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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

#511

Post by weeksie »

huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

It'll be interesting in a couple years when prices are still crazy and someone has to come up with an excuse for why.

It's amazing to me how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in. It's always a search for exotic explanations like foreign buyers and mysterious empty apartments.

Re: Canada bans foreign home buyers for two years

#513

Post by dimitrios1 »

huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

The root cause of the supply constraint that ultimately gives real estate it's value is the land, and more specifically, the land being in a particular location. For example, a row of condos built right next to a major employer of the town, in the center of the city. That land is going to be valuable so long as that town exists, and as the population continues to grow, will only become more valuable. Adding more houses won't reduce the value of those condos the same way that adding more lanes to a highway doesn't reduce the congestion.

The idea that houses are appreciating assets doesn't come from some fundamental law or ideology. It comes from recognizing reality. There is only so much land where people want to live, and population tends to increase (we are talking about urban and suburban areas, of course), so the demand and price increase. It's pretty simple, really.

NIMBYism, zoning laws, permitting, those are always familiar and convenient boogiemen for people who don't want to do actual analysis of market factors. But, what you are really wanting to argue against is private property ownership.

Re: Canada bans foreign home buyers for two years

#514

Post by ihaveajob »

weeksie wrote: post #511
huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

It'll be interesting in a couple years when prices are still crazy and someone has to come up with an excuse for why. It's amazing to me how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in. It's always a search for exotic explanations like foreign buyers and mysterious empty apartments.

What concerns me, as a non-Canadian not living in Canada, is that if a separate cause (i.e. global recession) makes housing prices drop in Canada during this period, NIMBYs everywhere will use that as evidence that "it works", and will try to replicate elsewhere.

Re: Canada bans foreign home buyers for two years

#515

Post by saos »

huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

> Until we liberalize zoning, legalize building, and reject the idea that houses have to be appreciating assets, the issue will continue.

That’s it.

> reject the idea that houses have to be appreciating assets

Particularly this. This is the outlook in the UK and it so problematic because normal people want this "property empire". Its become a source of content creation on YouTube or boasting on social media platforms. So fustrating

Re: Canada bans foreign home buyers for two years

#516

Post by VHRanger »

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…

That wouldn't work.

You can always make more LLCs to dilute your numbers.

Ultimately we need to weaken corporate ownership of real estate

Re: Canada bans foreign home buyers for two years

#518

Post by ericmay »

throwaway894345 wrote: post #504
ericmay wrote: post #455

Earlier quoted context omitted.

Oh yea I definitely think EVs are the future and to the extent that we have vehicles, in the majority of cases they should be EV. I guess what I'd say here is that even at a reduced cost (which is arguable) for a "commute" (self-driving, etc.) you aren't going to get EVs cheap enough to offset b/c the very act of driving 10, 20, 40, miles to a job or driving a mile down the road to the grocery store is just incompara…

> If I had to completely armchair it here, if you looked at total impact to society, the environment, car accidents, you name it something like a gallon of gas in the US should really be about $20-$30/gallon but it feels like it's expensive at $5 b/c we're so used to the low prices Price per gallon is probably the wrong unit. You probably want $/mile. Car accidents get priced in via insurance. Environment isn't price…

> Electricity is already much less expensive than gasoline.

How I'd phrase that is: "Electricity is currently much less expensive than gasoline "at the pump". What I think is likely to occur is that as we switch over to EVs (I own one btw if that helps here) there will be continued pure electricity demand which is going to cause prices to go up and up. Everything runs on electricity, and soon cars will too. So I think the kWh price is going to go up, and be measured and scrutinized much more (you can make an app to calculate this, not so much with gasoline easily) and it'll be more measurable. But gasoline costs just aren't "counted" in the same way. So eventually it'll cost, idk, $20 to go 300 miles and people will think that it's expensive because you could do it with gas much cheaper in the past, but the problem with that comparison is you wouldn't have accounted for the externalities so you're not really getting true costs. I hope that makes sense where I was going with that.

I agree $/mile is the right unit, I was just thinking about how to isolate true gas cost versus true kWh rate in some way. I personally pay closer to the $.05 kWh rate at home, but I see peak rates in California hitting $.4/kWh and all I see is the writing on the wall for the rest of the country.

If I had to summarize:

We live in an era of extremely cheap energy. It may go on for another 50-100 years, who knows. Maybe it goes on forever. But it won't be from fossil fuels. And if energy becomes much more expensive and we haven't designed cities and transit for optimizing cheap/efficient energy costs we're beyond screwed. Relating it back to housing, I think it makes sense the housing is getting much more expensive and that this phenomenon is more than just "living somewhere cool" and part of the reason that people want to live in these "cool" places is exactly because the implicit energy costs are less. You don't have to drive to a coffee shop. You walk.

I guess one good thing about America is we have all of these navigable waterways so we won't have big food shortages as distribution costs can remain reasonable, at least in the mid west and the east.

-edit-

One startup idea I have is a way to truly measure your total energy expenditure. Right now I just get a bill in the mail and figure that it makes sense because it's sooooo cheap to run all of this stuff. What happens once energy becomes 5x more expensive? Well, I want to know how much it really costs me to run dual monitors. Maybe it's an extra $50/year I don't want to spend (just a contrived example).

Re: Canada bans foreign home buyers for two years

#519

Post by weeksie »

dimitrios1 wrote: post #513
huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

The root cause of the supply constraint that ultimately gives real estate it's value is the land, and more specifically, the land being in a particular location . For example, a row of condos built right next to a major employer of the town, in the center of the city. That land is going to be valuable so long as that town exists, and as the population continues to grow, will only become more valuable. Adding more hou…

You can always build more dense housing on land that is in high demand. In fact, doing that is the most obvious and effective way to keep prices low for desirable locales. Backed up by pretty much all the economic research on the subject in the last decade.

Re: Canada bans foreign home buyers for two years

#520

Post by raydev »

na85 wrote: post #508
alex_sf wrote: post #400

Earlier quoted context omitted.

There is plenty of housing for plenty of people in most parts of North America. The 'problem' is that what people _want_ is cheap housing in urban centers, a.k.a cool spots. Because that doesn't exist, we claim to have a housing shortage.

We do in fact have an affordability crisis in Canada. I bought a home in a small town outside Toronto (too far to be a commuter town) in 2017 for $425000, and sold it in 2020. We're friends with the people that bought it from us and on the same street in that same small town in Ontario, houses are going for $1M+ now. This is not entitled millenials wanting to live in Vancouver. This is the place where things are supp…

Just to add to this, we live in a town of ~50k people about 2 hours out of Toronto, and house prices are up 20% yearly since before COVID. 2-3 bedroom houses, are brushing up against $1million this year.

Not as bad as other parts of Canada to be sure, but most people living here have manufacturing jobs or are in the military. I don't see how this is sustainable, since there's nothing for rich people to do here.

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