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Canada to ban foreigners from buying homes

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Re: Canada to ban foreigners from buying homes

#591

Post by exdsq »

jl2718 wrote: post #374
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.

I think it was a little more altruistic than that - he just found people with criminal backgrounds were struggling to find places and on the whole were just as reliable to pay rent on time because they appreciated the opportunity

Re: Canada to ban foreigners from buying homes

#593

Post by jrobbins »

I see a lot of possible root causes being mentioned, e.g., blind bidding, zoning, foreign buyers, corporate buyers, and the vested interests of existing home owners.

Here's two more: income inequality, and the construction skills crisis.

Income inequality: You might think "prices are crazy, no one can afford this", but the fact is that some people are affording it, even repeatedly. Depending on your family and circle of friends, you may know someone who owns 2, 3 or 4 homes or one over-sized home. It is not uncommon, just not usually discussed openly. They buy or retain homes and then rent them rather than selling. Why horde houses? Some people just like to see a tangible asset. Most upper middle class people have most of their assets in stocks. But with stocks up significantly in 2020 and 2021, a lot of people are ready to diversify into real estate. And those who own homes can watch them appreciate even if the home sits empty.

Construction skills crisis: At least in the US, there just aren't enough construction workers to fill construction jobs. You could open up zoning rules, but that won't make housing starts instantly increase, because there are not enough workers. A generation of people has been taught that knowledge worker jobs are the best. I think that is a largely correct. Even with construction salaries up, I think that it is tough to have a long career doing physical labor in the trades.

Re: Canada to ban foreigners from buying homes

#594

Post by nradov »

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…

There's nothing unfair about a bidding process. It's an efficient means of price discovery. If you get emotional about it then that's your problem. Some prospective buyers get irrationally attached to a single property, which makes no sense. Just go buy a different home.

Re: Canada to ban foreigners from buying homes

#595

Post by polarbeer »

jrobbins wrote: post #593

I see a lot of possible root causes being mentioned, e.g., blind bidding, zoning, foreign buyers, corporate buyers, and the vested interests of existing home owners. Here's two more: income inequality, and the construction skills crisis. Income inequality: You might think "prices are crazy, no one can afford this", but the fact is that some people are affording it, even repeatedly. Depending on your family and circle…

https://www.dictionary.com/e/hoard-vs-horde/

Re: Canada to ban foreigners from buying homes

#596

Post by kbenson »

CountSessine wrote: post #573
kbenson wrote: post #538

Earlier quoted context omitted.

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.

That other problems exist is not a valid reason to prevent fixing something if that fix actually helps in some way That scarcity exists is the whole reason we're focusing on foreign buyers in 2022. And blind-bidding in 2021. And investors in 2019. And money-laundering in 2018. And Chinese money in 2017. All of these things should be addressed, but every one of them has provided political cover for the real reason tha…

> None of these things will matter one whit to housing affordability.

> "Helps in some way" is alright except that "helps in some way" has been sold for the last 6 years, politically, as, "this is the reason you can't buy a home! Surely it has nothing to do with NIMBYism and our suburbs! Please don't ask me, as your elected representative, to take on suburban voters and start talking about housing equity as it relates to affordability!"

That isn't what the commenter you originally replied to was stating, nor was it my position. While your argument may have merit, it's a non-sequitur when used as a rebuttal to either that commenter or myself.

> Just quit the bullsh*t about this being about addressing housing affordability.

I get it, you have a point you want to make. There are more constructive ways to do so than to misconstrue the arguments of the people you are replying to.

Re: Canada to ban foreigners from buying homes

#597

Post by kbenson »

woah wrote: post #574
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…

These kind of little tweaks to symptoms of the housing shortage are ultimately useless band aids. After a decade of stopping foreigners and corporations from buying houses, slapping the wrists of landlords who have vacant units, and mandating that the bidding process is emotionally nurturing, house prices will still be higher if there is more demand than supply. In a world where there was enough housing supply, you w…

I don't disagree that they don't fix the problem entirely, nor that they don't address the core problem of housing affordability. I don't think they're useless though. They affect what many people see as an unfair practice. If stopping it is as easy as regulating it away, why not do so? Nobody is going to then turn around and assume the housing affordability problem is fixed, and if they did nobody is going to believe them. It's not like this is some new and not understood problem, nobody believes blind bidding is causing all the problems.

Re: Canada to ban foreigners from buying homes

#598

Post by rapind »

FredPret wrote: post #584
TuringNYC wrote: post #572

Earlier quoted context omitted.

>> All the market efficiency in the world won't stop the continual increase in prices from bad zoning and missing middle housing. I disagree. Depending on the jurisdiction (in the US), part of the issue is the 10% net loss you end up with. 5-6% on the agent fee(s), another 1% on "mansion tax", in NYS/NYC there is a 1% and 1% transfer tax and 1/2% mortgage tax. Different jurisdictions are less (or more). Throw in more…

All this is true and bad but the Canadian market is primarily driven by supply issues, not red tape. There just aren’t enough houses/condos. The resulting price boom isn’t a mere 5-10% increase, but hundreds of percent over the course of only 5-10 years. I’ve seen condo prices double three times in five years in places.

> All this is true and bad but the Canadian market is primarily driven by supply issues, not red tape. There just aren’t enough houses/condos.

You forgot cheap debt. There's also a ton of speculation. Jack up those interest rates and see where we're at.

Re: Canada to ban foreigners from buying homes

#600

Post by fma »

fartcannon wrote: post #590
davidw wrote: post #140

Earlier quoted context omitted.

> massive investments made by hedge funds, private capital, REITs I can't recommend this article enough on that subject: https://www.vox.com/22524829/wall-street-housing-market-blac... "The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that ar…

'Historically low supply' because it's been bought up as investments?

I can only speak of my local area in North Atlanta suburbs, but it does not seem like builder are building as many single family homes as before. I see complaints on our local social media and I have observed it as well. We bought our house new in 2016. There were many new neighborhoods at the tail end of completion. Every corner had huge signs telling you to stop by. Our house was not designed by us, but by the builder and it was good enough at the time.

We have been eyeing for a new construction neighborhoods in the last many years so we can get something larger and more specific for our needs (multi-generational). All I see are town homes and apartments. For reference, our city population is ~25,000...we have lots of land.

For the record - we don't need new construction and if an existing home fits our needs exactly we'd go for it. But I'm just referencing that no new single family home neighborhoods have popped up as abundantly as before...just townhouses, condos and "Luxury Apartments" with rents more than my monthly mortgage.

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