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Canada to ban foreigners from buying homes

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Re: Canada to ban foreigners from buying homes

#531

Post by CountSessine »

vkou wrote: post #314
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…

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.

I completely agree. 1%/year should be very manageable. Especially for the country with the 2nd largest landmass in the world.

And yet here we are.

Folks love their suburbs. And they love those laws protecting their suburbs and excluding everything else the market might want to try.

Re: Canada to ban foreigners from buying homes

#532

Post by hluska »

VincentEvans wrote: post #7

I don’t know the specifics on Canadian real estate market and the specifics of the problems there, but based on my understanding of the problems facing your neighbors to the south - I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds,…

I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds, private capital, REITs which does not appear to be addressed at all?

Sorry friend, but you're wrong. First, the issue of foreign ownership in the real estate market has already been studied. So, they have evidence supporting the moratorium. And second, this budget also announced that they are going to investigate the role of hedge funds, private capital, REITs, etc. Early actions could be announced before the end of the year.

Re: Canada to ban foreigners from buying homes

#533

Post by aaron695 »

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…

No post body was provided.

Re: Canada to ban foreigners from buying homes

#534

Post by crooked-v »

kbenson wrote: post #520
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…

> You're fighting scarcity. No, they're fighting market inefficiency. A free market requires accurate and timely information to be efficient. This is literally people putting constraints on the market for what they are selling so the information is not available to one side, and the price is inflated. A rational actor should walk away from a system like this, but if that's all that's available around you because of s…

All the market efficiency in the world won't stop the continual increase in prices from bad zoning and missing middle housing.

Re: Canada to ban foreigners from buying homes

#535

Post by qball »

chaostheory wrote: post #460
qball wrote: post #330

Earlier quoted context omitted.

Well, they thought of that; it's just as expensive out there too. If you want a house and a job in this country, you have to go to Alberta, Saskatchewan, or Manitoba. BC has no land and is either mountain or agricultural land reserve (the second-largest city in the province has massive fields in the middle of it; average single family home price $1M). ON and QC are similarly boxed in for land (the Canadian Shield is…

Would this change due to climate change? I’ve been looking at the climate trends in major cities and there are some drastic temperature changes in the coming decades.

No, and this (https://d3d0lqu00lnqvz.cloudfront.net/media/media/9d427dba-c...) is the reason why.

The area in the red is one continuous granite slab called the Canadian Shield. The US has no comparable geography.

There's almost zero topsoil, and building any community there involves a lot of very expensive blasting. It's bad land for the opposite reason that the Australian continent is largely uninhabitable: there's tons of water, but no soil.

(The only real upside to it is that it's very conducive to hydroelectric energy; the vast majority of Canadian energy production can be, and has always been, zero-emissions- we call electric companies "the hydro", and combined with the nuclear reactors in Ontario, 85% of national electrical power generation is zero-emissions.)

Superimpose a population density map on the Eastern provinces, and you'll notice that generally speaking, the settled area of the provinces ends where the shield begins. That isn't a coincidence.

Sure, climate change should make a bit of the [non-red-shaded] land more economically useful, but that's about it, and mining/farming communities generally aren't large enough to provide a base for a new city especially because it's landlocked- so you're not going to see any new cities spring up there any time soon.

Re: Canada to ban foreigners from buying homes

#537

Post by Sohcahtoa82 »

wnolens wrote: post #523
Sohcahtoa82 wrote: post #416

Earlier quoted context omitted.

> 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,…

Houses in the GTA are about 1.6M, resulting in about 7k/mo all-in. Chances are you're not paying 7k/mo as a renter, so it's a bit of apples-oranges. The house costs more, but you get more. You'd have to rent out part of your home and be a landlord to trade that extra space for cash flow. I value my time and privacy at a non-zero dollar amount :) This source [0] states annual appreciation to be about 6.11% for real es…

> anecdote: My parents bought a house 35 years ago in a suburb of the GTA. Purchase price was around 250K I think. It was a lot for the time, too! And now it's probably worth 1.8-2M. Amazing! Except 250k @ 6.5% over 35 years is just over 2.2M.

Right...but if you're using that to compare it to renting, the renter still comes out behind. WAYYYY behind.

The buyer (using your example) : Spends $250K on a house. After 35 years, they have a $1.8-2M asset, for a net gain of $1.55-1.75M.

The renter: Put $250K into the S&P500 which returned 6.5%/year. After 35 years, they have $2.2M. Meanwhile, they've been paying rent. How this ends up working out depends on the rent. $1,000/month is $12,000/year. For 35 years is $420,000. A net gain of $1.78M. That sounds good, but we all know the rent isn't $1,000/month. If the house is currently $1.8-2M, then the rent on that is going to be at least $4K.

I don't feel like doing the math on how much you would spend on rent if you had a 6% rent increase every year, but even if I'm generous and say that over the course of 35 years, your rent averaged $2K/month, the renter CLEARLY comes out way behind. They'll have made $1.95M in the stock market, but spent $840K in rent, for a net gain of only $1.11M.

Re: Canada to ban foreigners from buying homes

#538

Post by kbenson »

crooked-v wrote: post #534
kbenson wrote: post #520

Earlier quoted context omitted.

> You're fighting scarcity. No, they're fighting market inefficiency. A free market requires accurate and timely information to be efficient. This is literally people putting constraints on the market for what they are selling so the information is not available to one side, and the price is inflated. A rational actor should walk away from a system like this, but if that's all that's available around you because of s…

All the market efficiency in the world won't stop the continual increase in prices from bad zoning and missing middle housing.

You pick your battles, as perfect is the enemy of good. That other problems exist is not a valid reason to prevent fixing something if that fix actually helps in some way.

Re: Canada to ban foreigners from buying homes

#539

Post by _3u10 »

tomatowurst wrote: post #176
VincentEvans wrote: post #7

I don’t know the specifics on Canadian real estate market and the specifics of the problems there, but based on my understanding of the problems facing your neighbors to the south - I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds,…

You nailed it. You don't need to be in the Canadian real estate to realize that the most people coming to open houses are in fact local Canadians (also from other provinces) looking to move to the warmest part of the country or add another property or two to their portfolio. The landlords that run the real estate holdings companies are mostly White. They buy up the properties, apartments, condos when they are cheap w…

Lots of us are indigenous and Latino but often mistaken for white by people who judge race based on skin color.

I wouldn’t call it a paradise but it’s definitely communist

Re: Canada to ban foreigners from buying homes

#540

Post by liketochill »

woah wrote: post #512
quickthrowman wrote: post #133

Earlier quoted context omitted.

How on earth would higher home sale prices by corporations bidding housing up push rent down? It has the exact opposite effect, rents go up if a property costs more..

Seriously? What's the mechanism of this magical connection? Rental prices go up if there is more demand in the rental market.

Landlords don’t buy properties to rent at a loss. Before they buy they make sure they will be able to charge the rent they need to cover costs. Or at least I do.
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