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

Re: Canada bans foreign home buyers for two years

#671

Post by yokoprime » Tue, Apr 19, 2022, 7:07 PM UTC

BlargMcLarg wrote: post #654

seanmcdirmid wrote: post #557

Earlier quoted context omitted.

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…

> (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

Could you elaborate on what this paragraph means? How do we "lock" ourselves in here in Europe? I can go out _today_ buy a rundown house and tear it down. If the cost of renovating it exceeds the cost of building new, it's financially sound to do. Unless i'm buying some historically important building there are zero restrictions.

Re: Canada bans foreign home buyers for two years

#672

Post by RangerScience » Tue, Apr 19, 2022, 7:08 PM UTC

xapata wrote: post #659

clpm4j wrote: post #582

Earlier quoted context omitted.

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.

That (first) either assumes demand remains constant, or requires measuring actual cost vs theoretical cost instead of simply actual; and second, assumes that there aren't complex interdependencies - ie, more luxury housing can make an area more desirable and increase demand more than it increases supply - arguably that's the goal, since otherwise you're literally building places people want to live in less than what's already available.

Re: Canada bans foreign home buyers for two years

#673

Post by homonculus1 » Tue, Apr 19, 2022, 7:09 PM UTC

seanmcdirmid wrote: post #636

homonculus1 wrote: post #579

Earlier quoted context omitted.

Great plan, for a favela

Tokyo is the farthest possible away you can get from a favela.

>[homogenous Japanese population] is the farthest possible away you can get from [unrestricted immigration from the southern hemisphere].

Why yes, indeed, it is!

Re: Canada bans foreign home buyers for two years

#674

Post by freeone3000 » Tue, Apr 19, 2022, 7:09 PM UTC

MAGZine wrote: post #597

cosmiccrisp wrote: post #565

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. I don't agree that this is the root cause. The root cause is the artificial demand on housing created though our mass immigration policy. Canada accepts _at least_ 500,000 people per year through various channels, "temporary" foreign workers, international stud…

In what world are "temporary" foreign workers buying homes in Canada? With what salary? Same with Refugees, students. Funny how in the first hundred years in Canada, we didn't have any issue with housing costs, despite accepting vast amounts of refugees. I'm not saying it's not making the problem worse, but to SOLELY pin it on them is IMO willful ignorance. if we banned all immigrants, of any kind, tomorrow, would Ca…

Temporary Foreign Workers is everyone with a work permit for their first three years (or longer!) regardless of qualifications -- NAFTA means doctors, engineers, and software developers are TFWs for a few years at least until/unless they apply for permanent residency. The idea that they are somehow less wealthy than the average immigrant is incorrect. So to answer "with what salary?": The one from their jobs.

Re: Canada bans foreign home buyers for two years

#675

Post by TimPC » Tue, Apr 19, 2022, 7:10 PM UTC

kspacewalk2 wrote: post #574

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,…

I agree that this is the root cause, and it remains a third rail in Canadian politics. The province of Ontario commissioned a "Housing Availability Task Force" to do a [report]( https://www.ontario.ca/page/housing-affordability-task-force... ) spelling out the problem. They identified under-supply due to land use restrictions as the primary cause. The government ignored it and addressed secondary issues with lame ban…

The recommendations of the committee reflect the fact that they had only one month to work in and as such severely limited the consultations they did. To take just one example of how ridiculous some of the conclusions are: They recommend forcing any municipality to accept 6 to 11 story buildings on any street that has a bus route regardless of whether that bus route actually reaches the building or not. This is a huge deal in Canada as many streets are absurdly long. Yonge Street for example is the longest street in the world and effectively transitions into a highway through rural areas. Still this policy says you could build an 11 story building without providing parking in any small township on Yonge Street because it has a bus or subway route while it's in Toronto.

Re: Canada bans foreign home buyers for two years

#676

Post by brewdad » Tue, Apr 19, 2022, 7:10 PM UTC

TimPC wrote: post #192

adamwathan wrote: post #170

Earlier quoted context omitted.

Yep, house on my street was listed for $950k a few weeks ago and sold for almost $1.4m. In my area (Kitchener/Waterloo), every house is selling for $250k-$500k above asking.

