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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

#701

Post by mzs »

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 has most to do with being a signal to investors that Canadian housing is not a safe place for their money and that has the largest likelihood of having a more lasting effect beyond two years.

Re: Canada bans foreign home buyers for two years

#702

Post by BitwiseFool »

twblalock wrote: post #599
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…

When more people show up, you should build more housing. Canada is a big place with a small population relative to its size — you have plenty of space. Your argument might work if Canada was a small island like Singapore, but it is one of the largest countries by land area in the world. What prevents you from just building more housing in all that extra space you have? Zoning laws and nimbyism.

>"What prevents you from just building more housing in all that extra space you have?"

That's the wrong way to look at the problem. Developers can already build in the hinterlands, but there's virtually no demand to do so because the economic activity is concentrated in the established cities. You also run into the Siberia problem where despite having massive tracts of "free/undeveloped" land in the taiga, actually inhabiting it is very expensive because of how brutal the weather can be. Unless you have something like a literal gold mine or oil well, the expense of heating the buildings and maintaining the equipment is not at all economically viable.

Re: Canada bans foreign home buyers for two years

#703

Post by onlyrealcuzzo »

admax88qqq wrote: post #573
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…

> A culture that abhors second hand housing (so structures don't appreciate like land does). Housing that depreciates is no longer a sound investment That sounds tremendously wasteful. All housing will have to be built new now? > (d) Not very open to immigration at all, have a decreasing population. This is probably the biggest reason housing is depreciating in Japan, especially outside of Tokyo.

> That sounds tremendously wasteful. All housing will have to be built new now?

It is if you're building concrete houses common in much of the world.

If you're building houses that are common houses in Japan, it's not nearly as bad.

When you think of a house as something that not only you will live in - but also will be the vast majority of your net worth that you pass down to your children - then building houses the Western way makes more sense.

When a house is just something you live in - you think of it more like renters do.

Re: Canada bans foreign home buyers for two years

#704

Post by [deleted] »

lwkl wrote: post #627
hpkuarg wrote: post #584

Earlier quoted context omitted.

For example, it would be nice to be able to build a dormitory- or barracks-style high-density, low-creature comforts housing, where multiple rooms may share a common bathroom and a kitchen, in areas with high homelessness to give those folks a place to call home. This is not currently legal in many jurisdictions due to building code limitations. I might feel that a gigabit fiber connection is necessary to maintain ba…

What is more affordable than Gigabit Fiber? Fiber infrastructure is cheaper to build than copper after all.

[deleted]

Re: Canada bans foreign home buyers for two years

#705

Post by mzs »

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…

It's not about what percentage is foreign owned, but by how much said foreign investment has raised median prices.

Re: Canada bans foreign home buyers for two years

#706

Post by cardamomo »

tick_tock_tick wrote: post #694
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…

> build affordable housing Lets build shitty buildings that will last for decades. Affordable housing is and will always be a horrible idea. Build and build until you get a surplus and suddenly tons of housing is affordable.

I agree with this, minus the "shitty buildings" part. The way to create more affordable housing is to create more housing period. I do feel that they should be homes they people want to live in, though!

Re: Canada bans foreign home buyers for two years

#707

Post by munk-a »

tick_tock_tick wrote: post #694
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…

> build affordable housing Lets build shitty buildings that will last for decades. Affordable housing is and will always be a horrible idea. Build and build until you get a surplus and suddenly tons of housing is affordable.

This may be a healthy long term outcome but a lot of people have a good portion of their value parked in their home - if there is a sudden oversupply how will you cousin the economic and social shock as millions of middle-class folks suddenly lose their wealth while upper class folks mainly invested in the stock market come out the far side with even more wealth?

This is not an easy problem - and as soon as you try and alert people to the fact that you're going to fix it the market will respond and the problem will occur.

Re: Canada bans foreign home buyers for two years

#708

Post by kodah »

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…

Just throwing my two cents in here from the Bay Area and in a similar market. The things that are wrong with real estate aren't headline producing or interesting.

- Blind bids sound completely unethical. Why are real estate agents enabling this? Are they not bound to a code of ethics?

- Allowing buyers to offer cash on top of the value of a home should be illegal. You should be allowed to sell your home for what it appraises for, no more. Again, why are real estate agents enabling this behavior?

- Requiring buyers to submit letters, photos, and videos in order to buy a home is insane. They did away with this in California, but is it gone everywhere else? Another question of real estate agent ethics.

- Stop allowing companies to acquire residential real estate. This just, doesn't even make sense.

Patch these things up and you'll have major progress in freeing up a lot of real estate transactions and overvaluations.

Re: Canada bans foreign home buyers for two years

#709

Post by jjav »

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.

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

Not really: Say there's one free acre of land in town. You could build one mansion on it, or a highrise with 100 apartments.

Building the mansion isn't going to move the needle on any existing housing at all, as it's just one unit.

Re: Canada bans foreign home buyers for two years

#710

Post by seunosewa »

munk-a wrote: post #707
tick_tock_tick wrote: post #694

Earlier quoted context omitted.

> build affordable housing Lets build shitty buildings that will last for decades. Affordable housing is and will always be a horrible idea. Build and build until you get a surplus and suddenly tons of housing is affordable.

This may be a healthy long term outcome but a lot of people have a good portion of their value parked in their home - if there is a sudden oversupply how will you cousin the economic and social shock as millions of middle-class folks suddenly lose their wealth while upper class folks mainly invested in the stock market come out the far side with even more wealth? This is not an easy problem - and as soon as you try a…

So why bother cutting off foreigners if you want your real estate to keep appreciating in value?
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