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Canada to ban foreigners from buying homes

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Re: Canada to ban foreigners from buying homes

#241

Post by tomatowurst »

seanmcdirmid wrote: post #202
tomatowurst wrote: post #170

Earlier quoted context omitted.

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 specul…

> 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.

Now this is why I love HN, its to see another fisherman!

I remember the 90s were depressing time for Vancouver. The economy was in complete slump and NDP took the fall for that.

Now the Chinese real estate market is incomplete shambles, people are in complete denial about that the Vancouver real estate market lags behind. Already the bubble has started to burst in Montreal, which I remember were the last to join the party!

Re: Canada to ban foreigners from buying homes

#242

Post by gregable »

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.

Folks here lean Bay Area, but I don't think Canada has the same issue of preventing construction.

For example, in Toronto, you get about 30-40k new housing starts a year in a city of 3M. https://ycharts.com/indicators/toronto_on_housing_starts. >1% / year isn't terrible.

Your statement isn't wrong, but I don't know how much it applies to Canada Real Estate particularly.

Re: Canada to ban foreigners from buying homes

#243

Post by tomatowurst »

Tiktaalik wrote: post #231
tomatowurst wrote: post #170

Earlier quoted context omitted.

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…

Lots of bigots have latched onto Vancouver housing issues as a way to further their anti-immigration views. It's gross. This doesn't mean though that there haven't been real issues with the Vancouver market that involve foreign wealth. Prior to the foreign buyers tax we were seeing condo developers explicitly opening up sales offices in foreign cities, explicitly marketing their condos as pied-a-terres. I understand…

[flagged]

Re: Canada to ban foreigners from buying homes

#244

Post by seanmcdirmid »

tomatowurst wrote: post #241
seanmcdirmid wrote: post #202

Earlier quoted context omitted.

> 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 specul…

> 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 ef…

> Now the Chinese real estate market is incomplete shambles

Chinese real estate prices are still pretty high. The government keeps things from bursting by controlling the real estate agents and their companies (owned mostly by red families, they just taper off on sales volume instead of letting prices fall). We will see how long they can keep juggling that. Which is why rich Chinese like to invest in western property markets in the first place: there is more liquidity in Vancouver and Toronto vs. Shanghai or Beijing.

BTW, I'm not from Vancouver, I just visited a lot in the 90s (when I was going to school in Seattle).

Re: Canada to ban foreigners from buying homes

#245

Post by dionidium »

Element_ wrote: post #209
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 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.

Yes, but crucially it's actually land that's valuable, not the housing that sits on it. The worry that allowing more density will tank home values is misguided. Land prices will keep going up as long as the land underneath the houses remains desirable. In fact, upzoning means more allowed uses, which means higher land values, which means more money for landowners.

There are two implications of this: 1) NIMBYs need to realize that allowing more housing isn't going to tank prices; if you're worried about prices tanking, you need not be; 2) YIMBYs need to realize that NIMBYs aren't exclusively motivated by greed. When they tell you that they don't want their neighborhood to densify they actually mean it. It's not covering for racism or greed. People genuinely don't want their neighborhoods to change.

There's hope in this. If the state forces upzoning, then people are going to grumble about it. And some of them won't be happy no matter what. But the average homeowner isn't going to be that upset about it once they realize there's money to be made.

Re: Canada to ban foreigners from buying homes

#246

Post by slg »

ipaddr wrote: post #221
slg wrote: post #189

Earlier quoted context omitted.

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…

Where are you building these houses in the protected Oak Ridges Moran? Building requires space to begin with.

Canada, famously a country with no free space. Even if the problem was a lack of space, building denser is always an option and none of the big Canadian cities are really overflowing due to population density.

Re: Canada to ban foreigners from buying homes

#247

Post by dfas23 »

RspecMAuthortah wrote: post #141

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/Vancouv…

Capital gains on primary residence is a non-starter. 65% of households in Canada own their homes.

It would be political suicide.

Re: Canada to ban foreigners from buying homes

#248

Post by dionidium »

actuator wrote: post #196
nly wrote: post #98

Earlier quoted context omitted.

We have a similar scheme in the UK, where you can save £4000/yr and get a 25% top-up from the government if you use the pot to buy your first home. Everything invested in this scheme is tax free: income and growth. You're completely right, it just drives up prices further... but they're vote winning policies and using these pots makes conveyencers a nice profit.

I don't think these drive up prices higher. LISA specifically mentions that it has to be your first house anywhere in the world, so it is targeted at home ownership. People speculating shouldn't be able to take advantage of this. Though LISA is pretty much useless in London. Good luck finding even a good 1 BHK under 450k inside Zone 4

That doesn't matter. It increases the amount the first-time buyer can bid from $x to $y, which just means the investor has to bid $y + 1 instead of $x + 1. Since $y is higher than $x all that's happened is prices have risen.

Re: Canada to ban foreigners from buying homes

#249

Post by VincentEvans »

johndfsgdgdfg wrote: post #161
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 live in Canada. In Canada foreign investment is a massive problem. This is NOT the only problem. But it is a big part of the problem. And arguably housing crisis in Canada started with foreign investment. Now domestic players and instituitional investors are also involved in housing market. Together there are enough parties involved not to let housing prices go down.

The problem with “capital” vs “foreign individuals looking to buy a home” in my mind - is that capital will find a way to camouflage as domestic capital if foreign capital is no longer allowed. It will move the money, register a subsidiary etc and buy a billion worth of housing while we are celebrating that a foreign family couldn’t buy a vacation home.

I am sure banning that wealthy family from China will do “something” to help alleviate the crisis, but I think putting restrictions on capital being used to buy up homes that aren’t primary-residence should be a priority and will have much larger effect.

And to be clear - as it stands with the situation in real estate being what it is right now, I am in favor of massive taxes on real estate investments that are to be used to finance affordable housing to be made available exclusively to first-time buyers and primary residents.

Re: Canada to ban foreigners from buying homes

#250

Post by kache_ »

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…

Ridiculous ageist policy. If you don't have a home and you're above 40, I'd argue you need the benefit even more.
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