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Canada to ban foreigners from buying homes

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Re: Canada to ban foreigners from buying homes

#301

Post by BurningFrog »

slg wrote: post #194
BurningFrog wrote: post #183

Earlier quoted context omitted.

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 c…

>This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. And what would you say is the cause for that? I would generally say it is people trying to protect their existing investments in housing.

Sure. The question is why they didn't do that until ~1970, which is when I think that era started.

It sounds crazy today, but the vastly poorer US society of 1960 supplied pretty everyone with an indoor place to sleep and call home.

Re: Canada to ban foreigners from buying homes

#302

Post by SOLAR_FIELDS »

Spooky23 wrote: post #180
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…

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…

For the record dual agency is actually illegal in some places: https://www.homelight.com/blog/dual-agency-is-illegal-in-som...

Though I will point out that in most of the jurisdictions in the link provided, there's nothing that prevents your scenario - a third party offer is turned down due to the dual agency bid being favored by the sellers because they never received your bid. Only in Colorado, Florida or Kansas is it explicitly prohibited. But at least if it was in one of the other states that requires disclosure (Alaska, Maryland, Texas, Vermont, Wyoming) the sellers would have at least been aware of a possible conflict of interest and may not have entered into a contract because of it.

Re: Canada to ban foreigners from buying homes

#303

Post by josho »

jackyinger wrote: post #185
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…

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 t…

If you have a good realtor they will confirm the competing offer exists.

Eg. my realtor called up the selling realtor and asked for the name of the realtor that submitted a competing offer. My realtor called the competing realtor to confirm they had a client that submitted an offer.

Yes, of course the two other realtors could conspire together. But, now instead of one dodgy realtor you have 2 and the probabilities go down further.

Is there fraud, I'm sure there is. But, I don't think it's a significant factor in the market.

Re: Canada to ban foreigners from buying homes

#304

Post by seanmcdirmid »

BurningFrog wrote: post #301
slg wrote: post #194

Earlier quoted context omitted.

>This is not the result of a hushed down societal decision. The refusal to allow housing construction the cause of the ever increasing prices. And what would you say is the cause for that? I would generally say it is people trying to protect their existing investments in housing.

Sure. The question is why they didn't do that until ~1970, which is when I think that era started. It sounds crazy today, but the vastly poorer US society of 1960 supplied pretty everyone with an indoor place to sleep and call home.

That isn't true. The housing projects of Lyndon Johnson's Great Society poverty reduction efforts didn't start until mid decade. Before that, you could infer that there was an actual need for it (even though it ultimately failed).

Re: Canada to ban foreigners from buying homes

#305

Post by nemo44x »

rsync wrote: post #287
macspoofing wrote: post #163

Earlier quoted context omitted.

>This is such a huge deal. Is it though? I chatted with someone from Australia which has open bidding and you know what .. houses still went way over reserve. At the end of the day, if you have 20+ offers on a house, you're not getting that house without destroying your budget, no matter how you set up the bid system. The common sense change I wanted to see implemented was to prevent the waiving of a home inspection…

Fun fact: you can waive your inspection contingency … and then still go inspect the house. Just bring your inspector along to a showing or open house, etc. Owners won’t even be there.

You can inspect certain things. But you won't be inspecting to see if there's an oil tank buried in the yard, the quality of the chimney, if there's any radiation in the basement, and plenty of other things.

But yes, you can probably inspect the construction quality and foundation pretty easily, a visual inspection of the roof and siding, and if you care the quality and age of utility appliances. You can also pull the permits if you're really interested before placing a bid. You can probably scan for termite damage, etc.

A decent inspection is a 4 hour job or longer generally in my experience.

Re: Canada to ban foreigners from buying homes

#306

Post by orangecat »

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…

Policies that forbid landowners from building housing are central planning and the opposite of capitalism.

That aside, this is absolutely correct. It's constantly irritating to hear politicians praise "strong housing markets" when "strong" means "unaffordable if you're not already wealthy".

Re: Canada to ban foreigners from buying homes

#307

Post by palijer »

rsync wrote: post #266

The article only speaks of small, single family properties in urban areas. What about farmland or ranch property or commercial buildings?

The day cities start starving and devolve into anarchy is the day we see more serious legislation introduced to improve life for farmers.

Re: Canada to ban foreigners from buying homes

#308

Post by JacobThreeThree »

slg wrote: post #246
ipaddr wrote: post #221

Earlier quoted context omitted.

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.

You kid, but 90% of land in Canada is crown land. Nobody is allowed to own it.

Re: Canada to ban foreigners from buying homes

#309

Post by techsupporter »

edgyquant wrote: post #295
michael1999 wrote: post #282

Earlier quoted context omitted.

Canada is a big country. But immigration goes where the jobs are, and those are concentrated in 3-5 large cities which are hitting the limits of sprawl (congested highway commute time) and geography (water and mountains). Densification is unpopular with existing municipal voters, and bankrupting CPP would be unpopular with federal voters.

Can they not move to nearby cities and commute?

No, that's what the person you replied to mean when they wrote:

> hitting the limits of sprawl (congested highway commute time)

There's only so far you can bus, train, drive, bike, walk, seaplane, helicopter, hyperloop, or transporter in to go to work. Canadian cities are, just like cities in the US, hitting this limit rather aggressively.

In cities where sprawl isn't physically prohibitive, like Calgary or Toronto, the upper bound of "this shit ain't worth it" for time and money is a limiting factor. I know someone who commutes from Kitchener to Toronto on GO, so they don't even have to put up with driving, and they're debating moving back home to Winnipeg for a 40% salary cut just to not have to put up with it any more.

Remote work might help with this but even there, you have people who are moving "a little further out" but not leaving the region because they want to stay nearby for other reasons (or because they're not entirely convinced that full remote is actually on the table long term).

Re: Canada to ban foreigners from buying homes

#310

Post by Majromax »

edgyquant wrote: post #295
michael1999 wrote: post #282

Earlier quoted context omitted.

Canada is a big country. But immigration goes where the jobs are, and those are concentrated in 3-5 large cities which are hitting the limits of sprawl (congested highway commute time) and geography (water and mountains). Densification is unpopular with existing municipal voters, and bankrupting CPP would be unpopular with federal voters.

Can they not move to nearby cities and commute?

That's generally happened. House prices have notably increased not just in major cities, but also in smaller municipalities within commuting distances of Toronto, Vancouver, Ottawa, and Montreal.

Truly "cheap" housing is historically limited to rural areas far outside the traditional commuting area of the big cities, but the covid shock has put even that in question through remote work. Even though a small number of people in absolute terms are moving to rural areas (with sufficient Internet infrastructure, etc), that still can represent a large relative demand increase.

Some of this will probably shake out over the next few years as construction catches up where it can, but that's cold comfort to younger families on the market today.

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