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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

#281

Post by alistairSH »

fratlas wrote: post #244
stevesimmons wrote: post #135

Earlier quoted context omitted.

In Melbourne, this is totally normal. Everyone stands in the street, prospective buyers, neighbours, and people starting their house search. The estate agent stands on the front step, acting as the auctioneer, using the rolled up "Section 32" document like a gavel. Typically the auctioneer draws out bids in $10-20k increments, then knocks it down with a "going once, going twice, going three times..." call. Just befor…

A designed process, very efficient at extracting the maximum price out of a stressful situation. It's a sad state of affairs in Australia right now.

But it's an open process. That it's close to optimal efficiency isn't a bad thing.

Imagine the same level of stress, but you have to guess what the other buyers are bidding. Do you bid low and hope everybody else does? Bid high, but risk overpaying?

Re: Canada bans foreign home buyers for two years

#282

Post by pembrook »

justaman wrote: post #236
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…

2%. But how much of that 2% has been in the last 5 years? I heard it was up to 1/3rd of all properties sold.

Canadian MLS says 600,000 properties sold each year. Over 5 years that'd be roughly 3,000,000 homes. 1/3rd of that would be 1 million homes sold to foreign investors.

There's only 1 million people globally (including Canadians) with a net worth over $10 million.

That means every single one of them would have bought a Canadian home in the last 5 years.

I mean Canada is nice and all, but does that seem plausible?

Re: Canada bans foreign home buyers for two years

#283

Post by alistairSH »

bitshiftfaced wrote: post #176
stevesimmons wrote: post #135

Earlier quoted context omitted.

In Melbourne, this is totally normal. Everyone stands in the street, prospective buyers, neighbours, and people starting their house search. The estate agent stands on the front step, acting as the auctioneer, using the rolled up "Section 32" document like a gavel. Typically the auctioneer draws out bids in $10-20k increments, then knocks it down with a "going once, going twice, going three times..." call. Just befor…

> 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.

This is only possible in a slow market.

Right now, in DC metro, all contingencies are being waived, bids are $100k+ over list on moderately priced homes, and the seller is demanding a 2-month free "rent" back from the buyer.

Both my home purchases have waived inspection. The second waived financing contingencies as well. This isn't uncommon, based on what friends and family have done.

Re: Canada bans foreign home buyers for two years

#284

Post by Ekaros »

throwawaycities wrote: post #252
to11mtm wrote: post #246

Earlier quoted context omitted.

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?

And aren't bids binding? They either have to buy, pay some penalty and still have the buyer get the house...

Re: Canada bans foreign home buyers for two years

#285

Post by beaconstudios »

BlargMcLarg wrote: post #190
beaconstudios wrote: post #160

Earlier quoted context omitted.

I can see a resurgence of social democracy coming soon as the problems with things like real estate investment and unrestricted emissions come home to roost. We've already seen a little bit of that with Bernie Sanders.

I can't speak for the US, but here in NL, I don't see things changing very soon for various reasons. Very few voters actually care to solve the issue. Home owners still far outweigh those who don't. Quite a few of the older generation bank on their property/properties to carry them through retirement. No one wants to see their house go under, even if they can realistically endure it without severe consequences. There…

> "Figure it out" mentality. Even if there is a national or even global trend, responsibility to solve the issue is pushed onto the individual. Or worse, global mentality shifts to accept what is going on. "Yeah buying was normal back in the day, now you rent. Get over it."

This is a symptom of neoliberal ideology - the acceptance of any market outcome, no matter how negative, as "natural" and to be accepted or at least left unchanged. That's the predominant narrative, but I think that could change. The reason I have some hope for a social-democratic turnaround is that the US has cultural hegemony, what happens there is broadcasted across the world through American media and other cultural exports. Currently, younger generations are engaged in a revival of left politics; this will almost definitely influence American politics in the coming years, and I'm hoping us Europeans (I'm from the UK) see some downwind benefit from that. There's already some smatterings of progressive politics in the UK, for instance - probably on a level comparable to 2012-2016 in the US. We even had our own Bernie in the form of Corbyn, and our far right resurgence is running low on steam thankfully.

Re: Canada bans foreign home buyers for two years

#286

Post by 1-more »

WithinReason wrote: post #180
jusssi wrote: post #167

Earlier quoted context omitted.

The question is, would an open auction be any better? The process will just happen at smaller increments. And you will have ghost bids to prop up the prices.

I would use a Vickrey auction: https://en.wikipedia.org/wiki/Vickrey_auction

This is how real time advertisement bidding is done.

Re: Canada bans foreign home buyers for two years

#287

Post by jwond »

GypsyKing716 wrote: post #66
tici_88 wrote: post #34

Foreigners, especially the billionaire type, can and have been setting up shell corporations through which to purchase Canadian real estate. The proposed measure will do nothing to stop this practice. The measures proposed by the Canadian government are likely just political posturing and indented to "pull the wool over the eyes" of Canadian voters because the housing bubble/crisis has reached epic proportions and ev…

This feels like nationalism, in delivery no matter how true it may be.

It's really crazy to me that so many people have apparently come to believe that it is bad for countries to implement measures that protect the interests and well-being of their own citizens above those of foreigners.

Re: Canada bans foreign home buyers for two years

#289

Post by [deleted] »

ranit wrote: post #237
jejeyyy77 wrote: post #166

Earlier quoted context omitted.

This is wrong on a few levels. 1) as someone who has been on the ground as well, I’ve lost a few offers because I was worried about over paying. On multiple occasions, after seeing what it sold for we thought “damn, we woulda paid another $25K on top to get it had we known.” 2) Canadian banks has a very conservative “stress test” for securing mortgages. This includes qualifying at much higher rates then is being offe…

> Canadian banks has a very conservative “stress test” ... Therefore it isn’t possible to “stretch yourself beyond any reasonable limits” “stretch yourself beyond any reasonable limits” means that you may not be able to pay your mortgage, it doesn't mean the bank won't offer it to you.

[deleted]

Re: Canada bans foreign home buyers for two years

#290

Post by Ekaros »

jusssi wrote: post #167
foldor wrote: post #131

Earlier quoted context omitted.

The theory of that, and the reality of it are two different things. As someone who has been on both sides of this in Ontario, I can tell you for a fact that blind bidding results in people over paying, and never knowing by how much. The stress of buying a home in the GTA has lead people to stretch their budgets beyond reasonable limits, and realtors have only made it worse now. In recent years it's started to become…

The question is, would an open auction be any better? The process will just happen at smaller increments. And you will have ghost bids to prop up the prices.

I think open auction really would be better. Allow full information on bids and participants can drop out when their absolute limit is reached.
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