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

Re: Canada bans foreign home buyers for two years

#921

Post by donthellbanme » Wed, Apr 20, 2022, 1:58 AM 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,…

The wealthy of the world should shouldn't be able to buy up our real-estate period.

In the USA, all it takes is a email, or phone call, from practically anywhere in the world and they own it.

At minimum we (USA) need to start with citizenship as a prerequisite. Oh yea, stop corporation for buying up precious stock too.

(Until we have more stock--the last thing we should allow is foreigners with funds buying our land. I have found it infuriating since I found out about how easy it is to buy here. Other countries do not let wealthy Americans buy land so dam easy.)

Re: Canada bans foreign home buyers for two years

#922

Post by rbanffy » Wed, Apr 20, 2022, 2:02 AM 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.

> If developers build more luxury housing

According to this reasoning, if Ferrari builds more cars, Fiats will get less expensive.

I don’t think that’s how it’s supposed to work.

Re: Canada bans foreign home buyers for two years

#923

Post by stazz1 » Wed, Apr 20, 2022, 2:05 AM UTC

MrMan wrote: post #469

la6472 wrote: post #386

Earlier quoted context omitted.

Nothing is better than sprawling outwards. Most of the white collar jobs can be done remotely , so commute is not needed. Most of groceries and other stuff can be delivered. A truck doing 100 deliveries is surely less traffic than everyone going to the supermarkets. And most importantly with sprawling outwards citizens can enjoy the outdoors and take care of their health. And even more importantly high density of pop…

this is objectively wrong. it may be the future but its not the way

I too wonder about the sustainability of the Mexico City paradigm. When land becomes precious, we re-pave and re-evaluate. In Japan (On the island of Japan), space is precious, if you are going to build it, it better last, and it better make sense to keep around. Until we reach a limit on land area, it seems that slime-mold-esque endless sprawl is somewhat inevitable. I do wish the opposite, that we would heed the lesson before driving off the proverbial cliff.

Re: Canada bans foreign home buyers for two years

#924

Post by cycrutchfield » Wed, Apr 20, 2022, 2:08 AM UTC

rbanffy wrote: post #922

xapata wrote: post #659

Earlier quoted context omitted.

> 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 According to this reasoning, if Ferrari builds more cars, Fiats will get less expensive. I don’t think that’s how it’s supposed to work.

If Ferrari sold 10 million cars per year, you don’t think that would have a downward pricing impact on other cars?

Re: Canada bans foreign home buyers for two years

#925

Post by akhmatova » Wed, Apr 20, 2022, 2:09 AM 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,…

The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting, NIMBYism.

You can believe that if you want to.

Any level-headed analysis of the situation, however, points to multiple factors at play, here -- dark actors with huge pools of dark money to park somewhere (that just so happens to be mildly appreciating on average) being one of them. A system which promotes and protects de-facto anonymization of luxury assets at scale being another. Truncating the root cause analysis simply to "supply" is simplistic at best.

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

As much as one may want to believe that this is the right fix in the long term -- even under the best of conditions, it will take years, more like decades to pan out. Meanwhile the housing market needs relief now.

Re: Canada bans foreign home buyers for two years

#926

Post by YokoZar » Wed, Apr 20, 2022, 2:10 AM UTC

rbanffy wrote: post #922

xapata wrote: post #659

Earlier quoted context omitted.

> 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 According to this reasoning, if Ferrari builds more cars, Fiats will get less expensive. I don’t think that’s how it’s supposed to work.

The vast majority of affordable cars are used cars. Used cars are cheaper when there's tons of new cars, and they get more expensive when new car production slows - prices jumped so much in the past two years that some used cars were sold for more than they were originally purchased for.

We treat that weird situation as obvious undersupply in the car market, but somehow expect it with houses. Why should old, used houses sell for more than their purchase price?

Re: Canada bans foreign home buyers for two years

#927

Post by liketochill » Wed, Apr 20, 2022, 2:18 AM UTC

acchow wrote: post #835

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…

Toronto has a different issue - the purchase price for a home has been rising far faster than rental rates. This is a bubble.

It depends on what value you assign to owning instead of renting. No landlord to deal with and being certain you don’t have to move for as long as you want are benefits to owning that are worth a premium over renting.

Re: Canada bans foreign home buyers for two years

#928

Post by xapata » Wed, Apr 20, 2022, 2:23 AM UTC

YokoZar wrote: post #926

rbanffy wrote: post #922

Earlier quoted context omitted.

> If developers build more luxury housing According to this reasoning, if Ferrari builds more cars, Fiats will get less expensive. I don’t think that’s how it’s supposed to work.

The vast majority of affordable cars are used cars. Used cars are cheaper when there's tons of new cars, and they get more expensive when new car production slows - prices jumped so much in the past two years that some used cars were sold for more than they were originally purchased for. We treat that weird situation as obvious undersupply in the car market, but somehow expect it with houses. Why should old, used hou…

People forget that houses depreciate. It's the land that appreciates.

Re: Canada bans foreign home buyers for two years

#929

Post by cowpig » Wed, Apr 20, 2022, 2:34 AM 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,…

I hear this all the time on HN, but I never see any data to back it up.

It's also a very broad statement: I never see any construction when I visit SF, but in Montreal everything is under construction all the time. There are a dozen new condo developments within a few blocks of where I live, and yet the prices of homes still rose something like 20% last year.

There isn't usually one The Root Cause for economic issues, so blanket statements about policies being "boogeyman politics" are the kinds of unlikely sentiments that I'd like to see backed up by significant evidence.

Re: Canada bans foreign home buyers for two years

#930

Post by seoaeu » Wed, Apr 20, 2022, 2:38 AM UTC

jachee wrote: post #862

alistairSH wrote: post #796

Earlier quoted context omitted.

Except, in a competitive/expensive market, the developer will pick the high-rise (almost) every time when allowed by law. Locally, when I see people complain about luxury housing being built, it's because the developer is building high-spec townhomes and selling them for $800k+. Instead of lower-spec townhomes at $500k. The developer can't fit appreciably more homes in the same footprint (they're all 3-4 stories tall…

> The smaller house they vacated is now open for somebody else Or, they didn’t sell it and are just seeking rent on it, now. For this effect to really work, the number of home-owners should equal the number of homes. Right now, there are many, many fewer home-owners than homes.

No, the number of homes has to be slighter higher than the number of residents. If a renter is living in a home then it isn’t going to waste!

(Slightly higher because it is mathematically impossible for anyone to move if there are no empty homes, and they sometimes have to sit vacant while being renovated or are in the process of being sold)