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Canada to ban foreigners from buying homes

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Re: Canada to ban foreigners from buying homes

#361

Post by hello_moto »

stjohnswarts wrote: post #285
CountSessine wrote: post #174

Earlier quoted context omitted.

You're fighting scarcity. You still won't win the bidding war - it just won't be as one-sided. Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically. While yo…

If you cut off foreign buyers then you absolutely will have cut out some competition for the purchase so I don'd see how you can possibly say what you're saying? I mean it's a basic economics principle.

Might not move the needle.

Plus there are a few stories of rich int'l students eventually becoming PR holder and get their monies from parents.

Re: Canada to ban foreigners from buying homes

#362

Post by InitialBP »

ethbr0 wrote: post #126
sonicggg wrote: post #115

Earlier quoted context omitted.

I live in Canada, and the real estate business is such a mafia. They are leeches, and I'm not sure how much value these real estate agents are providing. It baffles me how this industry has not yet been disrupted by an outsider, like Uber did with taxis. I still remember when taxi licenses costed a fortune, and you had the exact same leeches exploiting it. They were seen as an investment in some cities, like NYC. I k…

In the case of real estate, the entrenched transaction businesses control both supply and demand, and hence are more able to block new entrants. In the case of Uber, supply (people who own vehicles) was effectively unlimited and independent.

I would add that Uber has traditionally operated at a loss, and on top of that they don't provide the same level of benefits and payment to their "contractors".(whether or not they should is a different question)

While they did disrupt the taxi market, they are also setting false expectations about what sort of model is viable in the space since _Eventually_ they will need to bring in revenue or could potentially be forced to pay their drivers more which would lead to a big hike in prices and would probably have an impact on how it functions now.

Re: Canada to ban foreigners from buying homes

#363

Post by jl2718 »

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.

Maybe stop government mortgage insurance. It’s nothing but public liability for private gains.

Re: Canada to ban foreigners from buying homes

#364

Post by leetcrew »

tomatowurst wrote: post #207
arrosenberg wrote: post #138

Earlier quoted context omitted.

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 Va…

housing markets aren't disjoint this way. people will consider moving up or down a couple tiers if it makes financial sense (or they don't have a choice). if the market for mansions is particularly tight, you will see rich people start buying condos instead, driving up prices in the midrange. some professionals that would otherwise be targeting those condos will be forced to consider more marginal homes in the low end, moving the price there as well. the same thing can happen in reverse if demand dries up at the high end, but you don't see that as often.

Re: Canada to ban foreigners from buying homes

#365

Post by cwkoss »

beebmam wrote: post #47

Why can't we increase property taxes for businesses that own homes? And, for individuals who own more than, let's say, two homes?

Put an exponent in the property tax calculation based on number of properties owned (by individual or business) within a jurisdiction.

ex. taxes are [rate * appraisedValue * 1.1 ^ numPropertiesOwned]

Needs some sort of mechanism to prevent corporations from spinning up subsidiaries to use as a tax shield in these calculations though.

Re: Canada to ban foreigners from buying homes

#366

Post by slg »

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.

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

I'm American so I can't speak to the specifics of what happened in Canada, but I imagine it is similar to what happened in the US.

It is all related to the post-war suburbanization of the population. In the early part of the 20th century, homeownership rates in the US were in the 40% range. By the 70s it jumped to roughly 65%. Large swaths of the population went from being lifelong renters in cities to buying single family homes in the suburbs. Owning a home became a symbol of American middle-class life and the government both supported and encouraged this transition. Obviously a constituency that makes up 65% of the population is going to see more political power than one that only makes up 45% of the population.

Re: Canada to ban foreigners from buying homes

#367

Post by [deleted] »

CountSessine wrote: post #174
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…

You're fighting scarcity. You still won't win the bidding war - it just won't be as one-sided. Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically. While yo…

[deleted]

Re: Canada to ban foreigners from buying homes

#368

Post by crooked-v »

boplicity wrote: post #99
______-_-______ wrote: post #62

Earlier 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?

This can go on longer than you think; it leads to "ghost cities" -- huge areas full of empty housing bought by speculators. https://allthatsinteresting.com/chinese-ghost-cities

Those "ghost cities" have been fairly consistently been filling in over time. Some of the originally-reported ones are by now more or less completely populated and are now just... cities.

Re: Canada to ban foreigners from buying homes

#369

Post by jl2718 »

joshlemer wrote: post #164

We need to end or put limits on the Primary Residence Capital Gains Tax Exemption which is uncapped in Canada, unlike the cap of 200k in USA. It is unfair to renters and it is leading to insane housing prices. It is unfair to renters because renters do not have an equivalent 100%, completely unlimited tax-free investment vehicle. We have Tax-Free Savings Accounts, limited to ~$5k contribution per year, and we have RR…

What exact problem are you trying to solve? I can think of a lot that this would cause.

Analyze any specific tax policy deeply enough and you’ll find that there is no way to fix something that starts off as unnecessary and harmful.

Re: Canada to ban foreigners from buying homes

#370

Post by CountSessine »

standeven wrote: post #313
CountSessine wrote: post #237

Earlier quoted context omitted.

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,…

I agree that scarcity is the main issue, but how do you address it in a city like Vancouver? There’s no more land and downtown is dense. Make artificial islands? Deforest the mountainsides and build on 40 degree slopes? Replace local farms with subdivisions?

As a developer, why can't I buy 5 or 6 detached houses, tear them down, and build row-houses/town-houses on the site? I could house 3x as many families and charge a lot more than 1/3 the price for those homes. Why can't I do that? That is an unalloyed good in 2022 with the benchmark home price in Vancouver approaching $2 million. It would make me money and it would be a tremendous social good.

I can't do it because it's illegal, that's why. And I would have to go to city council to have them change the law (rezone the land). And the neighbors will campaign against me and argue against density. I own the land - I paid good money for it and it's mine in every sense of the word, but the neighbors will argue that their preferences and whims outweigh both my property rights and the rights of other Canadians to have a home.

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