Canada to ban foreigners from buying homes • Hacker News Board

Re: Canada to ban foreigners from buying homes

#541

Post by amscanne » Thu, Apr 07, 2022, 11:20 PM UTC

hluska wrote: post #532

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…

You need to provide evidence for this assertion. I've never seen any kind of analysis of this problem produce a clear signal that supports the idea that foreign ownership is a primary factor.

Re: Canada to ban foreigners from buying homes

#542

Post by Tiktaalik » Thu, Apr 07, 2022, 11:21 PM UTC

joshlemer wrote: post #400

Tiktaalik wrote: post #269

Earlier quoted context omitted.

Most of the land is useless and completely unviable for building anything. Seriously. Almost all of British Columbia is mountain. We flooded many of the river valleys for hydro power in the 1950s. Can't build on the side of the mountain that easy. Huge swathes of Canada are muskeg bog and tundra. etc.

IMO British Columbia is way under-developed. There is literally 15 or so Switzerlands worth of some of the most beautiful and desirable real estate North of Vancouver that could be developed in similar way to the cities in the Swiss Alps. The Okanogan is not really all that mountainous but is basically unpopulated, etc.

Funny thing about the Okanagan is that given that it's pretty much the only land in Canada where you can make decent red wine, a lot of that land is more worthwhile for agriculture than housing.

Feel bad for the farmers that happened to be born on the wrong side of the border in the US side of the valley. In the USA there's heaps of places where wine can be made and their land isn't worth anywhere nearly as much.

Re: Canada to ban foreigners from buying homes

#543

Post by hluska » Thu, Apr 07, 2022, 11:22 PM UTC

VincentEvans wrote: post #504

workaccount21 wrote: post #492

Earlier quoted context omitted.

"foreigners" make up 50% of Canadas largest cities - where all the money is. The richest of the world can afford to move there but farmboy from Peterborough is SOL if he ever wants to make real money. Im fine with putting your own citizens interests before the rest of the world.

Even if those “citizens” are massively capitalized corps seeking returns on their investments? Who cares if they are domestic or foreign (and if foreign becomes difficult - they’ll just open a subsidiary). I don’t really know whether you have read the rest of what I wrote or just got triggered by me seemingly defending “foreigners” and hit the Reply button. I don’t mean to single you out specifically, there other pos…

Anyway, I think there’s a big distinction between immigrants (who cease to be immigrants at some point, how many years does it take in your opinion by the way? Who is more worthy of being helped to buy a home - a immigrant who came to the country 30 years ago, or a natural-born 25 year-old citizen?… but I digress.) and investment real estate that requires an intervention.

There was a two year moratorium announced today, but there are several exemptions. Permanent residents, refugees, some international students on the path to PR, and people here on work permits are all exempt.

Re: Canada to ban foreigners from buying homes

#544

Post by pedalpete » Thu, Apr 07, 2022, 11:23 PM UTC

djbebs wrote: post #381

Majromax wrote: post #318

Earlier quoted context omitted.

> Do those foreign investors leave the house empty? Who cares if we can just build more? I'll note here that there is a legitimate complaint to vacant housing. Some expensive city infrastructure like transit is supported by people-density rather than house-density, so a community of empty homes doesn't justify a subway line in the way that a bustling, lived-in community would. Municipal funding that comes from the pr…

There is no legitimate complaint about empty housing, not just because empty houses pay the same tax as occupied ones, but because empty housing is a myth.

Is empty housing a myth? https://openhousing.ca/2020/12/30/vancouver-empty-homes-cros...

I used to live in Yaletown (Vancouver) and the building I lived in was this very tall, maybe 35 story two tower block which only had two elevators. It took me about 6 months to realize that I never saw anybody else in the building. There were only 3 occupied apartments on my floor (I think there were 8 units per floor). I was told the building was designed to be a "piggy bank in the sky" and that low occupancy was in the design.

This is just an anecdote, but I was under the impression low occupancy is an issue in Vancouver so much so that they tried to pass laws regarding empty homes.

Re: Canada to ban foreigners from buying homes

#545

Post by 542458 » Thu, Apr 07, 2022, 11:25 PM UTC

pseudo0 wrote: post #110

bryanlarsen wrote: post #73

Earlier quoted context omitted.

