Canada to ban foreigners from buying homes • Hacker News Board

Re: Canada to ban foreigners from buying homes

#371

Post by wk_end » Thu, Apr 07, 2022, 8:15 PM UTC

52-6F-62 wrote: post #328

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.

Densification is absolutely not unpopular with municipal voters! My current city, Hamilton, is currently fighting with the Ontario government over this matter. The mayor is a regular feature on the local news and speaks to that often. Their major push is for more density and resources for urban development. The provincial government has pushed for developing in Ontario's green belt and watershed instead. They've face…

Everywhere is different. Hamilton may be in favour of densification - I wouldn’t know - but even in Toronto, where I’m from, there’s endless pushback against densifying the single family homes that dominate much of the city. Right now I live in Victoria, and although many people and groups (including the mayor and the province) are pro-development, there’s a loud contingent of busybodies here who oppose literally any change or construction project whatsoever.

Re: Canada to ban foreigners from buying homes

#372

Post by richbell » Thu, Apr 07, 2022, 8:15 PM UTC

imposterr wrote: post #113

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…

In some provinces, the sold data is at least available. It definitely helps get a feel for what one can expect to pay in a given neighborhood.

While the sold data is useful, it doesn't capture nuances like "this house sold for 200k over asking and 175k over other bids because the buyer's agent mislead them and they were scared to lose." Often times a single large sale sets the bar for all future sales in the area; Zillow is a good example of how merely going off the sale history can quickly drive up prices.

Re: Canada to ban foreigners from buying homes

#373

Post by vkou » Thu, Apr 07, 2022, 8:17 PM UTC

ska wrote: post #348

standeven wrote: post #313

Earlier quoted context omitted.

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?

Unless things have changed radically since I was last there, downtown is mostly not dense. But even if it were, it wouldn't solve the real problem in these north american cities, which is the "missing middle". The model of small area of highly dense towers aimed at 20-something urbanites with no kids surrounded by spaced out single family homes with a yard is just fundamentally unworkable at any real scale. If Vancou…

Vancouver downtown (In large part, thanks to the west end) is incredibly dense. 23,838 people/km2 - the same density as Manhattan.

Once you leave the penninsula, though, it's surrounded by a lot of suburban sprawl, with small pockets of density around the SkyTrain stations. Unlike most North American cities, though, at least it has those pockets of density!

Re: Canada to ban foreigners from buying homes

#374

Post by jl2718 » Thu, Apr 07, 2022, 8:18 PM UTC

exdsq wrote: post #331

Canada used to be a really good place for foreign investment buying and renting/flipping houses pre-2008. My dad had around 50 properties in the Nova Scotia region just before the crash and the income from that was barely taxable (as a UK citizen, although I don’t remember specifics of how that worked). I can totally see why countries want to avoid foreign investment like that inflating local prices for citizens. Tbf…

This is called “Blockbusting”. Wonderful.

Re: Canada to ban foreigners from buying homes

#375

Post by hello_moto » Thu, Apr 07, 2022, 8:18 PM UTC

ska wrote: post #348

standeven wrote: post #313

Earlier quoted context omitted.

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?

Unless things have changed radically since I was last there, downtown is mostly not dense. But even if it were, it wouldn't solve the real problem in these north american cities, which is the "missing middle". The model of small area of highly dense towers aimed at 20-something urbanites with no kids surrounded by spaced out single family homes with a yard is just fundamentally unworkable at any real scale. If Vancou…

> it's mostly going to have to build that on top of areas that are currently full of single family detached. This is not going to make current denizens of those "nice neighbourhoods" happy, naturally.

They're not happy with megatowers. They're ok with missing middle (townhouses).

There is a whole stretch of roads being bought out and converted to missing middle that leads to downtown. (Oak, Cambie).

Re: Canada to ban foreigners from buying homes

#376

Post by smcin » Thu, Apr 07, 2022, 8:19 PM UTC

ryan93 wrote: post #259

ipaddr wrote: post #233

Earlier quoted context omitted.

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.

Can you please explain to all non-Canadians why you "can't build a home on your own property"?? Are you complaining about permitting, or what? Please explain the context.

Re: Canada to ban foreigners from buying homes

#377

Post by joshlemer » Thu, Apr 07, 2022, 8:19 PM UTC

jl2718 wrote: post #369

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.

The problem is that poorer people or renters generally are subsidizing richer people or homeowners generally. Depending on if your view is that Canadian governments are too big or too small, you'd say that renters are being unfairly overtaxed and should be given a break, or that homeowners are not paying their fair share and should be taxed more.

Re: Canada to ban foreigners from buying homes

#378

Post by llbeansandrice » Thu, Apr 07, 2022, 8:19 PM UTC

dionidium wrote: post #257

llbeansandrice wrote: post #226

Earlier quoted context omitted.

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 a…

I'm not contending that supply isn't the real issue, just that there's no way you're going to be able to change the culture around individual home ownership, nimbyism, and zoning laws on any reasonable time-frame. A better current solution that likely has wide-spread support would be to limit the demand rather than throw more money into the demand side.

Limiting large investors does not solve the problem, but it could help alleviate some acute symptoms.

Re: Canada to ban foreigners from buying homes

#379

Post by paconbork » Thu, Apr 07, 2022, 8:20 PM UTC

wnolens wrote: post #239

CPLX wrote: post #111

Earlier quoted context omitted.

It shouldn't matter all that much. Rented homes are an excellent (not perfect but very close) substitute for purchased homes. People don't like to rent because of instability or unpredictability of pricing. But a large and growing long term rental market where it's straightforward to find a new place and nobody has an incentive to kick you out or raise your rent is really just fine. You might be thinking, right but i…

I like the conclusion, but I've created some elaborate financial models to compare buying versus renting (+ investing the difference in S&P500). And so have a few very intelligent friends. It almost NEVER works out in favor of buying except for some crazy flukes like pandemic accelerating prices in Toronto. I think it's largely cultural? Canadian's (more than any of my American friends) are fed the idea that owning a…

Yeah that's basically where I'm at. The ability to not have to move and the ability to improve the place and keep the value of my improvements are worth a large premium to me.

Re: Canada to ban foreigners from buying homes

#380

Post by rank0 » Thu, Apr 07, 2022, 8:21 PM UTC

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…

Speculation isn’t great, but let’s not pretend this is some elaborate scheme orchestrated by all the homeowners.

If it’s feasible and profitable to build new homes, then developers will do so.

Everyone loves the simple solution of “build more houses”. Very few actually consider the execution of the master plan. What would it take for you to start building homes? It’s an enormous risk, requires tons of upfront capital, specialized labor and supplies.

When everyone wants to live in the same areas, housing prices go up. Lifting zoning restrictions isn’t some magic bullet that will alleviate that fact.