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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

#981

Post by vkou »

sangnoir wrote: post #915
vkou wrote: post #652

Earlier quoted context omitted.

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…

On the flip side, what do you think would happen to home ownership if the mortgage terms were set to be 1 year max? That ought to really lower the home prices, right? My guess is most homes on the market would be bought by private equity firms and retirement funds. There are a lot of confounding factors; just changing mortgage terms is not sufficient.

Building a modern home requires more than 1-person-year of resources and effort, so a 1 year mortgage term wouldn't make any sense. You can't make something out of nothing, so obviously, there would be a pricing problem in that situation.

Re: Canada bans foreign home buyers for two years

#982

Post by GFischer »

worik wrote: post #893
_3u10 wrote: post #846

Earlier quoted context omitted.

Vancouver and Toronto isn’t a housing market in any real sense of the word. Supply is fixed by government, interest rates are fixed by government, etc. If you took government control out of the market prices would plummet. Any plank will do, supply, financial backing or interest rates and the whole thing comes crashing down. That’s the real problem, how to cause a 20% “correction” and not 80%. My house is 8 hours fro…

Everybody blaming zoning. What is happening in Dallas which has no zoning rules? (Or am I thinking of Austin Texas?) I do not know, but it would be useful for this debate

I have coworkers in Dallas, and they bought for relatively cheap (about 1/3 of what is being mentioned for other places in the USA in this thread).

So I guess it works.

Re: Canada bans foreign home buyers for two years

#983

Post by jjav »

bombcar wrote: post #910
jjav wrote: post #766

Earlier quoted context omitted.

> You don't build to have your home last for more than 30-40 years, which can save some materials. I'm very skeptical it would save any non-trivial amount in materials. What would you leave out? Housing in the USA is already very cheaply built, 2x4s and drywall and the cheapest hardware they builder can get. Such houses easily last over a 100 years barring some disaster. To build a house that crumbles to unlivable in…

They “last” 100 years with pretty Constance maintenance - and the average house isn’t that old so the jury is still out on some of it. In many places tear down and rebuild is cheaper than remodeling, especially when energy costs are taken into account.

> They “last” 100 years with pretty Constance maintenance

It's no surprise to anyone that a house needs some maintenance, that's a given. If someone lives in it and keeps up with basic maintenance, it'll last many generations.

> the average house isn’t that old so the jury is still out on some of it

I suspect the average house will never be that old, simply because a lot more houses are getting built all the time bringing down the average.

But plenty of 100+ year old houses, even here in California where most construction is more recent.

> In many places tear down and rebuild is cheaper than remodeling

Remodeling is a whole different topic. Yes, remodeling a house to be much larger or much nicer (or both) can be very expensive.

But on the topic of simply living in the same house in the same configuration as it was originally built, for 100+ years (multiple generations surely), there's no need to remodel. Only maintenance.

Re: Canada bans foreign home buyers for two years

#984

Post by acchow »

liketochill wrote: post #927
acchow wrote: post #835

Earlier quoted context omitted.

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.

> 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.

The premiums you listed have always existed, there's no reason for them to grow now.

What's grown now is that, because home prices are rising, people look at the rising prices and want to take advantage of it. And the primary residence in Canada has infinite tax-free gains - so as long as prices rise, it seems like it makes total sense to pour as much as possible into housing. This is a bubble. Canadians think of housing as the best possible investment because housing prices are going up and its a tax-advantaged vehicle. Once prices start falling, we'll see this leveraged investment unravel quickly

Re: Canada bans foreign home buyers for two years

#985

Post by handmodel »

bhewes wrote: post #904
handmodel wrote: post #826

Earlier quoted context omitted.

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…

SB 9 pasted in Sept of last year that allows for duplexes on single unit lots. Here is the info for LA County https://planning.lacounty.gov/view/sb_9

I am very happy about SB9!

Though as a maximalist on this I'm still upset this is the best compromise we can get since the lot of this house is definitely big enough for more than just 2/4 units.

The house I live in is rented which means it actually wouldnt be eligible since the owner must live in the house for 3 years after turning it into a duplex.

Maybe this will incentivize owners of houses like this to sell to people who are willing to divide it in two? I hope so! But not sure.

Re: Canada bans foreign home buyers for two years

#986

Post by ng12 »

anamax wrote: post #979
ng12 wrote: post #819

Earlier quoted context omitted.

> Why are the current residents obligated to accept that change? They're not. They just need to admit they want to turn their city into a giant gated community and have-nots be dammed. Then we can have an open and earnest dialogue about it. Of course, the greatest irony is that many of these cities are heavily progressive so they won't acknowledge the hypocrisy. Instead they'll hide behind environmental regulations o…

> They just need to admit Why do they "need" to do anything? > they won't acknowledge the hypocrisy While I'm perfectly happy to criticize "progressive communities", there's nothing hypocritical about not wanting to live in a London with 25M people.

> While I'm perfectly happy to criticize "progressive communities", there's nothing hypocritical about not wanting to live in a London with 25M people.

