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Canada bans most foreigners from buying homes

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Re: Canada bans most foreigners from buying homes

#411

Post by mytailorisrich »

QIYGT wrote: post #332
philliphaydon wrote: post #261

Earlier quoted context omitted.

Because today houses are not for living in. They are investments. There's multiple issues that need solving now. 1) Being able to purchase a house without ever setting foot in the country. NZ decided to stop foreigners buying houses. There were websites you can go in and people from China would buy houses without ever setting foot in NZ... The buying power of alot of people from China and India is huge. This drives u…

> Because today houses are not for living in. They are investments. The only reason homes can be considered investments is that governments limit supply so much that prices are forced to increase.

Homes can be considered investments because people's incomes have historically increased faster than inflation.

Re: Canada bans most foreigners from buying homes

#412

Post by QIYGT »

cycomanic wrote: post #402
QIYGT wrote: post #332

Earlier quoted context omitted.

> Because today houses are not for living in. They are investments. The only reason homes can be considered investments is that governments limit supply so much that prices are forced to increase.

If it is just a matter of supply and demand, how come that increase in house prices have outpaced population growth by huge margins in many places? I mean look at places like, e.g. Germany which has a pretty stable population (it would be contracting if it wasn't for immigration), but house prices increased significantly over the last 10 years, pretty much throughout most of the country.

I don't know details about Germany, but you can't just look at national population trends. In the US for example, the problem is made worse by a trend of people moving from rural areas into cities.

And re the "huge margins" the relationship between supply and demand isn't linear. If you have 10% more households than homes, bidding wars will drive prices up way more than 10%.

Re: Canada bans most foreigners from buying homes

#413

Post by Spooky23 »

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:…

Because values have to climb in order to keep the real estate shell game going. Buildings depreciate, so increasing demand is the way to make magical money. The old technique, redlining, is illegal.

Commercial real estate is architected around tax avoidance strategies. 1031 exchanges, depreciation rules, etc. In many cases, it’s literally possible to build a commercial development with zero out of pocket. Residential is all about building asset value through mortgages.

Key markets like California are distorted to be even worse because the property tax laws encourage holding and not improving property. Unless there’s a constitutional convention or ballot, you’ll have homes worth $100M in 2080 paying property taxes based on a $100k valuation in 1980.

Re: Canada bans most foreigners from buying homes

#414

Post by Tiktaalik »

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.

The reason that the government started moving on foreign investment in BC initially back with the taxes in 2015 was that it was so dominant that it was changing the types of housing that was being built.

Companies such as Westbank were making projects like Oakridge, Alberni, Butterfly, Canada House with condo units specifically designed as pied-a-terres, marketed with storefront showrooms in major cities across Asia.

Even setting aside the whole issue of prices, when the actual product being made, the thing that is drawing huge amounts of local labour for years, is not designed with the needs of locals in mind (ie. tiny hotel-like pied-a-terre) that is a huge long term problem.

As soon as the tax was brought in pretty much overnight Westbank dumped this business model and started building purpose built rental for a local renter market. As things should be.

Re: Canada bans most foreigners from buying homes

#415

Post by dang »

philliphaydon wrote: post #324
BenFranklin100 wrote: post #303

Earlier quoted context omitted.

The reasons we don’t have enough homes is because governments have made it illegal to build enough new homes to meet demand. You are essentially say that the presence of car collectors leads to car shortages.

> The reasons we don’t have enough homes is because governments have made it illegal to build enough new homes to meet demand. > You are essentially say that the presence of car collectors leads to car shortages. The price of a old car, a new car, a cheap car, and an expensive luxuary car, all vary greatly. Cars are more or less open for purchase by everyone. Houses a fixed in a location, you cannot pick it up and mo…

Please don't respond to a bad comment by breaking the site guidelines yourself. That only makes everything worse.

https://news.ycombinator.com/newsguidelines.html

Re: Canada bans most foreigners from buying homes

#416

Post by dang »

BenFranklin100 wrote: post #303
philliphaydon wrote: post #261

Earlier quoted context omitted.

Because today houses are not for living in. They are investments. There's multiple issues that need solving now. 1) Being able to purchase a house without ever setting foot in the country. NZ decided to stop foreigners buying houses. There were websites you can go in and people from China would buy houses without ever setting foot in NZ... The buying power of alot of people from China and India is huge. This drives u…

The reasons we don’t have enough homes is because governments have made it illegal to build enough new homes to meet demand. You are essentially say that the presence of car collectors leads to car shortages.

Please eliminate swipes and/or name-calling from your HN posts. This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html.

