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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

#251

Post by kitten_mittens_ »

cmrdporcupine wrote: post #243

Canada has more housing supply per-capita than the US and many other western countries, but housing prices that are multiples higher (when adjusted for household income). Many analysts have pointed out that Canada in general does not have a housing supply problem. Or not a particularly bad one. What we have is a more generalized housing market problem: bad or badly regulated realtor practices, excessively low interes…

> Canada has more housing supply per-capita than the US and many other western countries...

Even in the Vancouver and Toronto metros?

Re: Canada bans foreign home buyers for two years

#252

Post by throwawaycities »

to11mtm wrote: post #246
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…

PARTS of blind bidding make sense, from an unfortunate necessity standpoint. The primary scenario that comes to mind is where the neighborhood finds out Joe Outsider is the leading bidder, and they -really- don't like him for a reason they shouldn't. Blind/sealed bids help prevent Joe from getting specifically targeted for being outbid. (To an extent.) I'd love for a better solution to exist though.

Do you have data on how often neighborhoods come together as a collective and pool their money to bid on a property, not with the intent of actually purchasing but just to drive up the price because they don’t like the prospective buyer?

Re: Canada bans foreign home buyers for two years

#253

Post by Ekaros »

waqf wrote: post #242
dale_glass wrote: post #114

Earlier quoted context omitted.

You can't have enough supply of housing, because for housing location matters a lot. There's only so much room in the center of the capital, and making more costs a titanic amount of effort. Even that runs out eventually, as you can only build so high. Otherwise, why would we be having a problem? Move to Serbia and buy an apartment for $40K.

Serious question, what should I consider before moving to Serbia and buying an apartment for $40k?

Generally location, services and availability of work... Might even have services, but no work... That is for Finland. Like I see 32k€ for 3 bedroom house, with relatively big plot. 2km from "town" center... What explains it is area losing population.

Re: Canada bans foreign home buyers for two years

#254

Post by techolic »

jejeyyy77 wrote: post #238
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 disagree. IMO, blind bidding is suppressing prices not inflating them. Here’s why, as someone who has been on the ground and lost a few offers because we didn’t want to overbid. After the sold price was released, on multiple occasions we thought “damn! we’d have our that and $25K on top to get it had we known”. In a blind bidding system, you bid what you think the house is worth. In an open bidding system you start…

> you bid what you think the house is worth

Except you're rarely sure how much it's worth. The market is fluid, the psychology is working on you, and the feedback takes too long that by the time you know how much you missed it's too late to learn much from it.

Re: Canada bans foreign home buyers for two years

#255

Post by NamTaf »

michaelje wrote: post #154
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…

>> Australia tried this with tragic results Australian living in Canada here - unsure what the tragic results were? It’s helped a number of my friends buy their first home - with a small (~$10k) credit /reduced stamp duties and taxes on the first home owned and lived in (ie not an investment). Negative gearing has been far more impactful in increasing the cost of housing, with people buying multiple homes for investm…

It’s largely understood (I am in a pub halfway across the world and have no specific citation) that the FHBG just bumped the purchase price up by that amount. In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity (in that, few limit themselves to less), and many FHBs are competing against each other for a similar cross-section of the market, so grants are easily absorbed by total prices because now FHB B can bid [x] higher and will.

I agree that negative gearing is far more impactful, but I certainly don’t believe my FHB grant helped me enter the market. It just meant I paid that much more to a seller for the same thing.

Re: Canada bans foreign home buyers for two years

#256

Post by dale_glass »

waqf wrote: post #242
dale_glass wrote: post #114

Earlier quoted context omitted.

You can't have enough supply of housing, because for housing location matters a lot. There's only so much room in the center of the capital, and making more costs a titanic amount of effort. Even that runs out eventually, as you can only build so high. Otherwise, why would we be having a problem? Move to Serbia and buy an apartment for $40K.

Serious question, what should I consider before moving to Serbia and buying an apartment for $40k?

Well, just a few things that come to mind:

* Speaking the language -- in some places they don't speak much English, and certainly don't do official paperwork in it.

