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Canada bans most foreigners from buying homes

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Re: Canada bans most foreigners from buying homes

#571

Post by mancerayder »

throwaway_paris wrote: post #517
mancerayder wrote: post #474

Earlier quoted context omitted.

Paris is definitely not a place where you can point to an example of abundant, affordable housing. Are you kidding me? Adjusted for wages, Paris purchase prices are more unaffordable than London or New York.

I moved to Paris to start a new job recently, and the housing situation sucks so much. The prices in Paris are fairly high, 1000€ for a 30m² flat. But that's the relatively small heart of "Paris intra muros", excluding the "banlieues" (suburbs) which are cheaper and 30 minutes to an hour with the Métro (or the RER). That doesn't sound more unaffordable than London, not on a tech salary and colleagues have told me co-…

It's in large part (almost entirely?) because the laws make it extremely difficult to evict a tenant. It can take a very long time, so there's a lot of pressure on the tenant to prove they're not a future liability.

That's the big downside of heavy tenant protections - it goes so far, landlords take protective measures like torturing you with requirements.

Sure, there is a 'shortage' of housing - but all desirable, popular international tier 1 cities have this, so the word shortage is a bit of a misnomer. Although, Tokyo has something interesting to say about that, seeing that they are dealing with it better. That said my point above about purchase prices remains: you want to buy in Paris, you pay Manhattan prices with France wages. Good luck if you're not already a foreigner (partial topic of the news we're responding to) or very rich.

International rich like to buy and warehouse apartments in Paris for occasional use.

Re: Canada bans most foreigners from buying homes

#572

Post by oasisbob »

RestlessMind wrote: post #263
Negitivefrags wrote: post #219

Earlier quoted context omitted.

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…

Decades ago when the West was developed, there was very little value placed on the existing stuff. Five people died constructing the Empire State building. Do you imagine the uproar if that happens today? I bet human life was valued much less back then. Similarly, lots of neighborhoods were erased to make way for highways, railroads and industrial plants. Nowadays, try constructing an industrial plant in a major city…

> Five people died constructing the Empire State building. Do you imagine the uproar if that happens today?

People still die on construction projects all the time, on relatively uninteresting things even. eg, in 2019 four people died when a crane working above a Google office building in Seattle collapsed. It was local news for a few weeks, but I'm not sure it had any other effects, regulatory or otherwise.

https://en.wikipedia.org/wiki/Seattle_crane_collapse

Re: Canada bans most foreigners from buying homes

#573

Post by arcticbull »

ericmay wrote: post #560
arcticbull wrote: post #555

Earlier quoted context omitted.

Tokyo has all of those things, and yet. Why do you think supply and demand do not exist in the housing market? Why is this the one market on earth where it won't ever work? If you have as many houses as jobs in the nearby area then it will be more affordable. That's just facts. Further higher interest rates lead to lower house prices, to an extent (but only to the extent supply exceeds demand) because people buy hous…

> Why do you think supply and demand do not exist in the housing market? Why would you think that I think this? That's really confusing. I think the issue you have here is that you are thinking in extremely simplistic terms and not really accounting for real supply and demand in this particular market. Instead of looking to Tokyo (which is a generally bad example because Tokyo and Japan are not great generalized mode…

I mean here's my responses to each of the four points you raised:

1) Interest rates make existing housing stock less expensive as people are unable to afford a property of the same price based on fixed monthly payments.

2) Housing standards are relatively consistent, and you know Tokyo is on a fault line right?

3) Developers will happily add any kind of unit they think they can sell, just look at what the city of SF is rejecting on a regular basis. But even if you only build luxury housing, that pushes existing wealth out of less fancy units opening them up to lower wealth tiers. New supply is new supply. Period.

4) Lack of available workers factors into cost of construction, but cost of construction is absolutely dwarfed by market prices. If we were close at all to it, we could include (4) but we're just not.

> Tokyo is incomparable for a few reasons, but you can start by examining Japanese birth rates, immigration policy, and California's comparable car-only infrastructure.

This constrains demand, but the point remains that in their market supply and demand meet. Supply and demand can meet by increasing supply or by decreasing demand. Btw, Japan’s immigration policies are actually very lax, but the perception of their culture as unwelcoming to outsiders creates little actual demand. The US immigration policies by contrast are significantly more stringent.

Density and transit are a chicken and egg problem. More density however allows you to invest more in transit.

> If you want less expensive housing you'll have to live somewhere else.

This wasn’t the case historically and there’s no reason to think it can’t be the case in the future except for lack of zoning reform. Anyways if you want to take up the supply/demand thing feel free to take it up with Wikipedia, which cites plenty of sources that provide contrasting examples.

> That's just how the world works.

I disagree, but thanks for your perspective.

I look forward to your treatise on why supply and demand stops working when it’s nice outside ;) Especially since during COVID rents fell massively in SF as supply outstripped demand - even thought the weather remained lovely.

Re: Canada bans most foreigners from buying homes

#574

Post by cheeseomlit »

asdff wrote: post #568
cheeseomlit wrote: post #534

Earlier quoted context omitted.

