Canada bans most foreigners from buying homes • Hacker News Board

Re: Canada bans most foreigners from buying homes

#251

Post by TedShiller » Tue, Jan 03, 2023, 12:44 AM UTC

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:…

It’s only simple if you don’t care about crime, pollution, etc. Then, it’s very simple yes.

Re: Canada bans most foreigners from buying homes

#252

Post by themagician » Tue, Jan 03, 2023, 12:44 AM UTC

bamboozled wrote: post #241

themagician wrote: post #237

Earlier quoted context omitted.

There are a lot of answers, but they all stem from one core answer: Because governments do not want to fix it, because those with wealth (largely) do not see it as a problem. Three generations of people (silent, boomers, and gen x) were told that real estate was the best investment they could make for their ENTIRE LIFE. Millennials also heard this growing up. In the US we even took extra steps to make sure that homeo…

Except we know they can't and won't go up forever in those countries as they mostly have a declining birth rate, a long with many other countries. So going to be a fun crash?

That can, and will, be pushed out for generations. It's a declining birth RATE—there are still more people. Plenty more people. And we will continue to limit the number of homes. If we need to, we will shrink the number of homes available.

Home values must go up. They will go up. You should bet on them going up. Because if, for some reason that were to reverse global finance implodes and nothing else really matters.

A permanent, long term downward trend in home values may as well be the end of "money" as we know it all together. And it sort of would be, literally, since much of money creation these days is via mortgage loans.

Re: Canada bans most foreigners from buying homes

#253

Post by kelnos » Tue, Jan 03, 2023, 12:45 AM UTC

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.

I doubt housing was such a hot-button issue in the past. I expect it's mostly financial: for most homeowners, their home is by far their highest-value asset, dwarfing any other savings they might have. As home prices have gone up, the effect of this has increased, and homeowners have become more and more fervent (politically) about protecting the value of their homes.

Any government proposal to increase the housing supply directly threatens this. These days, government officials who talk about doing things that decrease existing homeowners' property value get voted out, immediately.

It's incredibly short-sighted, but people vote against their long-term interests all the time.

I just bought a condo three years ago, and while it wouldn't feel good if its value decreased below the purchase price, I would gladly "pay" in that way for a more livable city, and more housing is key to that. I expect in the long run, making the city a nicer place to live would be better for my home's value anyway. But people won't care about their higher home value in 15 years if it drops for the first 3-5.

Re: Canada bans most foreigners from buying homes

#254

Post by revolvingocelot » Tue, Jan 03, 2023, 12:46 AM UTC

smnrchrds wrote: post #228

revolvingocelot wrote: post #198

Earlier quoted context omitted.

"Unenforced"? No, no -- the $10,000 fine will be collected. It's just the forced sale that might not occur if the superior courts are busy (and they are!), and if it does occur, the foreign nearly-buyer will be out $10,000. There's no need to encourage baseless Reddit speculation, just read the law itself -- I've linked it, you've linked it -- and reason about how the government will act based on the last 30 years of…

Again, I don't agree with your cynicism. But even if you are cynical, consider this: if the government appears soft on real estate prices, they will lose the next election (which may be as early as this spring) to Pierre Poilievre.

...that's a really good point, actually. I am in fact so cynical that in light of this point, I think I'm going to go around loudly praising this bold new law from the wise Liberals.

Re: Canada bans most foreigners from buying homes

#255

Post by fps » Tue, Jan 03, 2023, 12:47 AM UTC

BurningFrog wrote: post #179

db48x wrote: post #119

Earlier quoted context omitted.

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

I'm claiming the fundamental underlying demand is for actual housing . Canadian cities are not allowing enough housing to be built for their increasing population, which leads to a price spiral, which in turn attracts savvy investors. Who ultimately owns the properties does not really enter into the price equation. I know the stories of how foreigners are so greedy that they buy houses but decide to forego the income…

You may not believe it, but the situation is very well documented and certainly a thing that is removing housing stock from cities around the world.