* Local laws

* Safety

* How much stuff you need is going to be nearby

* Internet access

* Local culture

* Employment

* Friends and family

Like, I don't know much about Serbia (just looked up where housing is cheap), but from what I hear I could get a pretty good deal if I moved to Russia -- they're desperate for tech workers and offering some very good perks regarding mortgages and so on. But on the other hand, is living in Russia that good of a deal right now? I don't think so.

They've got a bad government, slow and very restricted internet access, a not terribly pleasant society overall in my impression, and the economy is circling the drain due to all the sanctions.

Re: Canada bans foreign home buyers for two years

#257

Post by cle »

libertine wrote: post #62
user3939382 wrote: post #53

Related, I’m concerned about the trend of megacorporations gobbling up single-family homes which appears to be happening in the US and Canada. I wonder if it’s possible to construct a law that would limit corporate ability to acquire these assets while making it possible for families to do so. Unfortunately, even if there is, politicians at least in DC seem to have zero motivation to solve political problems unless t…

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?

As a renter, I preferred to rent from a corporation with predictable, reliable property management. I preferred living in apartments for exactly this reason. Houses managed by individuals were always way more annoying due to hit-or-miss management issues.

(I agree that corporations hoarding housing is a problem...but they do bring value in some specific areas, even if net value is negative.)

Re: Canada bans foreign home buyers for two years

#258

Post by noirbot »

jejeyyy77 wrote: post #234
TimPC wrote: post #196

Earlier quoted context omitted.

It’s still quite possible to stretch yourself. Variable mortgages are common and interest rates are going up at a rapid clip. It’s possible for them to rise further than the stress test numbers. Refinancing in five years may be painful if you got a mortgage at 1.5%, stress tested for 3.5% and refinanced at 5%.

Stress test currently means you need to qualify at 5-6% if you have 20% down. If you are putting less than 20% then the stress test is even higher. I doubt we will see 5-6% interest rates in the next 5 years.

Tell that to the 5.1% rate a friend of mine just got on a new home purchase with >20% downpayment. I dunno if rates are a lot better in Canada or something, but we're already in 5-6% range in the US for some properties. They had excellent credit too.

Re: Canada bans foreign home buyers for two years

#259

Post by chii »

joelthelion wrote: post #191
chii wrote: post #188

Earlier quoted context omitted.

Why should investment properties be taxed worse than say, stocks? If property is expensive, it means there's a demand for it. The price is a good signal that the area needs more properties built. It's only the gov't (local gov't perhaps, or NIMBYs) that are stopping it from happening. Raising taxes isn't going to fix the problem. It only forces existing investors who are on the margins to get pushed out.

> Why should investment properties be taxed worse than say, stocks Because they are a fundamental human need, and in limited supply. Good land is fundamentally limited. You can't build more of it.

> they are a fundamental human need

shelter is a fundamental need, not the desire to own an asset. You do not need to purchase, as renting is much cheaper (esp. at current asset prices).

And while you cannot create more land (tho tell the dutch that!), you can build more dense. And in an area of growing population, this might be a good solution, as demonstrated in many other cities. However, people who would prefer a single family home with a backyard must be prepared to pay a premium for this privilege.

And my proposal of more investment will indeed help alleviate the lack of shelter by incentivizing more to be built! Taking away investment money for it will only mean a different group losing out vs the existing group. Policies shouldn't decide winners and losers - policies should be made win-win.

Re: Canada bans foreign home buyers for two years

#260

Post by seandoe »

jejeyyy77 wrote: post #238
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 disagree. IMO, blind bidding is suppressing prices not inflating them. Here’s why, as someone who has been on the ground and lost a few offers because we didn’t want to overbid. After the sold price was released, on multiple occasions we thought “damn! we’d have our that and $25K on top to get it had we known”. In a blind bidding system, you bid what you think the house is worth. In an open bidding system you start…

That doesn't make sense. If you really bid what it was worth to you, why were you disappointed that the house went for more because you would have paid it (and more)?
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