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Canada bans most foreigners from buying homes

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Re: Canada bans most foreigners from buying homes

#441

Post by arcticbull »

JumpCrisscross wrote: post #267
kasey_junk wrote: post #257

Earlier quoted context omitted.

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.

> I suspect the last one is probably not applicable to the US None of them are applicable to America [1]. [1] https://www.census.gov/content/dam/Census/library/publicatio...

The birth rate in the US is 1.64 children per woman. It’s already a significantly shrinking population, replacement rate is around 2.1 children per woman. The US only maintains its population through immigration.

How much lower do you want it to be?

Re: Canada bans most foreigners from buying homes

#442

Post by alvah »

rcarr wrote: post #354
themagician wrote: post #252

Earlier quoted context omitted.

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.…

This, unfortunately, is correct. The birth rate means jack shit. People with the capital to do so will just buy multiple homes. Holiday homes, homes closer to work, rental properties etc. If the crash ever came it would be so bad it would make the Great Depression look like a picnic. This is why governments will go to ludicrous measures such as bailing out the banks during the financial crisis and then pumping the ma…

Ultra-high tax rates during WWII, when governments used tax to raise the money they needed, may have made sense. Ultra-high tax rates in an unbacked fiat currency world are purely an attempt to punish the ultra-rich (which ends up punishing the upper-middle class as the ultra-rich can afford to either package their income or escape to a lower-tax jurisdiction). In an unbacked fiat currency world, income tax rates are used to heat & cool the economy, not really as a fundraising tool for government works.

Re: Canada bans most foreigners from buying homes

#443

Post by freshpots »

loeg wrote: post #419
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.

Rent first. Also, understand immigration in the respective country that they are immigrating to.

Re: Canada bans most foreigners from buying homes

#444

Post by philliphaydon »

scarface74 wrote: post #440
philliphaydon wrote: post #429

Earlier quoted context omitted.

Do you think if income grew at the same pace as house prices, those paying $80-135/week would be able to afford a house and mortgage on a smaller home?

Do you think everyone in your perfect world would be able to or should buy a home no matter what their circumstances? Including the recently divorced single guy who found odd jobs, the ex convict trying to get his life together, etc? The guy with the cheapest room was paying less than $4200 a year all utilities included. Did I do him a disservice? Are you saying that renters shouldn’t exists or do you think no one sh…

Providing a service doesn’t change that you’re contributing to a problem. You really sound like you don’t want people to own homes. You would rather houses be expensive so you can provide a service to more than to a few or to people who don’t want to own a home etc.

Re: Canada bans most foreigners from buying homes

#445

Post by JumpCrisscross »

stoppingin wrote: post #400
JumpCrisscross wrote: post #353

Earlier quoted context omitted.

> a very arbitrary definition of NIMBY NIMBY means not in my backyard. As in, I want the benefits of a thing but not its cost. Wanting affordable housing while denying development is NIMBY. Saying no development because you want higher property prices is not NIMBY, it's prohibitionism. (Depending on the environment, it could be reasonable and/or heartless.) > been told by people who would know that one of Sydney's bi…

> This is prudent pipeline management... Doesn't this contradict your central thesis? If the supply of housing doesn't exceed the demand, the price isn't going to drop. How can urban consolidation actually benefit the renter class if property developers are able to artificially increase the value by restricting supply until mechanisms like immigration cause demand to catch up?

> Doesn't this contradict your central thesis?

No. In development-constrained world, particularly one with long approval timelines, you need to make money on margin. In a less-constrained world, you can bring to force economies of scale and make money in volume.

The thesis is: if you have an anti-development environment, developers will maximise margins. This isn’t a conspiracy and it isn’t artificially increasing value. It’s survival. If ten houses will get built but there is demand for twenty, and everyone pays the same for labour and materials and lobbyists, all those houses will be as high end as the market will bear. You’re competing in getting the right to build; the market is inelastic. If anyone can build twenty or thirty houses without years of approvals, you’re going to prioritise your costs, because there is a chance you don’t sell every single house. You’re competing on price and value; the market is elastic. (You also get a learning curve.)