Your comment would be ok without that first bit.

Re: Canada bans most foreigners from buying homes

#417

Post by scarface74 »

philliphaydon wrote: post #398
scarface74 wrote: post #345

Earlier quoted context omitted.

> It's built for sale, not built for rental. Why is there such an emphasis on ownership ? Yes I’ve owned five properties - two to live in permanently, one to live in half the year (the other half we travel), and two investment properties. The tenants I had in my rental properties were in no position to buy a home or for that matter to rent a whole house. I rented by the room. I actively discourage young people from b…

You kinda prove my point, you rent out a room, you can afford a high mortgage repayment and combined income from your rentals covers mortgage payments. Preventing anyone from ever owning a home. Mortgage payments should be less than rental payments. Also not EVERYONE will be able to afford homes. But when the middle class are priced out of owning a home, as is the issue, thats a problem. Edit: you also seem to ignore…

So, I prevented someone from owning a home that could only barely afford $80-$135/week with all utilities included?

Isn’t that the ultimate “let them eat cake”?

The alternative would be for the eight people to be homeless?

Are all of the people buying property and focusing on student housing also keeping people from buying houses? Were the college students with no income who were only going to be in town for four years and living off of student loans also going to buy houses? Should they have also been forced to buy homes or be homeless?

> So thank you for contributing to the housing issue that causes young people to not be able to afford a home

I assure you those eight people (two houses) were happy to be able to afford to have a roof over their head.

Do you suggest no one be allowed to be renters and everyone buy a home?

Re: Canada bans most foreigners from buying homes

#418

Post by kypro »

philliphaydon wrote: post #261
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:…

Because today houses are not for living in. They are investments. There's multiple issues that need solving now. 1) Being able to purchase a house without ever setting foot in the country. NZ decided to stop foreigners buying houses. There were websites you can go in and people from China would buy houses without ever setting foot in NZ... The buying power of alot of people from China and India is huge. This drives u…

Houses are only good investments if you can rent them for a price that will yield an attractive return.

People will only rent a house for a price that they're willing to pay therefore this isn't a bubble as you imply (people are only buying because prices go up), so presumably it's a supply / demand issue.

It's extremely easy to say "reee, why don't the government build more homes!!", but where exactly do you build more homes in central London?

Oh no, sorry, you meant build more homes where there's free land? Sure, but people don't want to live there.

The issue is actually far more to do with urbanisation than anything. For example here in the UK there are plenty of places that are extremely affordable to live, the issue is that they're in rural and generally undesirable areas so no one wants to live there. When people say house prices are too high, what they actually mean is that they can't afford a house in London or some other attractive city they want to live. It's not that an average wage wouldn't get you a decent house in say Middlesbrough where the average property price is ~£150k - it's that an average wage won't get you a decent house in a nice city location. A first time buyer could easily get a two bed house in Middlesbrough for around £100k.

In my opinion the solution is counter intuitively to stop building more houses in cities. The more you build in cities the more jobs and more people relocate there. And that feeds on itself because then more people want to live there because that's where all the action is.

If instead we invested in places like Middlesbrough and offered employees incentives to relocate we could distribute the demand for housing away from over populated cities.

We could also couple this with investment in public transportation and incentivise remote working which would allow people to comfortably live further out of city centres.

Though, I suspect this is understood fairly well by governments. I think they actually see urbanisation as a good thing because it's more efficient for business to have a pool of labour and consumers concentrated in a small geographic area. The only real cost is congestion and house prices, but that's a cost to humans, not businesses.

Re: Canada bans most foreigners from buying homes

#419

Post by loeg »

yumraj wrote: post #404

I'm genuinely curious, as to why a country, any country, should not limit home purchase to residents (note I'm saying residents and not citizens). What benefit does it provide to a country or its residents if home purchase is opened to foreign residents?

How does someone become a resident if they can’t buy a place to live? This is a chicken and egg problem that is similar to banning foreign purchases entirely.

Re: Canada bans most foreigners from buying homes

#420

Post by lazide »

QIYGT wrote: post #332
philliphaydon wrote: post #261

Earlier quoted context omitted.

Because today houses are not for living in. They are investments. There's multiple issues that need solving now. 1) Being able to purchase a house without ever setting foot in the country. NZ decided to stop foreigners buying houses. There were websites you can go in and people from China would buy houses without ever setting foot in NZ... The buying power of alot of people from China and India is huge. This drives u…

> Because today houses are not for living in. They are investments. The only reason homes can be considered investments is that governments limit supply so much that prices are forced to increase.

Nah, gov’t can also print more cheap money, like they did for the prior decade.
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