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Canada to ban foreigners from buying homes

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Re: Canada to ban foreigners from buying homes

#251

Post by dionidium »

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…

In other words, people will be forced to weigh options and tradeoffs, just like they have to do with everything else. If you want a SFH very near to an urban core, then you'll have to pay what that's actually worth relative to alternative uses for that land.

Re: Canada to ban foreigners from buying homes

#252

Post by LimaBearz »

CountSessine wrote: post #237
LimaBearz wrote: post #212

Earlier quoted context omitted.

Is it so far fetched to assume some realtors may be juicing the bidding to increase their own commission and to make their firm more uhh "prestigious" by being able to drive up the price for their own marketing purposes further down the line. Likewise if you dont know who you're bidding against, how do you even know the bidder is even real (foreign or not)? Transparency is good thing. While there may be some "scarcit…

Is it so far fetched to assume some realtors may be juicing the bidding to... Of course not, and I didn't say that I'm completely against reforming the real estate industry and the bidding process. But it won't fix expensive housing. It's all bullsh*t if it doesn't address scarcity. In 2016 we had had 10 years of 2% population growth in Vancouver and 1.2% housing stock growth and we wanted to blame foreign investors,…

Well I share your feelings toward the whole situation for sure but I'm not sure that just building more will do much of anything. As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets.

This outside competition detaches local prices from the local economy. Likewise the speculation sets an anchor(comp) for neighboring homes when they go to sell. One investor overpaying by say 100K.. well now next month if Average Joe wants to sell he can now ask the same or more. Rinse and repeat just a few times and you get to where we are today.

Re: Canada to ban foreigners from buying homes

#253

Post by hello_popppet »

joshlemer wrote: post #224
hello_popppet wrote: post #214

We all know that on an intuitive level, housing can never be affordable again in the West. At least in the areas that are currently out of reach for most people. The outlands, maybe, remain inhabitable but far removed from major cities. There’s no policy out there that will, by the time you wake up tomorrow, bridge the twenty-fold gap between what majority of people in the country make and what an apartment (never mi…

Nonsense. It is simple supply and demand. If we build on a scale not seen for generations, and eliminate tax benefits to owning (the principal residence tax exemption), then prices will come down.

That’s not going to happen. We have had this discussion on HN for a decade now. People are misled by “it’s simple, solve for X.”

Re: Canada to ban foreigners from buying homes

#255

Post by Tiktaalik »

bryanlarsen wrote: post #92
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.

Federal Liberals can't do anything about that, it's a provincial responsibility. The Ontario provincial Conservatives commissioned a report into how to make housing affordable, and then completely ignored almost everything it said. This summer, I'm voting for whoever promises to actually implement the Housing Affordability Task Force report.

It's only considered a provincial responsibility now because the Fed Liberals of the 1990s completely got out of housing involvement with their big austerity budgets of the era.

The Federal government was deeply involved in funding both for-profit and non-profit housing in the 1970s, the last era where Canada built a lot of housing.

Re: Canada to ban foreigners from buying homes

#256

Post by seanmcdirmid »

dionidium wrote: post #245
Element_ wrote: post #209

Earlier quoted context omitted.

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…

> NIMBYs need to realize that allowing more housing isn't going to tank prices. ... When they tell you that they don't want their neighborhood to densify they actually mean it.

Ya, a lot of NIMBYs don't care about housing prices since they aren't thinking about selling anytime soon, they just don't want the traffic and (perhaps) crime that goes along with density.

I get what they mean since I became home owner. I don't want my view to go away, and crime is already a problem (having some random person come into my drive way to check if my car doors are unlocked is quite unnerving when you can see it happen in real time through your cameras). I bought in an already upzoned area, however, so I'm more concerned if my son can get in the local choice school (which is heavily oversubscribed given the density).

Re: Canada to ban foreigners from buying homes

#257

Post by dionidium »

llbeansandrice wrote: post #226
davidw wrote: post #140

Earlier quoted context omitted.

> massive investments made by hedge funds, private capital, REITs I can't recommend this article enough on that subject: https://www.vox.com/22524829/wall-street-housing-market-blac... "The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that ar…

I feel like both of these things can be problems. If you view housing and ownership of your domicile as something that should be accessible to people, then housing necessarily cannot be viewed as an investment vehicle and large corporations, REITs, wallstreet, etc. need to be excluded so that more supply can be available to "correct" buyers. Limiting these groups does help on the supply-side. While it may not be the…

Yes, but one thing causes the other and it's not in the causal direction people intuitively think. Foreign speculators and investment firms like Blackrock are only entering the SFH market because supply constraints mean ever-higher prices. It's not like nobody thought to buy up houses 40 years ago. You don't have to be a genius to think of it. I can remember being a teenager and thinking, why don't big firms buy up all the housing and rent it back? The answer is that in most markets homes aren't naturally a good investment. It's a capital-intensive business and you end up with a depreciating asset, small margins, and lots of hassle.

But if supply gets constrained enough that prices complete detach from those fundamentals, then, sure, why not jump in? These investors are only in this market in the first place because of supply constraints, so it's not just that low supply is a more important factor than the investors -- the investors wouldn't even exist if not for the low supply!

Re: Canada to ban foreigners from buying homes

#258

Post by nemothekid »

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

>I don't think these drive up prices higher.

It's a demand-side policy to what is a supply-side problem. If the demand is already there, and you induce more demand by providing subsidies, prices will go up. If you want to reduce prices you must either increase supply (building housing) or decrease demand (remove someone, hopefully speculators, from the market).

However, given housing has become a defacto investment asset for Americans and Canadians, I don't see this issue ever being resolved without a political revolution or an economic depression.

Re: Canada to ban foreigners from buying homes

#259

Post by ryan93 »

ipaddr wrote: post #233
ryan93 wrote: post #137

Earlier quoted context omitted.

It wouldn’t ruin lives to reduce wealth that was stolen from people unable to buy homes. It would also help their kids. Something lots of modern homeowners don’t give a shit about at all.

Stolen from people unable to buy homes? Someone else's house that you wish to own does not make it stolen property from you. If you purchased a home that someone who had less money wanted is that stolen property? Can I have your computer, phone and your car. I don't have any money but you having something I want means you stole it.

Stolen as in you literally cant build a home on your own property because the government with guns wont allow you to. The price of homes is not remotely the product of fairness or any kind of free market.

Re: Canada to ban foreigners from buying homes

#260

Post by hello_popppet »

CountSessine wrote: post #237
LimaBearz wrote: post #212

Earlier quoted context omitted.

Is it so far fetched to assume some realtors may be juicing the bidding to increase their own commission and to make their firm more uhh "prestigious" by being able to drive up the price for their own marketing purposes further down the line. Likewise if you dont know who you're bidding against, how do you even know the bidder is even real (foreign or not)? Transparency is good thing. While there may be some "scarcit…

Is it so far fetched to assume some realtors may be juicing the bidding to... Of course not, and I didn't say that I'm completely against reforming the real estate industry and the bidding process. But it won't fix expensive housing. It's all bullsh*t if it doesn't address scarcity. In 2016 we had had 10 years of 2% population growth in Vancouver and 1.2% housing stock growth and we wanted to blame foreign investors,…

The people writing the laws are all about the scarcity, and they aren’t on HN and you can’t take any shots at them or tell them to f*ck off. They’ve gotten this far by diligently min maxing and if you think they are going to have a change of heart, you’re way off base.
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