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Canada bans most foreigners from buying homes

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Re: Canada bans most foreigners from buying homes

#71

Post by asdff »

ls15 wrote: post #2

This seems like a good idea and it carves out exceptions for foreigners who are residents. I presume this puts pressure on other countries to do the same, since investors are looking for other opportunities.

Such opportunities for investors only exist if the government artificially strangles the housing supply as many local western governments have done over the past century. If a nation wanted to effectively end such investment into the housing stock, then lawmakers should devalue this asset by allowing production of an excess by updating restrictive zoning codes, not ban foreign investment which could very well bring in benefits in some cases.

Re: Canada bans most foreigners from buying homes

#72

Post by asdff »

cainxinth wrote: post #20
kennend3 wrote: post #16

Earlier quoted context omitted.

Well, there are fines for helping bypass the laws. "The Act has a $10,000 fine for any non-Canadian or anyone who knowingly assists a non-Canadian and is convicted of violating the Act. If a court finds that a non-Canadian has done this, they may order the sale of the house." I would assume opening a numbered corp to own the house would fall under this category? Most of the "super-rich" owned houses in Canada are alr…

Seems like that will just drive the foreign super rich to ‘buy’ citizenships too. With enough money and in-country fixers/ lobbyists, that’s usually not unobtainable in most countries.

I wonder if you'd eventually get a weird marriage for citizenship market from such legislation. Like say you are a modern millennial couple and both you and your partner don't care about the institution of marriage. Are you going to leave money on the table, or get a huge lump sum for both you and your partner to be legally married to some investors that you might never need to meet in person?

Re: Canada bans most foreigners from buying homes

#73

Post by loeg »

standardUser wrote: post #45
hestefisk wrote: post #11

Good symbolic act, but as the fine article states, it’s unlikely to have material effect on housing affordability for the average person until supply is increased.

Just because a policy does not solve a problem outright does not make it symbolic. The article discusses other measures that have already been implemented and points out that current housing prices are way off their peak from a year ago. If this policy further reduces demand even a little, that will have an impact on the trajectory of housing prices. That's not symbolism.

It doesn't move the needle. It's symbolic.

Re: Canada bans most foreigners from buying homes

#74

Post by bparsons »

JacobThreeThree wrote: post #58
tomohawk wrote: post #19

Earlier quoted context omitted.

Exactly. This is only attracting foreign interest due to th artificially constrained supply. If they were serious about the issue, they would increase supply.

Imagine if the government of Canada used just 1% of the 89% of crown land it owns out of all the land in Canada to give to people for housing.

Crown land is controlled by the provinces. The feds only control national parks, military bases and areas covered under Indigenous title.

The provinces hand over crown land to municipalities for development all the time.

Land isn't the problem. The lack of density within desired metropolitan areas is the problem.

Re: Canada bans most foreigners from buying homes

#76

Post by db48x »

BurningFrog wrote: post #75

One good rule of thumb is that whenever people are blaming foreigners for their problems, they're wrong. Investment in housing and price increases are related. But it's the price increases that cause the investments, not the other way around.

Luckily you can depress prices really quickly by forbidding sales of property :)

Re: Canada bans most foreigners from buying homes

#78

Post by angry_octet »

gruez wrote: post #56
kennend3 wrote: post #16

Earlier quoted context omitted.

Well, there are fines for helping bypass the laws. "The Act has a $10,000 fine for any non-Canadian or anyone who knowingly assists a non-Canadian and is convicted of violating the Act. If a court finds that a non-Canadian has done this, they may order the sale of the house." I would assume opening a numbered corp to own the house would fall under this category? Most of the "super-rich" owned houses in Canada are alr…

Only a $10k fine? On a 1 million dollar house that works out to 1%, and your house doesn't even get seized, it only gets sold so you keep all the appreciation that occurred during that time. Considering that transaction fees (eg. for the agent) are probably more than 1%, this doesn't seem like a huge impediment.

... and you don't legally own the property. The original owner can just return your money and move back in. People can squat on your property and you have no legal right to evict them. You've just created a legal nightmare.

Re: Canada bans most foreigners from buying homes

#79

Post by asdff »

blitzar wrote: post #8
MarkusWandel wrote: post #3

So if you're the stereotypical rich foreigner who wants to invest in real estate here, what's the stop them from incorporating a company locally, and then having that own the house(s)? And that's just one workaround I can think of in the first 30 seconds. As with all well-intentioned simplistic schemes, this will hurt normal folks - immigrants who don't have their paperwork sorted out yet - and do absolutely nothing…

> and do absolutely nothing to the big $$ driving home prices up Are the price rises because 1 person bought a penthouse for $100mil or because a million 'normal' people outbid each other for the 100k house in the suburbs?

Prices rise because a certain proportion of workers are high income workers, and when you limit supply such that a region can't fit all its workers, that's who wins the bidding war for the house or who happily overpays for that ratty apartment and this process raises all boats over time. There's no backstop either; people on the low end of the economy end up paying more and more of their disposable income until they have to start putting bunks in bedrooms and living rooms to pay the rent on their wages. Only middle class people can afford to move to a lower cost of living area since moving as high upfront costs with sometimes no prospects of a job at the other end so you need a savings to float for some time.

Re: Canada bans most foreigners from buying homes

#80

Post by michaelt »

charcircuit wrote: post #42
AbrahamParangi wrote: post #22

Of all the things that a person can own, land seems the least justified to me. There is a finite amount of it, you did not create it, you cannot destroy it, and essentially all ownership derives from conquest, in recent or ancient history.

Everything physical you can buy is made up of things that are of a finite amount and were not created by humans. All ownership works like that.

When I buy a wooden table it's true that the tree grew from the ground - but I'm also paying for the efforts of the foresters, the sawmill workers, the truck drivers, the table designers, the machine operators, the assemblers, the store salespeople, and the delivery drivers.

I buy a plot of land, on the other hand? The lazy sellers won't even deliver it to my home :)

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