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Canada to ban foreigners from buying homes

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Re: Canada to ban foreigners from buying homes

#631

Post by TheCowboy »

VirusNewbie wrote: post #57

I don't know about Canada, but in the US there are some tax law changes that could drastically reduce 'land hoarding' and help encourage excess capital to flow into construction of new properties rather than rent seeking. Right now 1031 exchanges mean real estate over many other types of investment are tax advantaged, (I can't do the same thing with my stock for instance) and doubly so for places that put caps on pro…

Tax law changes don't change zoning policies or other political obstacles to construction. People exist with money willing to invest into construction if they could. People also like to hate on politically-connected 'greedy developers' but they create an environment where that's the type of companies that are going to thrive.

Maybe people here would do better to visualize it in startup terms where people are willing to put excess capital to use. Imagine you needed to get approval of neighborhood committees and so on to do a startup. Would YCominator still look the same? I don't think it would. You would have VCs that more about forming cozy relationships with politicians and poker brokers.

Re: Canada to ban foreigners from buying homes

#632

Post by bscphil »

sacrosancty wrote: post #626

New Zealand did that years ago. It did nothing for price increases but at least it shut up some of the populist screeching. Price increases seem to have finally stopped and you know how? The government tightened the lending rules so regular first home buyers and owner-occupiers can't get such a big loan anymore. Those people were the problem all along but nobody wanted to blame them. They were supposed to be the vict…

> The government tightened the lending rules so regular first home buyers and owner-occupiers can't get such a big loan anymore.

I know nothing about the situation in New Zealand, but taking what you say at face value, they are the victims. It's just that now, as opposed to bidding high on houses they could barely afford, they can't afford to enter the market at all. So things are even worse for them.

Re: Canada to ban foreigners from buying homes

#633

Post by kazinator »

robocat wrote: post #625
kazinator wrote: post #552

Earlier quoted context omitted.

Most of the people crying foul over the blind real estate bids have no idea about auction theory and what those assumptions are, and who is favored by the ways in which those assumptions do not hold, and how much. > The link above assumes the highest bidder knows the price of the underbidder, which is silly The first price auction and second price auction types are understood to be sealed bid. The English auction is…

I think you are making sweeping statements. In particular, the link you gave looks to be harmfully misleading in relation to blind auctions for houses. In my experience academic auction theory is almost irrelevant when buying a house. I do have a close friend who designs huge market trading systems, so I will talk to them and validate my opinion. In practice, house transactions appear to be driven by irrational or ig…

> house transactions appear to be driven by irrational or ignorant participants

Right; so wouldn't those be the causes of whatever (if anything) is wrong, rather than bids being sealed? Give some irrational bidders open bids and they will have a bidding war instead.

Re: Canada to ban foreigners from buying homes

#634

Post by rapind »

TheCowboy wrote: post #604
rapind wrote: post #598

Earlier quoted context omitted.

> 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.

Jack up interest rates to trigger a recession, and now not only do you still have a housing market that exists in its current form due to perpetual undersupply but with a recession on top. Making it too expensive to buy a home does 'help' with prices, but it's more like treating the symptom than the cause. The result is there still isn't enough affordable housing in places where it is needed.

If raising interest rates causes a recession then we’re already in one and just pretending we’re not.

Consider the long term consequences of this debt economy. We’re just kicking the can down the road. It won’t magically get better. The sooner we (society) learn that massively over borrowing has consequences, the better.

I agree though that building more housing (or maybe radically changing the way housing works) should also happen. Maybe once everyone wakes up from this real estate debt fantasy there’ll be the political will to actually do something about it.

Average house price in Canada has ballooned. It’s like a crypto scheme, only instead of a bunch of shady YouTubers selling it, we have an entire industry of snake oil pushers. I don’t think your average Jane really gets how ridiculous it is… yet.

Re: Canada to ban foreigners from buying homes

#635

Post by throwaway2037 »

bradleyjg wrote: post #553
ashtonkem wrote: post #488

Earlier quoted context omitted.

It’s amazing how many downvotes pointing this out gets. People have quite the kneejerk reaction when the downsides of car transit are pointed out to them.

It’s a lazy slogan that gets us nowhere. I live in NYC and we’ve built three brand new subway stations in the last fifty years. It’s not just a matter of people’s preferences for cars, it’s not possible to build a non car city anymore due to pathologies that have nothing to do with “car culture”. The number one issue is that we’ve allowed too many people and interest groups to effectively bring any major project to a…

You wrote: >

That sounds pithy, but it overlooks all the maintenance work done on the system. Have you ever looked at pictures from the NYC subway in the 1970s? It was hell. (You can Google it.) My father lived in NYC in the 1970s and said the subway was like the "Fourth World" (vis-a-via first/second/third world!).

