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Canada to ban foreigners from buying homes

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Re: Canada to ban foreigners from buying homes

#411

Post by ashtonkem »

cameronh90 wrote: post #392
techsupporter wrote: post #309

Earlier quoted context omitted.

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,…

> 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. Canada's largest urban area is 5.6 million people. London, Paris and Seoul are around double that, NYC is 19 million and Tokyo is 37 million. Why are Canadian cities hitting this limit at such a comparati…

> Why are all the major cities in the western world seemingly hitting this limit at the same time, even though they all have different populations?

I can’t speak for Canada, but in America the answer is always cars. Car based transit is wildly land inefficient, and the main reason why all car based cities hit their limit at the same time.

In particular there are two huge shortcomings with cars in urban design:

1. Parking eats up a huge amount of space. Either you let that drive density way down (which means commutes get longer) or you build underground parking at exorbitant prices driving up rents. Even in the latter case the roads around housing ends up becoming an issue, limiting density far below what you’d expect in say, Paris on Chicago.

2. Car transit to a shared destination is almost comically inefficient, which is really noticeable when people try and commute via car to job centers. This wouldn’t be as bad if we restricted cars to what they’re good at, such as driving away from the city, but most American cities have the unique psychosis of demanding that transit into the city center be via car. This does not scale, and is why places with wildly different zoning laws can have equally hellish commutes.

The issue is not that we can’t build, we’re really good at adding more highway lanes, it’s more that we are monomaniacally focused on building the wrong things.

Re: Canada to ban foreigners from buying homes

#414

Post by macspoofing »

nemo44x wrote: post #322
macspoofing wrote: post #297

Earlier quoted context omitted.

>I'm not sure why "amount over reserve / list" is a meaningful metric. It's not. The salient part is that the current market is crazy and there is a large number of bids on any given house. >It's clear that in a lot of cases the list prices are intentionally below market to attract more bidders and produce the appearance of more competition at open houses and the like. Yes, list prices are intentionally below market…

> Yes, list prices are intentionally below market but you know what ... houses are going for crazy amounts because we are in some sort of a bubble Why? The last 40 years interest rates have continued to decline and inflationary pressures have hurt the value of every currency. What reason is there to believe this won't continue indefinitely (low interest + ~2% y/y inflation) and that the market is simply pricing thing…

>Clearly all these homes are being bought so it would appear people have the money.

Yes ... Back in 2007, people bought homes as well - so everything was OK - rite?

By the way, people aren't paying cash for houses.

Re: Canada to ban foreigners from buying homes

#415

Post by ryan93 »

bdcravens wrote: post #213
ryan93 wrote: post #192

Earlier quoted context omitted.

How does your theory explain the difference in housing prices between San Francisco and Lubbock?

The "theory" relates to increase over time for a single location, not differences between 2 locations at a single point in time. But to stick to your example, investors are more likely to flock to a location with greater returns. At the same time, Lubbock hasn't exactly remained stagnant. https://learn.roofstock.com/blog/lubbock-real-estate-market

Why are you so sure the outsized returns don't have anything to do with zoning?

Re: Canada to ban foreigners from buying homes

#416

Post by Sohcahtoa82 »

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…

> I've created some elaborate financial models to compare buying versus renting (+ investing the difference in S&P500) [...] It almost NEVER works out in favor of buying

I can't see how that's possible.

Rent is pissing away money, and from the rates I've seen, the monthly rent on a house is often very close to the monthly mortgage payment, so the "investing the difference ins S&P500" ends up being moot.

For my house, Zillow estimates the monthly rent value at $2,400/month, which is almost exactly what my mortgage payment (including property tax) is. And in 10 years, that payment will become ~$570 once the mortgage is paid off and all that's left is property tax. Meanwhile, if I chose to rent instead, after 10 years, my rent would probably be well $3,500/month.

Yeah, owning means I'm paying maintenance and repair costs, but those certainly don't add up to anywhere near what the rental payment would be.

I fully reject any claims that in the long term, renting could ever possibly be better than buying from a purely financial perspective. A mortgage is constant (Unless you fell for the scam that is an ARM) and eventually goes away. Rents perpetually go up and don't leave you with an asset.

Re: Canada to ban foreigners from buying homes

#417

Post by vkou »

imtringued wrote: post #391
vkou wrote: post #314

Earlier quoted context omitted.

1%/year is not a crazy-high rate, considering that Canadian fertility is below replacement. If the country can't figure out how to deal with a population growth of ~1%/year, the problem is not the growth, the problem is somewhere else.

The problem is the allocation of jobs in a handful of city centers.

Then it sounds like the obvious solution is to ban rural people from moving into the cities!

... Or build more.

Re: Canada to ban foreigners from buying homes

#418

Post by bennysomething »

Beldin wrote: post #311
jefftk wrote: post #177

Earlier quoted context omitted.

> Not sure if buyer or seller is better off using them. There's a theorem an auction design that says that, under some vaguely reasonable assumptions about bidder information, it doesn't matter what form you use for the auction. Open auction, sealed auction, even second price auction should all give the same winner and same final price: https://en.wikipedia.org/wiki/Vickrey_auction#:~:text=Revenu...

That's not entirely correct. The theorem says that in Vickrey auctions (sealed bid 2nd price), each bidder's optimal strategy is to bid their actual valuation of the auctioned object. It doesn't work with open bidding, because then you could bid artificially much as long as the 2nd highest bid was at your real valuation or below.

Is there anything in game theory related to this? (Very naive question, so probably not)

But yes my intuition when selling my house was "surely I'd get more if this was open bids"

Re: Canada to ban foreigners from buying homes

#419

Post by lotsofpulp »

Spivak wrote: post #329
jackyinger wrote: post #185

Earlier quoted context omitted.

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…

Escalation clauses are dumb anyway. If you tell me “I’m willing to pay you up to 100k for your house” then my offer just became $100k.

You can require proof of competing offers in your escalation clause.

Re: Canada to ban foreigners from buying homes

#420

Post by mperham »

dboreham wrote: post #93
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.

It's very easy to build housing here in Montana but that hasn't stopped property prices from rising significantly.

Sure it's easy to build. As long as it's a single family home. The least efficient form of housing.
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