Yes, there is. If you live in London now it's probably because you or someone in your family benefited from a system that now excludes anyone not already in it. We ditched the landed gentry a few hundred years ago, I'm not super excited about bringing them back.

Re: Canada bans foreign home buyers for two years

#987

Post by BizarroLand »

imtringued wrote: post #807
BizarroLand wrote: post #451

Earlier quoted context omitted.

And then the people who profited in the interim buy up all of the cheap surplus, sit on it for a few years and then trickle it back out as the prices return to normal, making massive returns on their investment, profiting off of the misery they created in the first place. And you can't even be mad at them for it because there's no collusion, no intent to manufacture the disaster, no single person responsible for it a…

Well, if only there was a way to let the market say that there is too much financial capital and tell lenders to go away. It's actually quite stupid. As you said, no single person is responsible. You have this gold standard thing. The reason why it doesn't work is that gold or money is the financial equivalent of real estate. You don't need money in itself for anything. You need money to trade your labor in for produ…

If I were king of the country, I would institute a federal property tax on single-family homes that is equal to the state property tax times the number of homes that you own for as long as homelessness is over 0.05%. Right now, we're at 0.2%, so homelessness would need to be reduced 75% in order to obviate the tax.

Further, if a non-human, non-bank entity was listed as the owner of the home there would be an automatic additional federal 2x state property tax fee on the property as well. These tax payments would further not qualify to reduce the taxes owed on your other incomes.

Banks and other such lending agencies would only be subject to the property tax penalty if they did not list the home for sale at fair market value within 60 days of acquiring the deed and they would be required to accept an offer that met the fair market value requirement. (i.e., if they only got bids for $50k under fair market value, then they wouldn't be required to accept those bids).

The monies generated would be used to fund anti-homelessness measures across the country. This would make it unbearably onerous to own more than 2 homes for all but the richest Americans, and it would make it so that people who are using real estate ownership as an income producing machine would lose out on that income.

This decree would be set to roll out over a 4 year period to give the mom and pop airbnbers and other non-financially entrenched in the real estate market companies time to liquidate their equity in the housing market. Those companies that are fully dependent on rental income from single-family homes would have no motivation to purchase the newer homes on the market as each additional home would add a federal 1X multiplier to their tax burden, housing would decrease in value, more people would be able to buy in, apartments and multi-family homes would become more readily available and the prices would decrease, more people would be able to afford to rent an apartment, and fewer people would be homeless.

That's a win all around except for any company that fills its pockets by sleeping on its horde of unused homes like ancient dragons and ill-gotten gold.

Re: Canada bans foreign home buyers for two years

#988

Post by anamax »

ng12 wrote: post #986
anamax wrote: post #979

Earlier quoted context omitted.

> They just need to admit Why do they "need" to do anything? > they won't acknowledge the hypocrisy While I'm perfectly happy to criticize "progressive communities", there's nothing hypocritical about not wanting to live in a London with 25M people.

> While I'm perfectly happy to criticize "progressive communities", there's nothing hypocritical about not wanting to live in a London with 25M people. Yes, there is. If you live in London now it's probably because you or someone in your family benefited from a system that now excludes anyone not already in it. We ditched the landed gentry a few hundred years ago, I'm not super excited about bringing them back.

Wanting to be landed gentry is not hypocrisy. ("want to be landed gentry" is your interpretation, but I'll stipulate it for the purposes of this response.)

Note that a significant fraction, probably even a majority, of the 10M prospective Londoners would much rather live in today's "only 14M London" than the "25M London" that you think should happen.

Are these prospective Londoners wanna-be landed gentry hypocrites?

Re: Canada bans foreign home buyers for two years

#989

Post by chx »

Fire-Dragon-DoL wrote: post #389
chx wrote: post #117

Earlier quoted context omitted.

In Vancouver, the problem is rampant NIMBYism. We have single family homes in ton of places where there should be low rises but zoning doesn't allow for it. Indeed, the solution would be to take away zoning power from the city into provincial or even federal hands and let housing be more dense where the taxpayers already paid for rapid transit. Look: https://en.wikipedia.org/wiki/Edmonds_station_(SkyTrain) this is no…

The city plan removed all the zones for single family homes

https://mountainmath.ca/zoning_map look at all the yellow.

We need them to be orange in a block or two radius around all Canada Line and SkyTrain stops. There's a smattering of that but not much.

Re: Canada bans foreign home buyers for two years

#990

Post by alar44 »

freeone3000 wrote: post #948
alar44 wrote: post #934

Earlier quoted context omitted.

No, most people do not live within a market that has these problems. Yes, something like 80% live in a metro area, but this isn't applicable to all metro areas. In the US, maybe the top 5ish cities. Even Chicago, for example, has tons of undeveloped, or underdeveloped land. It's not even close to Toronto or NYC. For most people, moving a little farther from work is what they need. A Chicago suburb commute isn't even…

Moving farther from work and increasing sprawl and traffic is its own problem.

Fair, but packing more people into a small space is only going to drive up land and rent value. Not everyone can live in Manhattan or downtown Chicago.
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