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According to the government's announcement linked to in the article, the actual proposal is subtly but importantly different: " imposing a two-year ban on foreign capital coming into Canada to buy residential real estate ".
So why don't they build more homes?
No need to ban those 'evil' foreigners, just tax them so they can pay for what the locals want.
I wonder if the simpler solution would not be to require residence, for homes in popular locations.
If you think foreign investor cause harm, just estimate how much harm it is, and tax them accordingly. Why would you ban them?
Taxing is almost always more economically efficient than banning.
You can even pay out (part of) the tax take to the people you think are harmed.
(In general, a land value tax for everyone would be a good idea. But if political reasons dictate that only foreigners should be taxed, so be it. Still better than a ban.)
The data is public as well, foreign investors aren't the problem. To say you are doing this would not only be punitively not allowed. So you're literally telegraphing that you intend to do nothing. Or for that matter try to make things worse.
Earlier quoted context omitted.
It could be that there is a sufficient amount of housing (built or being built), but that it is often not occupied on account of just being an asset in a wealthy person’s portfolio. In this case it could be seen as wasteful to build more, and too much of an oversupply could lead to an economic collapse if it’s on a big enough scale. The other possibility is that they are building more homes, and want them to be purch…
>> being an asset in a wealthy person’s portfolio Why wouldn't that wealthy person rent the property out and get better ROI? Keeping it empty does not make sense to me.
I would have thought that the pandemic and travel restrictions would have effectively “banned foreigners from buying homes” for 2 years. If home prices haven’t fallen during pandemic, then the reason why prices are high is not because of foreigners. The government is trying to point to a scapegoat rather than trying to get to the root cause.
From what I've read before, the issue isn't foreigners buying the homes to live in, it's foreigners using it as a way to move cash out of their own country to hedge against devaluation/government blocks. A lot of the houses don't even end up being rented out, they just sit vacant.
Earlier quoted context omitted.
It could be that there is a sufficient amount of housing (built or being built), but that it is often not occupied on account of just being an asset in a wealthy person’s portfolio. In this case it could be seen as wasteful to build more, and too much of an oversupply could lead to an economic collapse if it’s on a big enough scale. The other possibility is that they are building more homes, and want them to be purch…
>> being an asset in a wealthy person’s portfolio Why wouldn't that wealthy person rent the property out and get better ROI? Keeping it empty does not make sense to me.
I mean, a place where your rental profit is 3k/month, might sell for 100k more than you bought it for, to the next wealthy person who thinks they can make another 100k profit by holding and selling after an year.
I would have thought that the pandemic and travel restrictions would have effectively “banned foreigners from buying homes” for 2 years. If home prices haven’t fallen during pandemic, then the reason why prices are high is not because of foreigners. The government is trying to point to a scapegoat rather than trying to get to the root cause.
Don’t get me wrong. Cars have their in place in society but their current role is overstated and NA city design shows it (massive parking lots, expensive housing).
Earlier quoted context omitted.
It could be that there is a sufficient amount of housing (built or being built), but that it is often not occupied on account of just being an asset in a wealthy person’s portfolio. In this case it could be seen as wasteful to build more, and too much of an oversupply could lead to an economic collapse if it’s on a big enough scale. The other possibility is that they are building more homes, and want them to be purch…
>> being an asset in a wealthy person’s portfolio Why wouldn't that wealthy person rent the property out and get better ROI? Keeping it empty does not make sense to me.
If the main goal is to park the cash somewhere outside the person's country, they presumably have "enough", so they don't want to deal with all this.