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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

#821

Post by heavyset_go »

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.

The difference between 'luxury' housing and affordable housing is the facade, marketing and price, not quality.

Re: Canada bans foreign home buyers for two years

#822

Post by chaostheory »

specialp wrote: post #620
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 is not just that it is an attractive place to park wealth as far as ROI. It is attractive period because you can park your wealth in an obscured way in a place more fair than where you live. If you have a lot of money in places like China and Russia or if you have money from graft, it could all be taken away quickly. So these people are very willing to buy something real in a "safer" country, even if it has a nega…

> If you have a lot of money in places like China and Russia or if you have money from graft, it could all be taken away quickly.

I don't think people from Russia or China can do this anymore. At least the Russians can no longer do it in the West. As for the mainland Chinese, the CCP has blocked capital flight and they have even blocked cryptocurrency. This happened two years ago ie. unless they already got their money out of China two years earlier, they can't buy anything in Canada

EDIT it happened three years ago and not two years

https://www.scmp.com/economy/china-economy/article/3012312/c...

Re: Canada bans foreign home buyers for two years

#823

Post by handmodel »

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…

I'm actually happy they did it only because it will get people (at least the subset of people who follow casually and do care) to acknowledge that foreign buyers are not the root cause once a couple years pass and the data will be apparent.

Re: Canada bans foreign home buyers for two years

#824

Post by ejb999 »

rybosworld wrote: post #742
ejb999 wrote: post #450

Earlier quoted context omitted.

But this is the comment I was responding to: " I think it would be fine if my taxes were helping others to start out. " so that poster was saying having his taxes jacked up to help someone out is 'ok with them', and yet he has the power to help others out already - without the law forcing him/her to do it - he obviously thinks he can afford it, and is in favor of it - but he is not going to do it without the law requ…

Because as I alluded to, that person would fall behind in terms of purchasing power. Allowing your money to erode away is not going to affect the greater good. The incentives (taxes) need to be changed. Suggesting a change that you think is positive but not acting on it in the meantime is not virtue signaling.

>>Suggesting a change that you think is positive but not acting on it in the meantime is not virtue signaling.

Actually, it is the very definition of virtue signaling.

Re: Canada bans foreign home buyers for two years

#825

Post by ejb999 »

renewiltord wrote: post #646
ejb999 wrote: post #450

Earlier quoted context omitted.

But this is the comment I was responding to: " I think it would be fine if my taxes were helping others to start out. " so that poster was saying having his taxes jacked up to help someone out is 'ok with them', and yet he has the power to help others out already - without the law forcing him/her to do it - he obviously thinks he can afford it, and is in favor of it - but he is not going to do it without the law requ…

No, this is a classic group-action pre-commit. "I'd like to play a game of football if we're all up for it, otherwise let's go to the pub" "Why don't you just go play a game of football yourself, dude?".

not even close to the same thing.

Playing a game a football requires many players - helping out someone less fortunate than yourself requires zero involvement of others.

Claiming "if only other people would join in I would do the right thing', is worse than virtue signaling, it.s disgusting.

Re: Canada bans foreign home buyers for two years

#826

Post by handmodel »

worik wrote: post #738
jerf wrote: post #686

Earlier quoted context omitted.

There's a path dependency problem. In principle, had you just been building housing like that all along, investing in housing is not appealing as you shouldn't see significant gains in general. However, now that it is appealing, the investment itself pushes up demand, which pushes up the appeal of investing because now prices are going up, which pushes up demand, etc. Again, in principle, if you just keep building, t…

Market forces are not magic, nor the only method of economic planning. When markets work they are very good at finding prices. But when they fail you get this sort of thing. There needs to be a lot of planned intervention in the housing sector. Entities with a lot of capital need to build the houses that people need to live in where they need to live in them and then let them live in them. The market will not do that…

I live in Los Angeles and am lucky enough to rent on a street that is single family houses. It is illegal to build a duplex here, or a structure above 2 stories, even though each house must be 2500 sqft still.

People who are pro-market forces (such as myself) believe strongly that if you were allowed to build apartment buildings in neighborhoods like this that enough capital absolutely would be raised to raise supply. After all, you could take the current house I rent now and put in two walls for under 50k and start renting it out as a duplex two families but that is currently illegal. Hard to blame the market forces for this.

Re: Canada bans foreign home buyers for two years

#827

Post by ejb999 »

wnolens wrote: post #690
ejb999 wrote: post #233

Earlier quoted context omitted.

Quoted post unavailable.

I don't see it as virtue signaling. The opposite almost: doing what you suggest would help one person out (and unfair - how is that person selected?). As far as helping the bigger problem, it's a drop in the bucket and thus 99% for the feeling of righteousness. Besides, he didn't say his houses were empty or borderline slums. He's using his intelligence, capital, and capacity to take on risk and housing people.

>>I don't see it as virtue signaling.

Of course you don't.

Re: Canada bans foreign home buyers for two years

#828

Post by ejb999 »

creato wrote: post #567
ejb999 wrote: post #450

Earlier quoted context omitted.

But this is the comment I was responding to: " I think it would be fine if my taxes were helping others to start out. " so that poster was saying having his taxes jacked up to help someone out is 'ok with them', and yet he has the power to help others out already - without the law forcing him/her to do it - he obviously thinks he can afford it, and is in favor of it - but he is not going to do it without the law requ…

No, it means everyone should do something, including himself. But not himself alone.

why? only helping a few people is not good enough?

I can't help everyone, so I will just help myself?

I bet lots of multi-billionaires use the same twisted logic to justify their selfish behaviors.

Re: Canada bans foreign home buyers for two years

#829

Post by undersuit »

nine_k wrote: post #781
jjav wrote: post #709

Earlier quoted context omitted.

> 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.

I wonder why NYC has so few mansions, and so many high-rises.

The high rises in NYC are mansions.

Re: Canada bans foreign home buyers for two years

#830

Post by acchow »

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,…

Toronto has tons of upzoning. There are developments all over the city.

The problem is that your primary residence is a tax-advantaged vehicle in Canada (infinite tax-free capital gains). So the optimal choice is always to buy as much real estate as you possibly can. People also use their children to hold deeds when they want to expand into second and third homes. The tax advantaged status drives the Canadian housing bubble

People are regularly talking about "housing cannot be both a good investment and affordable". In Canada, it is a 'good investment' by tax law.

Look at how much real estate prices have diverged from rent in Toronto. It is mind-boggling. The gap's growth accelerated with COVID-era quantitative easing.

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