Canada bans foreign home buyers for two years • Hacker News Board

Re: Canada bans foreign home buyers for two years

#651

Post by switchbak » Tue, Apr 19, 2022, 6:52 PM UTC

RspecMAuthortah wrote: post #533

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…

Its actually much more endemic than this. To start off, Canada's service sector dominating economy means jobs are concentrated in cities like Toronto, Vancouver, Montreal etc. So most people want to move and live those places. To make it worse, the government has plans to bring over 1.2M people over next 3-4 years time range as immigrants who again because of the fact that our economy is not diverse enough, tend to s…

There's stories of professional couples - both doctors - who can't afford a place in Vancouver. It's completely crazy there. I consider myself lucky to have got a foothold (well) outside the city when I did.

I can't imagine how bad it'd have been with the Liberals (provincial) still in power.

Re: Canada bans foreign home buyers for two years

#652

Post by vkou » Tue, Apr 19, 2022, 6:52 PM UTC

oneoff786 wrote: post #598

vkou wrote: post #546

Earlier quoted context omitted.

> The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting, NIMBYism. You're conspicuously avoiding low interest rates and 30-year mortgages from that list. When people can borrow against their entire life's earnings to buy a home, the price of a home will trend towards that of a person's entire life's earnings. Limiting maximum…

Would it? Or would it simply push home ownership further out of reach and favor landlords with capital?

To rephrase my point: What do you think would happen to the price of the average home if we printed, and handed out, each man, woman, child, and dog in Canada a million dollars?

My guess is that it would increase by ~2.6 million.

But it would certainly level the playing field between the average person and 'the landlord with capital'.

So if we are so concerned about keeping the average Joe up with that landlord, why don't we go ahead and do it? [1] It's not like it's hard to run the printing presses!

[1] Unfortunately, we do do it, except instead of just handing this money out, we wrap it up in decades of indentured mortgage payments, instead. The net result is the same, with the addition of a colossal wealth transfer from borrowers to lenders.

Re: Canada bans foreign home buyers for two years

#653

Post by wizee » Tue, Apr 19, 2022, 6:52 PM UTC

alar44 wrote: post #559

weeksie wrote: post #511

Earlier quoted context omitted.

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.

I think the problem is that people want to buy 3 bedroom homes with a 3 stall garage on 2 acres of land. In my market, there are tons of affordable homes, but they aren't brand new, huge, with a ton of land. People are going to have to pay for that. It's a matter of keeping up with the Joneses from my perspective. People just don't want an average size home built in the 60s. They need a brand new 3k SQ ft home and bi…

I Ontario at least, houses in the middle of nowhere are still absurdly expensive. Getting permission to build anything anywhere is hard.

Re: Canada bans foreign home buyers for two years

#654

Post by BlargMcLarg » Tue, Apr 19, 2022, 6:54 PM UTC

seanmcdirmid wrote: post #557

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,…

We really should follow Japan on this: (a) National zoning (b) A culture that abhors second hand housing (so structures don't appreciate like land does). Housing that depreciates is no longer a sound investment. (c) Liberal definition on minimal standard housing to rent (central heating not required, toilets can be shared, no personal shower or even a shower at all in the building you are renting a room in, small spa…

(b) is the biggest one. It doesn't make second hand unlivable, it just stops putting a premium on things which clearly aren't premium (unlike say Europe). It also makes it easier to tear things down in case of future needs, whereas Europe tends to "lock" itself in, creating a market which is very inflexible.

>(c)

Keep in mind 1LDKs (living room, dining room, kitchen) come with everything you'd expect a full apartment to come with, and are still very cheap in Tokyo compared to most metropolises and big cities. Many DKs also come with personal shower, small kitchen and toilet. Their spaces are generally on par with what you'd get in bigger European cities, for an equal or lower price. Not bad considering it is Tokyo.

>(d)

I mean, between the US and Japan, Japan isn't that much more difficult to immigrate to, unless you expect to get by with just English. Decreasing population also isn't a problem considering population numbers are getting far too big for comfort among developed countries.

Re: Canada bans foreign home buyers for two years

#655

Post by mise_en_place » Tue, Apr 19, 2022, 6:54 PM UTC

rasz wrote: post #575

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,…

>Foreign investors jump into the housing market because the current system ensures that the supply some do, others just want to safely park capital away from their own government reach (China/Russia/various *stans/corrupted countries).

The real reason is that those foreign investors are productive and have excess capital available to invest. They are from creditor nations, not debtor nations.

Re: Canada bans foreign home buyers for two years

#656

Post by johnnyanmac » Tue, Apr 19, 2022, 6:54 PM UTC

andrewmutz wrote: post #569

johnnyanmac wrote: post #537

Earlier quoted context omitted.

