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Investors account for 30 per cent of home buying in Canada, data show

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Re: Investors account for 30 per cent of home buying in Canada, data show

#81

Post by mikem170 »

collaborative wrote: post #23
bugglebeetle wrote: post #12

Earlier quoted context omitted.

If there’s an affordability housing crisis at the level of Canada, where home prices are so wildly out of whack relative to median incomes, it’s IMO entirely reasonable to ban the purchase of investment properties in the single family homes market for anyone . This will never happen because of the political backlash, but housing as a speculative asset is fundamentally insane and corrosive to societies. Housing afford…

A person I know of outstanding moral character (has adopted 3 kids) boasts about voting against any development in his area. I don't know what it'll take for people to see what you are saying

California seems to be forcing zoning changes onto cities that have not allowed enough new housing to be built (things like expediting approvals for allowed development, also allowing R3 to replace R1).

I assume that their politicians were worried about all the people leaving.

It makes sense to set a lot of zoning policy at the state level, where all people are represented, so that incumbent local property owners can't selfishly micromanage everyone else.

Japan is an example of a place that does a great job with this. Housing there is more affordable and convenient. Residential side streets are off-street parking only, and each property can be a triplex, with one unit allowed to be a low-impact business, off-street. These side streets connected to larger roads with denser retail/apartments leading to planned high-rise areas that are allowed to grow when/if the population grows. Industrial areas are separate, on the other side of town.

Re: Investors account for 30 per cent of home buying in Canada, data show

#82

Post by rwmj »

jseliger wrote: post #49
newbie578 wrote: post #4

I do wonder what country will be the first one to ‘break’ and implement restrictions on buying homes. The current situation is not sustainable, and soon something will need to give.

I do wonder what country, besides Japan, will be the first one to 'break' and realize that, when you restrict supply in the face of rising demand, prices rise. The current situation is sustainable for as long as voters keep voting in NIMBY politicians. Something may give, but something may not. https://www.mcsweeneys.net/articles/i-will-do-anything-to-en...

It's absolutely about NIMBYs, but I wouldn't blame "NIMBY politicians" as they are responding to the demands of their voters (else they fairly soon wouldn't be politicians).

An interesting article about the UK has never really built houses, except for a very short time before the second world war: https://worksinprogress.co/issue/why-britain-doesnt-build If we haven't built sufficient houses for this long it's hard to see what could change to allow us to build more.

Re: Investors account for 30 per cent of home buying in Canada, data show

#83

Post by carom »

Fire-Dragon-DoL wrote: post #42
gruez wrote: post #29

Earlier quoted context omitted.

>They've recently increased the interest rates but it's woefully insufficient. What should it be? I'm sure you can push house prices down even more if you bump interest rates to 10% or whatever, but raising interest rates also increases monthly payments that buyers have to make, which ends up making houses less affordable. At the end of the day I care less about the sticker price of the house than the overall cost I…

Raising interest rates increase rent prices. Here in Vancouver the rent prices increased by 50% in like 3 years and it seems the reason is mostly to cover mortgage + have income. Really bad.

>it seems the reason is mostly to cover mortgage + have income

That isn't how rent works. It is a market and buyers won't just pay any price the landlord sets. If prices went up, it means people were willing to pay those prices.

I wish I could charge $5k per month for a 600 sqft unit, but no one will pay that.

Re: Investors account for 30 per cent of home buying in Canada, data show

#84

Post by FirmwareBurner »

rwmj wrote: post #48
matt3210 wrote: post #16

Not sure about Canada, but I make way above the median in tech in California and I have zero interest in buying a home. Having a home would be a huge hassle when I look for new work every 3 or 4 years. The math shows a home in almost any area in the USA is only a financial benefit after 8 or more years of staying in that home (compared to an apartment), when taking closing costs, maintenance, large upfront interest,…

Local laws vary a lot in how much protection they give to renters. Here in the UK I absolutely wouldn't want to be renting, you have very little security and can be (legally) kicked out with a couple of months' notice in most cases. Whereas in Germany it's my understanding that renters essentially can never be kicked out unless they do something egregious, and it's usual for people to choose to rent for life.

