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Canada bans most foreigners from buying homes

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Re: Canada bans most foreigners from buying homes

#141

Post by orwin »

db48x wrote: post #91
BurningFrog wrote: post #89

Earlier quoted context omitted.

The value of housing comes from how much you can charge people who want to live in them. That number doesn't change because foreigners can't buy.

By definition it will. Fewer potential buyers always means lower top prices. Especially in this case, where the whole point is to prevent rich foreigners from outbidding poor locals.

I don't think you understood what GP meant, so i will try to formulate it in another way:

A: People who want to live in a city need housing and are ready to either 1: pay X/month (rent) or 2: buy the house.

B: This law do not create new unit to be rented or bought, and do not do anything for the cities attractiveness, IE the migratory trend will stay the same

C: The renting price is complex and while location and regulation do have an effect, the price is based on supply and demand, not on "how much did you pay for this house" (unless you have rent limits in canada).

D: The buying price is complex but also half based on the renting price. I think AirBNB jacked things up, and we now see housing as a commodity so the number could be higher, but when i was a kid the common sense was: monthly rent * 12 * 20 > house price: buy, else don't.

If A,B, C and D are all true, then i don't see how this law can change prices. If i'm wrong on any point, it might.

Re: Canada bans most foreigners from buying homes

#142

Post by rs999gti »

dan-robertson wrote: post #133
PragmaticPulp wrote: post #118

Earlier quoted context omitted.

> One good rule of thumb is that whenever people are blaming foreigners for their problems, they're wrong. Another good rule of thumb is to not dismiss issues just because they don't fit an over-generalized idea of how all situations must work. The housing situation in Canada is weird . I visited a friend who lived in a high rise and barely saw anyone else come and go from the building the entire week I was there. Fr…

Stupid question, but how did you tell that they had been purchased by foreign investors?

Some local tax offices make deed owner data public

Re: Canada bans most foreigners from buying homes

#143

Post by pkaye »

breitling wrote: post #113
ravendug wrote: post #24

Earlier quoted context omitted.

It’s nowhere near 1 million per year. The record from 2021 was 405,000 and the plan for the next 3 years is https://www.canada.ca/en/immigration-refugees-citizenship/ne...

That's 405,000 permanent residents only. Add to that hundreds of thousands international students + hundreds of thousands temporary workers + tens of thousands asylum seekers + etc + etc

Based on a Google search, Canada builds 200k homes, condos and other dwellings in a year. Looks like the pace needs to be doubled.

Re: Canada bans most foreigners from buying homes

#144

Post by smnrchrds »

hippich wrote: post #109
smnrchrds wrote: post #51

Earlier quoted context omitted.

It is important to note that according to Canadian law, permanent residents (equivalent to green card holders in the US) are not considered foreign nationals. They enjoy roughly the same rights and privileges as Canadian citizens, with very limited exceptions such as voting, running for office, serving as a jury, and some high-level government positions. > Foreign national: A person who is not a Canadian citizen or a…

I think you can say the same about green card holders in the USA. Or there is some specifics that specifics between treatment of permanent residents in USA vs Canada?

> Or there is some specifics that specifics between treatment of permanent residents in USA vs Canada?

This is not a topic I am super familiar with, but I believe the answer is yes. For example, in Canada, permanent residents have the right to enter the country, similar to Canadian citizens. In other words, they enter the country by right, not at the discretion of CBSA officers. This is not necessarily the case in the US. Trump's travel ban initially prevented green card holders who happened to be outside of the US when it came into force from re-entering. This was loosened later on after protests [1].

Another example is that new immigrants to the US (those who have gotten their green card within the last 5 years) are not eligible to buy Medicare [2] or if low-income, to get Medicaid [3]. Permanent residents of Canada have the same rights and access to public healthcare as Canadian citizens.

In the US, American citizens do not have to carry or present any form of ID, but according to a law that is thankfully rarely enforced, not having your green card on your person at all times is a criminal offence. ("Failing to have your green card with you is a criminal misdemeanor. If you are found guilty you can be fined up to $100 and put in jail for up to 30 days. (I.N.A. Section 264(e), 8 U.S.C. Section 1304.) " [4]). Canada does not have discriminatory laws like this applying only to permanent residents.

So the difference is both in specific laws, and the general attitude in lawmaking. Existing Canadian laws and new legislation tend to give the same rights to permanent residents as Canadian citizens (with some exceptions), but in the US, the legal framework creates a bigger gap between the rights of those two groups.

[1] https://www.reuters.com/article/usa-trump-immigration-idUSL1...

[2] https://www.insubuy.com/medicare-for-new-immigrants-green-ca...

[3] https://www.healthcare.gov/immigrants/lawfully-present-immig...