Also, how about PATH, Metro North, NJT, LIRR, AirTrain JFK, or AirTrain Newark? These are not the NYC subway, but they have also seen major upgrades in the last 50 years.

Finally, I tried to Google for list of stations opened from 1972. It could not find a concise list. I'm pretty sure it is more than three, just for NYC subway.

Re: Canada to ban foreigners from buying homes

#636

Post by RandyRanderson »

alan-hn wrote: post #81
WestCoastJustin wrote: post #72

Earlier quoted context omitted.

Currently, more than 10 per cent of Canada’s GDP is derived from residential real estate activity: renovations, ownership transfer costs and real estate commissions. [1] [1] https://nationalpost.com/news/canada/canadas-unhinged-housin...

Is 10% == "almost entirely"?

Jun 2021: Canada Is Now 50% More Dependent On Housing Than The US At Peak Bubble:

https://betterdwelling.com/canada-is-now-50-more-dependent-o...

The S&P was flat for 6 years following 2007 in the US. Doesn't seem like a good path to follow.

Re: Canada to ban foreigners from buying homes

#637

Post by throwaway2037 »

chaostheory wrote: post #556
cameronh90 wrote: post #487

Earlier quoted context omitted.

Almost everything you're saying is a symptom of poor investment in public transport. I have no doubt that the car works better for your commute, as is the case for millions of other people. Unfortunately, stick millions of cars on the road and you have a huge bottleneck for growing the commuter belt, which means only houses in a relatively small area are useful, and they get extremely expensive. Historically, and in…

> Regarding the violence and antisocial behaviour, that's really a problem of policing and allocation of funding. Japan has one of the lowest crime rates in the world with heavy investment in public transportation & policing, and yet they still have issues with sexual harassment and sexual assault on their trains. It’s a hard problem to fix related to population density.

Are you aware that many Tokyo train lines have women-only cars during rush hour? I think they started in the 1990s and have greatly improved the situation for women in Tokyo.

Re: Canada to ban foreigners from buying homes

#638

Post by wnolens »

liketochill wrote: post #569
cmrdporcupine wrote: post #550

Earlier quoted context omitted.

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

In addition to thinking that banks should be smart and act in their own self interest of not lending money to people who can’t pay it back, there are government mandated stress tests for qualifying for mortgages at higher interest rates. While rates are historically low and a return to the rates of the 80’s would cause a lot of defaults, I think the market has tuned itself for maximum extraction of labour from those…

Yes, I think that's it. There's not many places to actually live in Canada, so demand is sky high anywhere within a few hours of the major city centres. Then long stretches of nothing. Yukon is cool, but it's not super cheap if you were hoping so. Rent is high compared to home prices though, so being a landlord is easier.

Re: Canada to ban foreigners from buying homes

#639

Post by bradleyjg »

ashtonkem wrote: post #614
bradleyjg wrote: post #553

Earlier quoted context omitted.

It’s a lazy slogan that gets us nowhere. I live in NYC and we’ve built three brand new subway stations in the last fifty years. It’s not just a matter of people’s preferences for cars, it’s not possible to build a non car city anymore due to pathologies that have nothing to do with “car culture”. The number one issue is that we’ve allowed too many people and interest groups to effectively bring any major project to a…

> It’s a lazy slogan that gets us nowhere. “Cars are land inefficient” isn’t a slogan, it’s literal fact. > I live in NYC and we’ve built three brand new subway stations in the last fifty years Ah, the stereotype of New Yorkers not paying attention to other cities strikes again! Yes, New York has its own problems, but for the vast majority of other cities GP’s comment is true. New York is one of the very few exceptio…

Environmental impact reviews are car culture? Public notice and comment processes are car culture? Kafkaesque public bidding processes are car culture? Decade long litigation needed to exercise eminent domain is car culture? Union work rules are car culture?

Re: Canada to ban foreigners from buying homes

#640

Post by throwaway2037 »

TuringNYC wrote: post #576
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…

>> illiberal zoning laws One of the problems is that once people buy into the system, their entire life's savings (plus often 4x more via leverage) is tied up in the house and the price of the house. At that point, most dont want more development, because they lose their life savings if home prices go down. Each person entering this horrible system is forced to perpetuate it, or lose it all.

In France and Germany, housing supply is more carefully planned. In most places, housing prices are flat in real price terms (including inflation). That's ideal for middle income and below. Even in places that have seen sharp rises like Paris and Berlin, there is a lot of political pressure (and action) to solve these problems.
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