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Canada bans foreign home buyers for two years

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Re: Canada bans foreign home buyers for two years

#221

Post by libertine »

usrn wrote: post #214
libertine wrote: post #62

Earlier quoted context omitted.

This is one of those things that a proper tax structure would do wonders - those who hoard housing should get a kick from a exponential tax. Like, what value are those corporations bringing to people, to the market, and to a country by hoarding houses other than controlling the renting market for some areas? How is that a good thing?

They'll just restructure it so each house (or small group of houses) is held by smaller corporations or other entities. In fact even smallish landlords already do that now but I think it's because credit gets cheaper that way rather than for taxes.

Those structures exist because they're allowed to exist, nowadays it's pretty easy to link those structures if governments wanted.

Try to dodge some IRS stuff and you'll see how efficient the government is.

Re: Canada bans foreign home buyers for two years

#222

Post by sbarre »

BobbyJo wrote: post #150
sbarre wrote: post #56

Earlier quoted context omitted.

The root cause in Canada is that a lot of the older generation, existing home owners, have put their investments in buying second or third homes as income properties, and for a lot of Canadians (I read that 1/3 of Canadian home owners have one or more additional properties) that's the nest egg now. For years now homeowners have used HELOCs (Home Equity Line of Credit), to effectively 100% finance an additional home p…

> all they did was follow the advice given to them by the market The market doesn't give advice, it's risk and return. Don't take more risk than you can handle is investing 101. In any case, if the market is unsustainable (non-productive assets appreciating several times inflation is indeed unsustainable), these people are going to get screwed regardless. Either completely later, or almost completely now. Maybe in th…

Yeah, my apologies for not spelling that out better, or using the wrong word here...

It was shorthand for "everyone else is doing it and having success, so lots of people jumped into the same boat to also make money"..

Advice was the wrong word, maybe "signal" or "momentum" would have been a better shorthand.

Re: Canada bans foreign home buyers for two years

#223

Post by mberning »

philliphaydon wrote: post #165

When ever this topic comes on people are like “ohh it doesn’t work” Well it doesn’t matter if it doesn’t work. It’s stopping something that shouldn’t be allowed to begin with. In NZ you could go on a website and buy a house despite the fact you had never set foot in the country. Even if this is only 5% of all buyers they are ruining the market for 90% of buyers because they cause prices to go up when they pay above m…

It also sends a message and sets the tone. The west needs to become much more economically hostile to countries that do not share our values or reciprocate from a policy standpoint. Why should the west make it easy to export work to countries that use defacto slave labor and have horrible human rights violations? We should also make it painful for companies wanting to do business in these places. Maybe if there were more pain involved on the other side of the equation they would take the environment and human rights a little more seriously.

Re: Canada bans foreign home buyers for two years

#224

Post by sjmm1989 »

tenpies wrote: post #219
pards wrote: post #98

I'm a homeowner in Toronto and I don't think this will help. They've eliminated a small number of buyers from the market but have added other incentives like a first home buyers tax credit that will only fuel the fire - Australia tried this with tragic results. >> working with provinces and territories to develop and implement a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding. Blind…

> I don't think this will help. You are exactly right, but this is by design. You're talking about the Canadian Federal Liberals. The Prime Minister is a trustafarian who got elected because his father was Prime Minister. Every major minister of their party owns several investment properties. The Minister of Housing and Diversity and Inclusion (what a combo!) owns investment properties. These people have zero interes…

Never trust a politician.

Trust only that they are a politician.

Re: Canada bans foreign home buyers for two years

#225

Post by inglor_cz »

11101010001100 wrote: post #207
RocketOne wrote: post #201

Im one of those 'greedy' old farts who owns more than one home. We have one for ourselves and 5 rentals. Im starting to agree with those who are feeling priced out of the market. What would make me stop buying homes? A graduated tax would. If there were no sales tax on the first two, and then 15% tax on the third, 25% tax on the 4th, and going up by 10% for each subsequent house, it would definitely make me quit buyi…

>What would make me stop buying homes? Are you saying you don't know what to do with your money?

Not the OP, but this is an interesting remark.

Stocks aren't as attractive as they used to be, because people seem to be pessimistic about the development of the economy. Stagflation is the word that keeps emerging again and again in conversations of people who never used it two years ago.

