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

181–190 of 817 posts

Re: Canada to ban foreigners from buying homes

#181

Post by b3morales »

______-_-______ wrote: post #62
dsnr wrote: post #25

Earlier quoted context omitted.

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.

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?

Yes, because they can keep shifting their imaginary money around and hedging their risk on paper until someone notices the music has stopped and the govt/rest of us are left holding the bag of turds again. (Cf. 2008)

Re: Canada to ban foreigners from buying homes

#182

Post by biomcgary »

closeparen wrote: post #124
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…

It is not actually possible to increase the supply of good suburbia. The virtue of a suburban home is to be on a large plot of land with low-intensity neighbors and convenient vehicle access to places, and this genuinely can’t scale very far. Even if you have infinitely much land, you will never build enough roads or lanes. We can increase the supply of other things which are also called “housing” but are fundamental…

One large reason for high priced real estate in some places is the geographically uneven distribution of disposable income. Historically, people moved to cities because the jobs were there (i.e., physical factories that had to exchange physical goods).

No commuting for work = much less need for roads. If commuting and working in a centralized location is viewed as exceptional rather than normal, society could easily switch to lower density living, which is highly beneficial to most mammalian species (reduced stress, reduced aggression).

If the most lucrative information-age jobs (tech, finance) become remote-first (or better, remote-only) and dominated by shape rotators, people will be able to move away from cities (and take the money with them). Only wordcels, who grift on social interactions, really need high density humanity to thrive.

Re: Canada to ban foreigners from buying homes

#183

Post by BurningFrog »

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 almost agree, but I think you've got the causality backwards.

> The end result is we have collectively refused to build enough housing to keep prices stable or decreasing

This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. As so often, it comes down to basic microeconomics: If you limit supply while demand rises, prices will constantly go up.

I do agree that foreigners, like anyone else, buy homes as speculation because they're guaranteed to increase in value.

Re: Canada to ban foreigners from buying homes

#184

Post by katbyte »

bennysomething wrote: post #144
slg wrote: post #128

Earlier quoted context omitted.

>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.

which are all influenced at every level by the desire (need?) to keep housing prices high and increasing..

Re: Canada to ban foreigners from buying homes

#185

Post by jackyinger »

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…

The lack of transparency makes these deals ripe for fraud. I have heard anecdotes from people I trust of their realtor offering to generate a fake offer (by soliciting one from a third party) to drive up the escalation clause.

Where there is money and little oversight there is bound to be fraud. It grinds my gears to think about this because I bought a house and the escalation clause went to the maximum. Now do you think that was purely coincidence?

Re: Canada to ban foreigners from buying homes

#186

Post by dane-pgp »

knownjorbist wrote: post #94

Would've been better to just implement a land value tax.

To avoid the problem of the tax just being passed on to renters, you would presumably make the tax "progressive" (i.e. marginal), or only apply after a certain threshold, right?

I think that one mathematically appealing structure for such a tax is to work out what the median (inhabited, primary) property size is (including garden etc.) and set that as the tax-free threshold. Any land tax paid by the top half can then be distributed to those in the lower half.

This would be similar to (and is based on the same logic as) Thomas Paine's proposal for what we would now call a Universal Basic Income.

https://basicincometoday.com/thomas-paines-centuries-old-arg...

Re: Canada to ban foreigners from buying homes

#187

Post by ryan93 »

tomatowurst wrote: post #151
eptcyka wrote: post #91

Earlier quoted context omitted.

Real estate is always a good investment (unfortunately), and capital flight from Asia is not a joke. It's happening in Europe too. Personally, I think governments in well developed countries should do their best to dissuade investment in housing as a financial instrument. Why should I compete with a millionaire, be it local or foreign, for a decent house to live in a city I've lived in for years?

Quoted post unavailable.

There is no law against Canadian Asians buying houses. The law applies to foreign Arabs too. Most people who don’t want foreign buying have never wanted foreign buying from anywhere!

Re: Canada to ban foreigners from buying homes

#189

Post by slg »

bennysomething wrote: post #144
slg wrote: post #128

Earlier quoted context omitted.

>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.

Those are downstream effects of the problem with housing being an investment.

We don't want prices to go down so we don't build enough supply. The policies that make housing a good investment increase demand from speculators and investors above the natural need for housing. There are all sorts of subsidies that exist to give people more money to buy housing instead of trying to make housing actually cheaper. Interest rates are a lever the government uses to support its political goals which includes increasing housing values. It all comes back to the same root cause.

Re: Canada to ban foreigners from buying homes

#190

Post by [deleted] »

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…

[deleted]
Post reply on HN