-______ wrote: post #62

Earlier quoted context omitted.

I mean... it has to eventually. If my country has a population of 50 million and I build 800 million homes, will investors keep buying them all at above market rates (read: more than I spent building them)? Then I can build 100 million more and keep collecting infinite money?

This can go on longer than you think; it leads to "ghost cities" -- huge areas full of empty housing bought by speculators. https://allthatsinteresting.com/chinese-ghost-cities

But I bet rent is pretty cheap in those cities no?

Re: Canada to ban foreigners from buying homes

#176

Post by tomatowurst » Thu, Apr 07, 2022, 6:08 PM UTC

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,…

You nailed it. You don't need to be in the Canadian real estate to realize that the most people coming to open houses are in fact local Canadians (also from other provinces) looking to move to the warmest part of the country or add another property or two to their portfolio.

The landlords that run the real estate holdings companies are mostly White. They buy up the properties, apartments, condos when they are cheap with the sole purpose of renting them out. Guess who influences local media and politicians. It's not some rich Chinese communist fu er dai they could care less.

The fact is that Canada isn't the all shining socialist paradise that outsiders make out to be. In fact places like Vancouver almost gets a pass when race issues are mentioned because its automatically chalked up as a "social liberal progressive city" compared to other American cities that often get thrown into the "shithole conservative counties"

Re: Canada to ban foreigners from buying homes

#177

Post by jefftk » Thu, Apr 07, 2022, 6:08 PM UTC

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.

> Not sure if buyer or seller is better off using them.

There's a theorem an auction design that says that, under some vaguely reasonable assumptions about bidder information, it doesn't matter what form you use for the auction. Open auction, sealed auction, even second price auction should all give the same winner and same final price: https://en.wikipedia.org/wiki/Vickrey_auction#:~:text=Revenu...

Re: Canada to ban foreigners from buying homes

#178

Post by glouwbug » Thu, Apr 07, 2022, 6:08 PM UTC

arcticbull wrote: post #131

AzzieElbab wrote: post #121

Earlier quoted context omitted.

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.

Yeah, about 70% of Canadians are homeowners (almost 15% higher homeownership rate than in the US). Ideally, they find a way to keep home price growth at/below inflation for a few years rather than actually pulling prices down directly. There's very little appetite for reducing the notional price since that 70% is broadly "most voters."

Doesn't the 70% ownership stat include those living with their parents? I have friends at 30 who still live with their parents.

Re: Canada to ban foreigners from buying homes

#179

Post by rs999gti » Thu, Apr 07, 2022, 6:09 PM UTC

Where will Chinese/Russian/Saudi millionaires and billionaires now offshore their wealth if they can't do it in Canadian real estate?

Re: Canada to ban foreigners from buying homes

#180

Post by Spooky23 » Thu, Apr 07, 2022, 6:09 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…

There's never a root reason.

But because real estate agents are middlemen in the process, there's an incentive in a hot market to not act as an honest broker.

When the market isn't "hot", a realtor has an interest to move quickly. When the market is hot, they have incentive to move their own listings so they get both sides of the commission. In my case circa 2005, I bid $50k over list via the broker who was managing my home sale. The selling broker "lost" the bid somehow and sold it for $20k over listing price.

7% of 20,000 is close to 3% of 50,000. But... I came to learn later that the selling agent targeted a particular religious community hard, and did a hard sell on insurance, inspection, and even attorneys to buyers, and frequently yielded another 3-5% based on "spiffs" from those providers.

All of these inefficiencies and bad behavior add up and inflate prices.