321–330 of 1001 posts
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> In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity That's the wonderful part about lending - it's an arms race, where the lender always wins.
Until there's mass defaults
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I've been thinking a lot about this, and I think to promote everyone's owning a house, and even small-size investments, but to avoid megacorps the ideal would be something like: 1 house - tax breaks 2 houses - same taxes as currently for 2 houses 3+ houses - incrementally more expensive with each extra house Also there's a really nice law in Spain, born for the wrong reasons, that makes you pay more taxes if the hous…
Why should I, a small time REIT holder, pay more proportionately in property taxes than a celebrity in a Beverly Hills mansion, or even my landlord who only rents out a few, million-dollar units for that matter? I think every individual should be entitled to 500k in preferential property tax (1 million for couples), and every dollar above that should be taxed a lot higher. In places where there is high demand, new ho…
To decrease the return on holding property indefinitely, which prevents renters from building equity to the benefit of small-time REIT holders. The outcome of this is an increase in home ownership which has a host of benefits to society. It also helps economic benefits to stay in the local area. Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism.
What benefits do you see REITs provide to a community, beyond increasing your personal wealth?
Also, a hard cap of, say, 10 homes without increase would still allow REITs to exist depending on implementation.
What is _not_ desirable is a large financial firm like Blackrock or JPMC siphoning off the liquidity of the housing market.
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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.
And I don't see that ghost bids propping it up would be much of a problem, they'd risk winning? You could require registering names, putting a deposit down perhaps, no real need for it to be anonymous even?
> “Perhaps these foreign homebuyers don’t understand how easy it is to set up an anonymous shell corporation in Canada. Perhaps they stubbornly refuse to spend the extra ten minutes it would take to do so. Perhaps they just don’t like the word ‘shell’,” Trudeau explained. “But rest assured, for this incredibly tiny fraction of international homebuyers, the party is over.”
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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…
That “damn we would have paid X more” is exactly what it’s designed to encourage - we’re not good at calculating large numbers so once you’ve “made the decision” to pay $500k making a decision to pay $50k more is relatively easy (and seems like nothing). In a normal Dutch auction style situation you’ll pay $1 more than the second highest bidder, which is a bit more fair.
In a Dutch auction (regular dutch auction. Not reverse.) there is no second bidder. The price starts too high and drops until the first bidder to decide the price is low enough (as it drops) buys.
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…
All of this though (ending blind bidding, making buy and sell data publicly available, etc.) is just using a bucket to bail out the Titanic since the system is designed to have prices continuously rise since Canadians are in house debt up to their eyeballs and have no idea how else to actually save for the long term and any party that actually changed this would likely never get voted into power again, if they even continued to exist.
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This is correct. The Beaverton has a good satirical article that gave me a chuckle talking about this. https://www.thebeaverton.com/2022/04/canada-to-ban-foreign-h...
The Beaverton has been hitting it out of the park recently.
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The revenue equivalence theorem for auctions suggests it doesn't matter that much. Now, empirical testing has shown violations of this theorem, but the magnitude of the violations are not so huge as to really move the needle. Someone might be paying 10% more in a sealed bid first price auction than they otherwise would, but it's unlikely that it's more than that, and it may be a good deal less or none at all. No matt…
A 10% difference translates to a lot of money for a middle class homebuyer. That’s often enough to buy a new car.
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The revenue equivalence theorem for auctions suggests it doesn't matter that much. Now, empirical testing has shown violations of this theorem, but the magnitude of the violations are not so huge as to really move the needle. Someone might be paying 10% more in a sealed bid first price auction than they otherwise would, but it's unlikely that it's more than that, and it may be a good deal less or none at all. No matt…
A 10% difference translates to a lot of money for a middle class homebuyer. That’s often enough to buy a new car.
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…
We don't have implementation of the bill yet, just the budget line. Obviously the government knows about this problem, so if they take measures to prevent it, then we'll know they are actually serious. Note that a corporation is not consequence free. An owner occupied home pays no tax on capital gains. A corporation owned one is double taxed.
As a casual watcher of Yes, (Prime) Minister I'm sure they will take measures to get some votes but not solve the problem. The sweet spot is the point where you can gather most vote with a measure that causes as little change to the existing problem as possible.