Price is set at the margin, especially in such an inelastic market as housing. "supply 100, demand 99, price goes down. Supply 100, deman 101, price goes up." 5% isn't a lot, but it could have a disproportionate impact. Housing isn't a federal responsibility, so the provinces are more to blame for the crisis. Ontario just totally whiffed implementing a report on how to reduce housing costs, so I expect the problem to…

The bigger issue is the multitude of exceptions. A ban on foreign buyers except for permanent residents, students, and recreational properties isn't much of a ban at all. Canadian permanent residency is incredibly easy to obtain, and students are frequently used as straw purchasers for their foreign parents (just look at the number of UBC students who own multimillion dollar homes despite having zero income). It also…

> Canadian permanent residency is incredibly easy to obtain

I don’t feel this is broadly true. I just watched a friend jump though ridiculous hoops and inefficient bureaucracies to get her PR. Is there a particular method for getting a PR that you feel is too easy?

Re: Canada to ban foreigners from buying homes

#546

Post by robocat » Thu, Apr 07, 2022, 11:28 PM UTC

kazinator wrote: post #521

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…

> This is such a huge deal. Probably, less than people think. Sealed bid auctions do not increase revenue to the seller, according to auction theory. https://en.wikipedia.org/wiki/Revenue_equivalence > gives all of the information to one side (the sellers) Well, not all the information; just what other people are bidding. But all that matters to the bidder is that that other bidders do not have access to more informa…

> https://en.wikipedia.org/wiki/Revenue_equivalence

Auction theory has so many assumptions that it really can’t be applied to buying a home. The link above assumes the highest bidder knows[1] the highest price the underbidder would pay, which is extremely silly. Apart from the fact that if you know the highest price of another bidder, then the seller also probably knows your highest price, and the seller can just ask for the highest possible price, duhhhh!

Bidding (auction or blind) is used precisely because the prices are not known.

Personally I have been involved with enough home auctions and blind bids to know that there are huge information asymmetries or uncertainties. When you lack information, sometimes you need to make your best bid, and you might value a property a lot higher than the underbidder.

I would like to see more protection against lemon markets, but realistically I can’t think of a fair way to enforce that. Banks and insurance protect some people against doing stupid things.

[1] First price auction: “if each player bids such that they bid the expected value of second highest bid”

Re: Canada to ban foreigners from buying homes

#547

Post by amscanne » Thu, Apr 07, 2022, 11:30 PM UTC

glouwbug wrote: post #178

arcticbull wrote: post #131

Earlier quoted context omitted.

Yeah, about 70% of Canadians are homeowners (almost 15% higher homeownership rate than in the US). Ideally, they find a way to keep home price growth at/below inflation for a few years rather than actually pulling prices down directly. There's very little appetite for reducing the notional price since that 70% is broadly "most voters."

Doesn't the 70% ownership stat include those living with their parents? I have friends at 30 who still live with their parents.

I believe the 70% stat is from the census, and it would % of households. So it is possible that it reflects a higher % of kids not leaving the nest and renting something, but I also don't think its fully compatible with the narrative that Canadians are being squeezed out of housing (by foreigners) if the home ownership rate is higher than at any other time in history.

Re: Canada to ban foreigners from buying homes

#548

Post by [deleted] » Thu, Apr 07, 2022, 11:30 PM UTC

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…

[deleted]

Re: Canada to ban foreigners from buying homes

#549

Post by liketochill » Thu, Apr 07, 2022, 11:33 PM UTC

cmrdporcupine wrote: post #502

wnolens wrote: post #239

Earlier quoted context omitted.

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…

Many Europeans (including my aunt&uncle in Germany) rent for decades without any similar concerns about stability because the landlording laws are written better. And tenants can and do have their own kitchens and other improvements that are typically "perks" reserved for homeowners here. Renting has a bad name in North America because it is associated with insecurity, low-income situation, exploitation, etc. But in…

Paying rent to the bank ends after 25 years though.

Re: Canada to ban foreigners from buying homes

#550

Post by cmrdporcupine » Thu, Apr 07, 2022, 11:34 PM UTC

liketochill wrote: post #549

cmrdporcupine wrote: post #502

Earlier quoted context omitted.

Many Europeans (including my aunt&uncle in Germany) rent for decades without any similar concerns about stability because the landlording laws are written better. And tenants can and do have their own kitchens and other improvements that are typically "perks" reserved for homeowners here. Renting has a bad name in North America because it is associated with insecurity, low-income situation, exploitation, etc. But in…

Paying rent to the bank ends after 25 years though.

It won't for most of the young people buying today, because they'll have to keep refinancing to afford what they've bought.