>You can always build more dense housing on land that is in high demand. you CAN. But that takes a while. There's always something under construction in Califnornia and a good portion of that is trying to build more apartments and housing. The time to make those don't keep up with the influx of people emmigrating to LA or otherwise leaving the parents' homes to seek their own lifestyle. It's honestly a more feasible…

We dont have a shortage of dense housing because it takes to long to build We have a shortage of dense housing because it is illegal to build dense housing in the places it should exist, and where it is legal, community review processes quickly shut it down

It's a bit of both, at least for my state specifically. There is a bunch of gatekeeping, but also some necessary restrictions and codes in California which is stricter than most other states, but necessary given its history. You can't take shortcuts anymore here like you could in the 60's (or heck, even in the 80's in terms of Los Angeles).

It's a a long and expensive process and I wouldn't be surprised if some deals fell through something because the minimum expenses exceeded what some potential clients expected.

Re: Canada bans foreign home buyers for two years

#657

Post by hristov » Tue, Apr 19, 2022, 6:56 PM UTC

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,…

When you liberalize zoning you get slum cities. This has already happened many times in latin america, india and africa. It also happened in America when we had liberalized zoning. (See, for example, the history of San Francisco, and New York).

I am all for increasing density in places where there is high demand for housing. But a lot of people are living in this libertarian fantasy that all you have to do is liberalize zoning and you will magically get a perfect high density city like Singapore (which ironically has some of the strictest zoning in the world) and not a sea of slums (which actually happens in the real world when you combine high demand with no zoning).

I think cities should increase density when they see high demand for housing. But they should do it smartly by providing services and infrastructure for more citizens when allowing higher density buildings.

The most important service for high density living and the first pain point a city hits when population increases is transport. So if you want higher supply of housing, the most important thing to do first and foremost is to vote for all mass transit initiatives and try to convince your city leaders to put in more mass transit. Once the mass transit is there it will be far easier to put in apartment buildings and increase density without choking the city in traffic.

Re: Canada bans foreign home buyers for two years

#658

Post by switchbak » Tue, Apr 19, 2022, 6:57 PM UTC

jejeyyy77 wrote: post #454

alistairSH wrote: post #272

Earlier quoted context omitted.

You say that, but the fact you didn't bid $25k+ initially tells us otherwise, no? Here in DC metro, people are massively over-bidding (relative to list price) because they've already bid/lost 5-10 homes in the last few months. So, they go in strong, $100-$150k over on a $600k list price isn't uncommon right now.

Blind bidding leads to more conservative offers because noone wants to grossly overbid on a house. The ceiling is basically what you think is "fair". The seller will then make a decision with very little back and forth - generally they will give you one chance to "improve" your offer. Now, in an open bidding system, you are literally in competition for who can/is willing to pay the most for the home. The ceiling is w…

That kind of rationality is rarely found in a hot market. You'll essentially be driven to massive overbidding due to the highest bid in the group. In a big enough market with enough demand, you can be sure that high bid will be well beyond a rational amount. Fairness has essentially nothing to do with it.

Once you lose 5-10 bids, you'll either give up on owning a home, move to the country or start upping your bid to suit.

Re: Canada bans foreign home buyers for two years

#659

Post by xapata » Tue, Apr 19, 2022, 6:57 PM UTC

clpm4j wrote: post #582

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,…

Eliminating a subset of buyers, i.e. slightly decreasing demand, is an easy and obvious action to take. Will it have a significant and long lasting effect? Very likely not. But when examining the supply-demand equation, it's painfully obvious to say "foreigners who don't live here should not be allowed to buy residential housing". It's way, way easier than incentivizing developers to build affordable housing and deal…

> incentivizing developers to build affordable housing

But that's unnecessary. If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable.

Re: Canada bans foreign home buyers for two years

#660

Post by reducesuffering » Tue, Apr 19, 2022, 6:58 PM UTC

3qz wrote: post #352

symlinkk wrote: post #319

Earlier quoted context omitted.

This is well written and is something I noticed too during my own house hunt: houses owned by teachers, plumbers, and car mechanics were getting fought over by engineers, doctors, and lawyers.

A fun thought experiment is trying to imagine what career an 18 year old today should work towards if they want to own one of those homes. VC or Onlyfans? How can anyone plan for the future when prices might double between the start and end of a degree? They did for me… I think the only option left is moving away. Everyone in tech is already doing it

House prices are greatly artificially inflated by zoning restrictions, and this is seriously hurting western people going forward. However, a smart 18 year old can still work towards making $200k/yr compensation as a software engineer within a few years, even remote, where single family homes on an 8k sqft. lot are $400k across the US.