Taxes in a fiat currency system only exist to remove currency from circulation to prevent excessive inflation. There is no real connection between tax revenue and government expenditure since any shortfall can simply be printed. If you are a US citizen every dollar you've ever given to the federal government has been thrown into a 30 trillion dollar black hole never to be seen again, I wouldn't characterize it as a g…

Taxes exist to fund the government and I support having a government and public programs.

They don't though, that's what I'm saying. Take a look at https://www.usdebtclock.org- the US government is funded by debt, not taxes. If the government accumulates so much debt that it becomes a mathematical impossibility for tax revenue to ever pay it down then what is the actual purpose of paying those taxes? The purpose is to remove privately held currency from circulation, which is necessary if you want to print trillions of newly-created dollars without instantly triggering hyperinflation. If that were not the case, they could stop collecting taxes altogether and operate exactly the same as before- the only difference being the national debt rising at a faster rate. In the US at least, taxes exist solely as a release valve to enable shockingly irresponsible monetary policy

Re: Canada bans most foreigners from buying homes

#575

Post by Tiktaalik »

BurningFrog wrote: post #570
Tiktaalik wrote: post #559

Earlier quoted context omitted.

Well I think the main reason is that it annoyed the populace that felt they were now having trouble buying a place due to all this foreign competition, and politicians need to serve the populace, not foreign investors. But the real problem is that building housing is a physical process that takes time and limited manpower. If we're devoting our trades to building empty condos for rich people, then they are not spendi…

Thanks. That makes some pragmatic sense, but to me, it's at best short-sighted. At worst it's a cover for NIMBY-ism and/or xenophobia.

There is 100% some xenophobia and nimbyism at the margins and those sort of people latching on to "foreign buyers!!" fears to advance their motives, but I do think there was underlying real problems and 100% not-xenophobic, wonky economist policy people in the government were concerned about real outcomes.

With this new Fed ban I'm not so sure what the data that is driving it is, maybe it is just politics with this one, but I do feel confident that with the earlier Foreign Buyer Tax brought in in BC there was real data and troubling trends to support the notion.

Re: Canada bans most foreigners from buying homes

#576

Post by fleddr »

carom wrote: post #175
fleddr wrote: post #150

Earlier quoted context omitted.

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.

400k for a house is about the cost of construction (~2k sqft).

In the Netherlands, 400K would typically be the value of the land + construction combined. The land is often owned by the municipality, then to a developer, and this is the municipality's #1 revenue stream.

Regardless, 400K is unaffordable to the vast majority of people.

Re: Canada bans most foreigners from buying homes

#577

Post by fleddr »

kelnos wrote: post #265
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…

2008 was 15 years ago, though. Certainly the home-building industry recovered quite a long time ago. Yes, there are some wrinkles: building material cost was very high for much of the pandemic, and now interest rates have gone up (I don't know how interest rates in the Netherlands get affected by US rates, but I imagine they're not totally independent). But there's a huge period from 2009 to around 2020 where home bu…

There's always implied demand as populations continue to grow. But this doesn't turn into an actual buyer during times of economic uncertainty. Thus, a deficit builds up.

You will drag along this deficit into the future, it has a vast impact on supply and thus price. And this is about to happen again. The Netherlands needs about a million new homes built by 2030 to meet projected demand based on population growth. A logistically impossible task even in good economic conditions. Thus a deficit in supply will remain and even grow.

Re: Canada bans most foreigners from buying homes

#578

Post by fleddr »

asdff wrote: post #495
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…

Zoning is a huge factor, just look at Amsterdam. Restrictive limit along with legally preserved farmland just a few miles from the center of the city, its no wonder no one is building. There's nowhere that you are allowed to.

My point is to stop obsessing over Amsterdam, San Francisco, New York...whichever dense city that can never ever meet demand. Stop defining the housing problem based on the exceptions.

Re: Canada bans most foreigners from buying homes

#579

Post by [deleted] »

llampx wrote: post #516
ravendug wrote: post #464

Earlier quoted context omitted.

Those are mostly temporary by definition so I don’t see that as a source of the longer term shortages at the macro level unless it is shown that the size of the student and temporary worker pool is growing significantly every year? Sure, many of those eventually go onto permanent residency but that’s still included in the 400k annual figure is it not? The number of asylum claimants is overstated in my opinion. Even i…

Why does temporary vs permanent status matter? Whoever is coming to Canada needs a place to live in.

[deleted]

Re: Canada bans most foreigners from buying homes

#580

Post by roncesvalles »

LAC-Tech wrote: post #298
rr808 wrote: post #217

Earlier quoted context omitted.

Western countries are all trying to encourage immigration because without it their populations will collapse. Right now populations are rising and causing house prices to rise but soon boomers will start dying leaving huge numbers of homes empty.

Global population will peak this century. Birth rates are dropping everywhere, and yes this includes the developing world (West Africa is half what it was, India is below replacement rate). The pool of working age immigrants will grow smaller and smaller. How much longer will we kick this can down the road?

For very long. As long as a country is a more desirable place to live, it will continue to get immigrants. It doesn't matter whether the source country has a growing or shrinking population.
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