At the same time, cash is obviously losing its value.

So the only thing that attracts investment is real estate, which cannot be printed at will, nor can it really "stagnate" as long as certain cities act as a magnet for immigrants, domestic and/or foreign.

Basically, this situation reflects our collective pessimism for the future. If/when people start believing that strong economic growth is around the corner, stocks will soak up some of the money that now flows into bricks and mortar.

Re: Canada bans foreign home buyers for two years

#226

Post by cpwright »

chasd00 wrote: post #202
bitshiftfaced wrote: post #176

Earlier quoted context omitted.

> Sales almost never fall through. If the buyer cannot get financing etc, the seller keeps their 10% deposit. The seller cannot back out. In the states, once the purchase agreement is signed, the home goes through inspection at some point before the sale. The inspector finds a hundred little problems with the house, and the buyer can back out of the sale for any little complaint.

> The inspector finds a hundred little problems with the house, and the buyer can back out of the sale for any little complaint. But that’s a very well known risk. An agent will have a whole checklist of things to look at before putting a house on the market to minimize that risk. Also, buyers lose at least some money if they back out, there’s a nominal sum put up that you don’t get back if you decide to not buy once…

In my NY suburb, you do the inspection before the contract is signed. No money has yet changed hands, and it can be a point of negotiation or just walking away.

Re: Canada bans foreign home buyers for two years

#227

Post by gjhan »

bko wrote: post #217
pards wrote: post #98

I'm a homeowner in Toronto and I don't think this will help. They've eliminated a small number of buyers from the market but have added other incentives like a first home buyers tax credit that will only fuel the fire - Australia tried this with tragic results. >> working with provinces and territories to develop and implement a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding. Blind…

The question is why does something like blind bidding exist in real estate? It could exist in all sorts of places but doesn't. Imagine blind bidding when interviewing for a job. Write down the number you'd be willing to do the job for. Someone came in with a lower number, please resubmit. These weird market distortions in real estate have underlying causes. A lot of them are based off patchwork rules and regulations…

Employment, outside a handful of environments where salaries are public, is probably a great example of a market that is indeed blind bid - this is what a recruiter is doing when they ask what your “salary expectations” are.

Re: Canada bans foreign home buyers for two years

#228

Post by usrn »

libertine wrote: post #221
usrn wrote: post #214

Earlier quoted context omitted.

They'll just restructure it so each house (or small group of houses) is held by smaller corporations or other entities. In fact even smallish landlords already do that now but I think it's because credit gets cheaper that way rather than for taxes.

Those structures exist because they're allowed to exist, nowadays it's pretty easy to link those structures if governments wanted. Try to dodge some IRS stuff and you'll see how efficient the government is.

I think you underestimate what wealthy people and corporations will do to dodge taxes.

Re: Canada bans foreign home buyers for two years

#229

Post by pembrook »

peepop6 wrote: post #189
pembrook wrote: post #130

A quick look at the data suggests only about 2% of properties in Toronto and Vancouver are owned by overseas investors. Yes, housing is priced at the margin, but this won't do anything at all to prices over the long term. I'm sure this will be wildly popular politically, because people LOVE the idea that some foreign boogieman is the reason their children can't afford homes anymore. It's much easier to outsource your…

Quoted post unavailable.

Instead of attacking me personally and appealing to an undisclosed authority, I would love to hear a well-reasoned argument against the idea of it being a supply issue.

Combine this with the backdrop of 40 years of falling interest rates. Do you really think the foreign boogieman is having a larger effect than the simple explanation of restricted supply and falling interest rates?

Prices per sq. foot in Toronto recently surpassed Vancouver. There's no way Toronto has more foreign property investors than Vancouver.

Re: Canada bans foreign home buyers for two years

#230

Post by [deleted] »

raziel2p wrote: post #181
xyst wrote: post #29

Earlier quoted context omitted.

This. Root cause is crappy city planning and design; and emphasis on single family housing development. Many cities across North America are designed with urban sprawl and car centric travel in mind. Pedestrian and alternative forms of transportation are a second class citizen despite the ability to move people more efficiently than cars will ever do. Don’t get me wrong. Cars have their in place in society but their…

European cities without the problems you've mentioned are struggling with the exact same housing crisis.

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