Would've been better to just implement a land value tax.
How would this be any different to what we have now (a property tax)?
Canada to ban foreigners from buying homes
201–210 of 817 posts
Re: Canada to ban foreigners from buying homes
#202Earlier quoted context omitted.
> 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…
There is a huge crowd of local Canadian landlords that own or seek to own more than one property. This is the group that benefits from the narrative that Asian foreigners are buying up the local estate. The really affluent immigrant groups aren't buying multiple properties, they already have a great deal of income, and their properties are well outside most of what HN can afford and do not impact the condo market whi…
> They already taxed and stopped foreign buyers but the home prices in Vancouver keep going up as sales amongst local Canadians make up most of the volume.
These were always easy to work around: how many Chinese students come to Canada to study and just happen to have a few million dollars to spend on a house? The new proposal is also easy to work around, the Canadian government isn't serious about solving the speculation problem.
> In fact, without outside capital constantly coming in, the Vancouver real estate market is not sustainable. It literally is just another game of musical chairs, it is the news of some Chinese communist elite member buying a mansion in West Vancouver that gets local Canadians eager to own properties.
Perhaps. We already went through this in the 80s with the Japanese, and after the Japanese real estate bubble burst, Vancouver real estate was depressed for almost a decade (I remember the signs for condos starting at $100k in 1997! And no one was blaming the Hong Kongese for that at the time). China is just Japan 2.0 in this regard: after the Chinese property bubble bursts, Vancouver real estate will be heavily effected.
Re: Canada to ban foreigners from buying homes
#203At this point it seems largely to be a performative gesture so that the Feds can say they're doing something.
The two biggest jurisdictions where there has been evidence of notable foreign investment in housing has been Vancouver and Toronto, and foreign buyer taxes were already introduced in those places years and years ago.
Prices certainly haven't gone down, but these taxes have had substantial impact in changing the sort of products that house developers are making. There's been a significant pivot by developers toward building purpose built entirely rental apartments whereas prior to the taxes developers rarely built these, instead favouring condominiums (multi-unit buildings where the apts are sold).
Seems like the government should provide some sort of evidence that foreign buying remains a problem. They haven't to date though perhaps they'll drop some numbers as part of the budget.
Re: Canada to ban foreigners from buying homes
#204Earlier quoted context omitted.
Weird, I know the left likes to blame the rich, but I’ve never seen specifically rich foreigners. Also for real how can the voters (ie the average citizen) be the problem? The average citizen has no money and no political or regulatory power. The average citizen just exists in a system they have no control over and responds to incentives. Hoping that en mass people won’t do that is like politely asking a river to mov…
This is definitely a thing in Vancouver: https://www.npr.org/2019/06/05/726531803/vancouver-has-been-...
This is refreshing to see a left wing media writing on China. After COVID I pretty much lost trust in left wing media when it comes to China.
Re: Canada to ban foreigners from buying homes
#205> 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…
worth noting that Aus and NZ don't have blind bidding and have severe housing issues as well.
Re: Canada to ban foreigners from buying homes
#206At this point it seems largely to be a performative gesture so that the Feds can say they're doing something. The two biggest jurisdictions where there has been evidence of notable foreign investment in housing has been Vancouver and Toronto, and foreign buyer taxes were already introduced in those places years and years ago. Prices certainly haven't gone down, but these taxes have had substantial impact in changing…
Notable in Toronto is 3%
Re: Canada to ban foreigners from buying homes
#207Earlier quoted context omitted.
Well it's complicated. Foreign investors would be buying mansions that locals couldn't afford anyways. And the locals are just bidding against themselves for the cheaper stuff armed with low interest rates and bank of Ma and Pa. My statistic says that only 20% of RE is foreign owned.
That's not complicated, it's a second negative externality. Foreigners buying and not-occupying large amounts of valuable real estates drives up the cost of new housing, with no benefit the city, even if you squint really hard. A lack of new housing means high prices for the existing housing that the locals are "just bidding against themselves" on. It's a practice that should be taxed into oblivion.
Your argument makes no sense and its just playing into the xenophobic narrative.
There is nobody looking to buy a condo under $1MM mark competing to purchase the 8 digit figure homes in West Vancouver. The rich people selling and buying them aren't hurting at all.
Local Canadians are competing to expand their real estate portfolios and they aren't looking at homes in Langley because they sold their mansion in West Vancouver.
Re: Canada to ban foreigners from buying homes
#208Earlier 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?
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)
Are you claiming Blackstone would continue to buy houses at current prices even with a 16fold increase in supply? In 2008 the government artificially backstopped loans not a free market fwiw
Re: Canada to ban foreigners from buying homes
#209> 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 dumb and will likely add fuel to the fire and the politicians know this. Canada has like a 68% home ownership rate meaning actually doing something to lower housing prices would be political suicide.
Re: Canada to ban foreigners from buying homes
#210> 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 dumb.
It's an exersize in shifting money from relatively lower income renters who will never have enough money for a downpayment and who will never own a home, toward the relatively rich on the cusp of being able to buy.
Of course the main winner here is the home builder.