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Canada bans most foreigners from buying homes

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Re: Canada bans most foreigners from buying homes

#161

Post by JumpCrisscross »

PragmaticPulp wrote: post #118
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.

> 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…

> barely saw anyone else come and go from the building the entire week I was there

Then charge a vacancy tax.

If nobody is doing the following in a week, I am: set up Canadian entities, pay Canadians to manage it, buy houses and raise offshore capital with variable-rate notes tied to some index that's basically the value of the underlying homes.

Re: Canada bans most foreigners from buying homes

#162

Post by itsthejb »

PragmaticPulp wrote: post #118
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.

> 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…

Interesting side-point: I live in a rental only high rise development in London. When I moved in it was about half full. During the year it’s been almost completely rented out, and this is pretty obvious from the rapid increase of people in the common areas

My point: if it wasn’t rental only, I really wonder how many neighbours I’d have in a development like this, which seems like it would be a prime target for shoebox buyers around the upper-middle of the market

Re: Canada bans most foreigners from buying homes

#163

Post by arcticbull »

plantain wrote: post #154
pxue wrote: post #147

Earlier quoted context omitted.

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

What changed? Governments used to aggressively intervene in the housing market.

My hypothesis has been that renters stopped voting. They tend to be transient, younger, non-voters while landowners tend to be older, rooted and vote fervently. Density hurts landowners by decreasing property values and landowners vote.

Re: Canada bans most foreigners from buying homes

#164

Post by JumpCrisscross »

arcticbull wrote: post #163
plantain wrote: post #154

Earlier quoted context omitted.

What changed? Governments used to aggressively intervene in the housing market.

My hypothesis has been that renters stopped voting. They tend to be transient, younger, non-voters while landowners tend to be older, rooted and vote fervently. Density hurts landowners by decreasing property values and landowners vote.

> renters stopped voting

Renters also got co-opted into being NIMBYs out of fear of gentrification.

Re: Canada bans most foreigners from buying homes

#165

Post by Grimburger »

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…

This a confusing comment, looking at the stats there was more homes built from 2008-2014 than from 2014-2020.

https://tradingeconomics.com/netherlands/building-permits

What you are saying seems more anecdotal than evidential.

Also looking at other sources it says that the wait time for a new build has blown out to 2 years:

> Why has this shortage taken place? There are a couple of reasons. Fewer building permits are being issued, as a result of stricter environmental regulations, which aim to mitigate the nitrogen crisis. Then there is the mere problem of time: from the moment a building permit is issued, it takes about two years for a house to be ready.

https://dutchreview.com/news/housing-shortage-will-continue-...

This sounds entirely like a zoning and supply issue, not a "builders won't build" issue.

Re: Canada bans most foreigners from buying homes

#166

Post by db48x »

orwin wrote: post #141
db48x wrote: post #91

Earlier quoted context omitted.

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 reg…

But D is not true. If a property costs one million today, but could sell for two million in a few years, then simply buying it and holding it will earn you a reasonable rate of return even if you never rent it out. In fact renting it out is risky simply because it will make the property harder to sell when the time comes.

And with a small but significant population of potential buyers excluded, the property prices will not not rise nearly as much and they may even fall. If there are enough rich Canadians in the coming generations then prices may rise again, making the investment worthwhile, but there is significant risk there.

Re: Canada bans most foreigners from buying homes

#167

Post by tomatocracy »

vlovich123 wrote: post #48
sokoloff wrote: post #35

Earlier quoted context omitted.

Housing cannot durably be both a good investment and remain affordable.

It’s a fine investment in a diversified portfolio because traditionally it was a hedge in both capital and monthly cash flow, and decoupled from other asset classes. It also offered freedom where you can make improvements to the land to increase the rate of growth. There were also non-monetary investments because your lifestyle choices had certain kinds of freedoms it offered (in exchange for giving up others) So it’…

Housing is also pretty unique in the range of investment options available to "normal" people in that you can get meaningful leverage without some form of collateral posting/margining requirement or ongoing covenant testing.

Re: Canada bans most foreigners from buying homes

#168

Post by bravo22 »

arcticbull wrote: post #163
plantain wrote: post #154

Earlier quoted context omitted.

What changed? Governments used to aggressively intervene in the housing market.

My hypothesis has been that renters stopped voting. They tend to be transient, younger, non-voters while landowners tend to be older, rooted and vote fervently. Density hurts landowners by decreasing property values and landowners vote.

The younger owners tend to also vote based on social "wedge" issues which means they don't need to be catered to on this issue whereas asset owners tend to vote based on their interests and have to be catered to otherwise they'll vote for the other party.

I believe this also explains the rise of progressive political factions that propose a lot of policies that seem to favour the disenfranchised but in reality benefit the rich and the asset owners. Their policies let the rich and the well off virtue signal without any consequence to their income or wealth. Voting patterns in large cities in Canada, for example in Toronto, supports this.

Re: Canada bans most foreigners from buying homes

#169

Post by [deleted] »

arcticbull wrote: post #163
plantain wrote: post #154

Earlier quoted context omitted.

What changed? Governments used to aggressively intervene in the housing market.

My hypothesis has been that renters stopped voting. They tend to be transient, younger, non-voters while landowners tend to be older, rooted and vote fervently. Density hurts landowners by decreasing property values and landowners vote.

[deleted]

Re: Canada bans most foreigners from buying homes

#170

Post by twobitshifter »

mavelikara wrote: post #153
bamboozled wrote: post #134

Earlier quoted context omitted.

So I live in a small mountain town where we've seen a massive influx of foreign investors driving up the price of housing because they're coming here and paying off locals to find them houses to buy for a private holiday house. There are middle men who do the finding then flip the property for 500% of what they buy the house off a little old lady for, on selling it to a rich person from overseas, who use the house fo…

Why are only foreign rich people, and not local ones, interested in your mountain town? > What annoys m the most about these parasites, is they don't pay tax, they buy a property, use all the local resources I pay for as a tax payer, contribute zero to the local area. Why are they exempt from property taxes?

He said they're priced out. This means interested but without the wealth to outspend foreigners.
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