[4] https://www.nolo.com/legal-encyclopedia/do-i-really-need-car...

Re: Canada bans most foreigners from buying homes

#145

Post by revolvingocelot »

smnrchrds wrote: post #55

If you think this law will be easy to sidestep, please read this post first: https://old.reddit.com/r/canadahousing/comments/zz92li/prohi... It appears that the law is well-designed to avoid such abuses and loopholes. Relevant xkcd: https://xkcd.com/1494/

Well-designed?! For who? From the actual law, at https://laws-lois.justice.gc.ca/eng/acts/P-25.2/page-1.html:

>Offence

>6 (1) Every non-Canadian that contravenes section 4 and every person or entity that counsels, induces, aids or abets or attempts to counsel, induce, aid or abet a non-Canadian to purchase, directly or indirectly, any residential property knowing that the non-Canadian is prohibited under this Act from purchasing the residential property is guilty of an offence and liable on summary conviction to a fine of not more than $10,000.

Emphasis mine. Eh, who cares? 10 grand isn't anything when held up against the average Canadian house price. And, yes, it's 10 grand from each involved party, but that's it. Sure, there's some language later on which allows a province's superior court to order that the house be sold. Be sold. What a punishment! And unless it's some massive televised case, the superior courts don't have time for that.

This should be seen more as the Canadian government getting their cut.

Re: Canada bans most foreigners from buying homes

#146

Post by orwin »

db48x wrote: post #119
BurningFrog wrote: post #100

Earlier quoted context omitted.

No. Owning housing produces a certain income for the owner. Either as the rent you can charge from tenants, or increase in the resale price. Both depend on the local supply/demand situation.

Yes, supply and demand. Excluding buyers reduces demand, and thus reduces prices.

But buyers will just become renters then, changing nothing for the prices.

Re: Canada bans most foreigners from buying homes

#147

Post by pxue »

plantain wrote: post #140

I really don't understand why governments around the globe just throw their hands in the air and pretend housing is an unsolvable problem for which they have no obligation to fix. It wasn't always like this - in 1922 in Australia we realised there was a shortage of 25,000 homes, so they just made it happen [1]. Why are we so impotent today? Do we just not care enough? Are the vested interests too powerful? [1] https:…

Supply is artificially controlled by voters who don't want density to increase, masked behind preservations, environmental concerns or just plain corruption

Re: Canada bans most foreigners from buying homes

#148

Post by betaby »

jq-r wrote: post #125
betaby wrote: post #96

Earlier quoted context omitted.

We don't have 'much habitable land'. Most of the 'land' is literally a rock https://en.wikipedia.org/wiki/Canadian_Shield

Hmm, that does look habitable to me. Moreover, it looks quite nice compared to a lot of places people live in. Mars, Moon, and some places on Earth defnitely are not habitable (unless very supported), but calling most of the Canada "unhabitable" is more than a stretch.

That land is not suitable for agriculture. There is no way to build anything sustainable there, nor there is any point in that.

Re: Canada bans most foreigners from buying homes

#149

Post by rs999gti »

apendleton wrote: post #123
BurningFrog wrote: post #102

Earlier quoted context omitted.

But it won't decrease the number of people competing to live in the units, which is what determines the value of the housing units.

A lot of these properties apparently are bought by wealthy foreigners purely speculatively, and sit vacant. If they were buying them to rent them out, I'd agree with you, but as it is, they end up reducing the housing stock that's available to be lived in while the number of people stays the same, so they do drive up price.

It's well known that wealthy overseas Chinese park their money in Canadian real estate.

Many of the purchases remaining as rentals or unoccupied

Re: Canada bans most foreigners from buying homes

#150

Post by fleddr »

maximilianroos wrote: post #131
fleddr wrote: post #121

I want to give some push-back regarding the often-heard phrase that governments should stop restricting supply. I'll be using the situation in the Netherlands to explore some complexities. These may not apply everywhere, but it serves to illustrate that the situation is far more complex than "stupid zoning". First, the reason the Netherlands is in a similar situation as Canada (400K home prices, very tight supply) is…

I don't know about the Netherlands. But in many US cities — in particular SF & LA: 1) It's extremely difficult to get approval for new housing 2) There's a large backlog of developers attempting to build new housing ...which should convince anyone that regulation is the binding constraint, not a lack of willingness to build.

Fair enough, but I already acknowledged zoning to be a (local) factor. My point was that it doesn't explain unaffordable homes in vast parts of the world.

You've taken the most notorious large city in terms of zoning but that does not represent the entirety of the issue of homes being absurdly expensive across the board. Which is not a SF issue, it's a widespread issue. Zoning doesn't explain the wider issue.

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