This is why Sydney has price inelasticity for detached housing. The scarcity is a policy choice.

Re: Canada bans most foreigners from buying homes

#446

Post by voisin »

neighbor1 wrote: post #409
voisin wrote: post #86

Earlier quoted context omitted.

I 100% concur. Canada would benefit by having a population 2-3x current. I am always amazed how in the US there are so many cities with vibrant cultures in the 50-80k range whereas in Canada you can drive vast distances and only find tiny settlements of a few thousand people and no services or culture to speak of.

> Canada would benefit by having a population 2-3x current What a coincidence, this is exactly what the Century Initiative wants. Toronto would go from 8.8 to 33.5 million people. Vancouver from 3.3 to 11.9 million. https://en.wikipedia.org/wiki/Century_Initiative

Well… I would distribute it differently! I’d look for dozens of more cities in the 75-300k range like the US rather than pushing the growth to 2-3 mega cities.

Re: Canada bans most foreigners from buying homes

#447

Post by jackcosgrove »

Negitivefrags wrote: post #219
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:…

There seems to be a general lack of political will for big projects in the west. Looking at Asia now is like what the west used to be like. I am unsure about the cause but I suspect that a lot of it is that people seem a lot more worried about consultation with locals and such. In the past the government might just decide “we are building a highway here” or “we are building all this infrastructure for houses there” a…

While I don't think it was due to foresight as compared to, say, nimbyism, those parts of the world that are putting the brakes on development may be making the right choice. World population will peak later this century, and it has already peaked locally in many places. Some infrastructure will become a white elephant going forward once the population it was built for declines.

I feel bad for those who are stuck without adequate or inexpensive housing in the meantime, but in the aggregate it may be wise to not overbuild now.

The problem in a place like the US is mostly the distribution of jobs. There are places with abundant housing that also lack for jobs.

Re: Canada bans most foreigners from buying homes

#448

Post by JamisonM »

petermcneeley wrote: post #117
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.

Lets try to avoid the sophistry. I dont think the native Americans were wrong to consider the influx of European settlers as being a threat to their existence. Also like "But it's the price increases that cause the investments, not the other way around." is completely nonsensical. Investment is about the expectation of the future price. If something has increased in price it might indicate that it will decrease in pr…

The expectation of the future price of housing for foreign investors is entirely about believing that future construction will be restricted. If investors, foreign or otherwise, believed that housing was a market that responded to market forces in a timely manner they would not invest. It is therefore reasonable to assume that the foreign investors:

1. Believe that their domestic real estate market is overpriced or will respond very quickly to market pressures that will make any investment undervalued. 2. Believe there is non-market benefits to owning foreign real estate that compensate for any additional risk associated with investing overseas.

I believe that both of these factors are at play, Canadian real estate rules make markets dysfunctional so property values tend to increase disproportionally compared to what they should. But it is also the case that a upper-middle class Chinese person looking to secure assets outside the purview of the authoritarian government they are forced to live under will pay a premium.

Ideally what we all want is a situation where the Canadian market is very dynamic and investments provide a reasonable return but any foreign investors that are investing for non-market benefit reasons are compelled to put their properties into the market for rental at market rate for economic reasons but still get to enjoy the bit of freedom that foreign investment affords them.

Re: Canada bans most foreigners from buying homes

#449

Post by josephcsible »

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…

> most countries in Asia you literally cannot buy property if you're a foreigner.

This makes me wish we had a reciprocity rule. E.g., "A foreigner can only buy a house in America if Americans can buy houses in the foreigner's home country".

Re: Canada bans most foreigners from buying homes

#450

Post by alvah »

fatbird wrote: post #185
mavelikara wrote: post #174

Earlier quoted context omitted.

I was asking about the rich people in his county, who don't currently live in the mountain town.

In Canada, the vast majority of rich foreigners buying property are American. Chinese investors, the favourite villain of the "rich foreigners" class, make up only about 4% of foreign real estate investment.

4% seems unlikely. This article is a few years old & mainly discusses Vancouver and Toronto, but in 2015, Chinese buyers made up around 1/3 of the Vancouver market: https://www.fortunebuilders.com/one-third-of-vancouvers-real...
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