Housing has a value as an investment, and leaving the housing unoccupied reduces the cost to maintain the investment. Tenants have a lot of protections in many jurisdictions, and an owner is responsible for maintenance, depreciation and damages, while a tenant cannot be evicted by the landlord who wants to sell a unit without a substantial waiting period, if at all.

https://bostonagentmagazine.com/2018/09/11/study-bostons-new...

https://nypost.com/2021/08/05/nearly-half-of-luxury-units-em...

https://www.nytimes.com/2017/07/21/upshot/when-the-empty-apa...

Re: Canada bans most foreigners from buying homes

#256

Post by skfingngihg » Tue, Jan 03, 2023, 12:48 AM UTC

seattle_spring wrote: post #223

plantain wrote: post #154

Earlier quoted context omitted.

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

A full half of the voting base, or more, fervently vote against their own best interest. Seems like it’s happening in Europe and has taken deep roots in places like Brazil, too. People can’t really be surprised that bad things are happening when they explicitly vote for bad things to happen.

I think a lot of it is other people voting against my interests. How many homes in Detroit have democrats demolished in anti-gentrification violence?

Re: Canada bans most foreigners from buying homes

#257

Post by kasey_junk » Tue, Jan 03, 2023, 12:48 AM UTC

CPLX wrote: post #249

stoppingin wrote: post #215

Earlier quoted context omitted.

This idea is pure fantasy. This condition of classifying people as NIMBYs if they disagree with you on this topic is incredibly toxic. There are a plethora of totally valid reasons why people would be opposed to endless urban sprawl, consolidation, and population growth.

How does someone oppose population growth? That’s a literal question. What public policy do you endorse that has the ability to significantly reduce the number of people being born? If you don’t have one you’re just opposed to building enough houses for the people we have.

Increasing the level of education for women. Increasing the access to pre-natal care for women. Decreasing the poverty level generally and specifically for young families. Moving more people out of agricultural work.

Those things are highly correlated with lowered birth rates, though I suspect the last one is probably not applicable to the US.

Re: Canada bans most foreigners from buying homes

#258

Post by ironman1478 » Tue, Jan 03, 2023, 12:50 AM UTC

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:…

Why would you do something when you can do nothing and get elected and paid? It's cynical but that's it. There is no punishment for poor performance, so why would people try?

Re: Canada bans most foreigners from buying homes

#259

Post by kelnos » Tue, Jan 03, 2023, 12:51 AM UTC

Will this actually do anything, though? The Vancouver and Toronto metro areas implemented foreign investor taxes on home purchases a bunch of years ago. I believe the data shows that the taxes did dramatically reduce foreign real estate investment, but it wasn't clear that it did much to make home prices more affordable for citizens. Granted, it's possible that foreign investment would have made the situation worse. But it seems like it's a lever that didn't really do much to move the needle.

The only real solution is to build more and more housing in places where people want to live, increasing density where necessary. I know a lot of people don't like this for a variety of reasons, but: tough shit. Buying a house doesn't give you the right to stop time. Yes, increased density does bring some negatives, but I don't see a world where those negatives are worse than the effects of skyrocketing housing prices.

Re: Canada bans most foreigners from buying homes

#260

Post by kelnos » Tue, Jan 03, 2023, 12:55 AM UTC

HWR_14 wrote: post #225

rippercushions wrote: post #98

Earlier quoted context omitted.

> "The ban doesn't apply to properties with 4 units or more" - good. If the goal is to allow single family homes and duplexes, condos, etc. to drop in price, it's providing aid in the right place. The goal wasn't to make life easier for people buying investment properties. This seems like a massive gap though, and the counterargument doesn't make sense. Surely high-density housing is (should be) cheaper than the alte…

Someone who buys a single family home is depriving a family of the ability to own a home. A 4+ unit complex is unlikely to fall into the same situation. Those are often rented out. You're right that it might prevent owned condos from forming instead of apartments, but the only thing that gap allows is the sale of an entire complex, and the only thing it prevents is conversion of new apartment buildings to condos. Onc…

I think there's more to it, though. If landlords or management companies are competing to buy a 4+ unit building, that having more potential buyers (foreign buyers) will tend to make the final purchase price higher than it would have been if there'd only been local buyers, regardless of who ends up with the winning bid.

And certainly the higher cost of purchase will influence the amount the new owner charges tenants to live there.