Houses are listed artificially below market to expand interest and create bidding wars. No one expected to sell for $950k and if that was the only offer they got it would have been rejected. I had this experience on a property in Toronto where they listed at $1.5 million didn’t get a bidding war, rejected our offer, relisted at $1.71 million and eventually sold. Above asking is a meaningless number because asking isn…

There was a time in the not too distant past where asking was exactly what a house was expected to go for. When I bought my current home in the early 2000s, most homes went for under asking price by a small bit.

Re: Canada bans foreign home buyers for two years

#677

Post by freyr » Tue, Apr 19, 2022, 7:11 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,…

This is a policy addressing one side of the supply-demand equation.

I think most people would agree that measures can be taken on both the supply and demand sides. It’s a rather extraordinary claim to suggest that root causes don’t exist on the demand side, and that the issue can only be addressed from supply side. That’s an opinion on a debatable topic stated as fact, and it may be a popular opinion among the HN crowd, but that doesn’t make it more of a fact.

If foreign buyers are using Canadian housing as an investment vehicle and to park assets, that additional demand decreases supply for Canadian citizens who require housing for shelter.

Of course, they can (and should) directly address the supply side as well. But there’s the possibility that foreign buyers’ demand will continue to outpace supply, leading to ghost cities like there are China, with 65M+ empty homes. Canada is under no obligation to perpetuate that.

Re: Canada bans foreign home buyers for two years

#678

Post by strikelaserclaw » Tue, Apr 19, 2022, 7:12 PM UTC

sefrost wrote: post #492

strikelaserclaw wrote: post #461

Earlier quoted context omitted.

Essentially young people will probably need to migrate and start a fresh in some underdeveloped city. I'm a millennial and this seems like it will be the case for me too. The older generations essentially rode a big wave to prosperity, our generations will essentially be riding the wave as it is collapsing, while not quite as bad as the great depression generation, millenials, gen z, alpha will need to build a new. I…

I often wonder if we could start a movement of young people to start afresh elsewhere. We are the workers and the lifeblood of the cities we can't afford. Could we pick a city and move in on it?

yes as long as you don't need to stay where the old generation is order to access capital. I think in the future people will be able to secure capital even without meeting in person.

Re: Canada bans foreign home buyers for two years

#679

Post by andrei_says_ » Tue, Apr 19, 2022, 7:14 PM UTC

johnnyanmac wrote: post #530

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.

>how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in. I imagine there are enough homes in both America and Canada (they are two of the largest countries after all). But it's all about location. Very few can even afford to move out to the middle of nowhere just to own land. And not many people that can are willing to turn their potentially short commut…

In Los Angeles 90 minutes is a very short commute. The average for my colleagues is 120 min and many have a 160-180min commute. Per day. Usually worse on Fridays.

The waste of time, energy and the resulting pollution are mind blowing.

Re: Canada bans foreign home buyers for two years

#680

Post by 99_00 » Tue, Apr 19, 2022, 7:14 PM UTC

That's good but not good enough. Because many foreign buyers are Canadian in name only. So the measure will not succeed.

The Astronaut families(1) need to be cut out of the housing market. An Astronaut family is a privileged family where typically the husband works in Asia for high income and low or no tax, while the wife and children live in Canada. They don't declare their foreign income (2).

>A revealing new “super-diversity” website created by a University of B.C. geographer, Daniel Hiebert, shows nine of 10 recent Chinese immigrants arrive in Metro Vancouver with enough money to immediately buy homes. But only half hold down jobs during their first five years in Canada, while four of 10 report they’re surviving on low incomes.

They are eligible for low income benefits, free healthcare, subsidized education at world class universities (3). They make money in a low tax, low social safety net jurisdiction and live in a high income tax high safety net one.

They are taking advantage of an income/tax arbitrage that needs to be closed.

Many disadvantaged POC immigrants want to come to Canada to improve their lives and the country. But the privileged families take away their spots, increase housing prices, segregate themselves, and contribute little.

(1) https://en.wikipedia.org/wiki/Astronaut_family

(2) https://vancouversun.com/opinion/columnists/douglas-todd-how...

(3) https://www.narcity.com/vancouver/ubc-ranked-one-of-the-best...