> Whereas in Germany it's my understanding that renters essentially can never be kicked out unless they do something egregious

That's a double edge sword. Would you rent your place to people knowing they can stop paying and trash your place and you can't get rid of them? I'm not a landlord but this scenario would scare the hell out of me, which is probably why German landlords ask for so may documents(bordering on privacy violation), and are so picky when choosing tenants that apartment hunting is basically a part time job in Germany.

>it's usual for people to choose to rent for life

Most people don't choose the rental life, but they don't have a choice, since property prices in German cities are far out of reach of the middle class who doesn't have inherited wealth or financial assistances from parents.

Renting is fine when you're young and employed, but owning your place of living outright by the time of your retirement, is still better for you financially, than having to pay rent as a retiree, as most likely rental costs will go up faster than inflation and wage growth as per current trajectory, and your pension will be too small to pay for living costs and rent on top of that meaning you'll struggle with poverty like some retirees in Germany today, but on a larger scale. Whereas if you pay off your mortgage until then, your retirement will be much less stressful.

Oh, and it will get even worse from here as Germany is refusing to build, to reduce CO2 emissions apparently, and increase migration will put additional pressure over existing housing stock. Great for throe who already own, not for those new to the market.

Re: Investors account for 30 per cent of home buying in Canada, data show

#85

Post by theptip »

__derek__ wrote: post #2

> The central bank defines an investor as a buyer who took out a mortgage to buy the property while maintaining a mortgage on another home. In the US, a lot has been made about large investment companies buying up houses, but this is something different entirely: > This category represents homebuyers with multiple mortgaged properties. This means investors are homebuyers who either: > * purchase an investment propert…

So this includes all landlords too? If I buy a second house, do it up, and rent it, I am an “investor”?

While I can see how the delta in this metric is suggestive, it is not clear how it affects the available housing stock (rent+buy).

What I think people actually care about is unoccupied investment properties, where someone buys and leaves it vacant. Apparently a lot of Chinese capital is parked in this way due to their capital controls preventing cash from being freely moved out of the country, though to be clear it’s not unique to China.

Or if these properties are being flipped, perhaps that has a short-term negative impact on available housing stock as properties are taken off the market while being renovated. (If the marginal second bidder would have moved in to the house as-is, then the winning bid renovating and selling is reducing supply / increasing demand for housing.)

As you note, a whole other kettle of fish around REITs that won’t use mortgages. In the US, REITs are a major contributor to new construction for example.

Re: Investors account for 30 per cent of home buying in Canada, data show

#86

Post by doubled112 »

xienze wrote: post #18
bugglebeetle wrote: post #12

Earlier quoted context omitted.

If there’s an affordability housing crisis at the level of Canada, where home prices are so wildly out of whack relative to median incomes, it’s IMO entirely reasonable to ban the purchase of investment properties in the single family homes market for anyone . This will never happen because of the political backlash, but housing as a speculative asset is fundamentally insane and corrosive to societies. Housing afford…

Too many people get hung up on the “house” being the thing rapidly appreciating when in areas like major Canadian metros it’s the _land_ sitting under the house that is becoming more and more valuable as the Canadian government is importing more and more full grown adults who need housing _today_ in those major metros.

While you're spot on, let me know when you can easily pick up a home and move it to cheaper land. It's just not practical to separate the two.

Re: Investors account for 30 per cent of home buying in Canada, data show

#87

Post by robinson7d »

LeeroyWasHere wrote: post #63
calderwoodra wrote: post #27

Earlier quoted context omitted.

I'm guessing you don't have children? I don't either, but I suspect that's folks main motivation for buying a home.

Bingo, it sucks to live with kids in a condo because condos aren't built for families, neither are the neighborhoods with condos. There's other ways to build density without packing everyone into sad sardine cans.

“Home”, for the purpose of this article, includes condos. The data is about all mortgaged properties.

Re: Investors account for 30 per cent of home buying in Canada, data show

#88

Post by mitthrowaway2 »

plastic3169 wrote: post #51
collaborative wrote: post #23

Earlier quoted context omitted.

A person I know of outstanding moral character (has adopted 3 kids) boasts about voting against any development in his area. I don't know what it'll take for people to see what you are saying

I think the problem is that people have a vote. Most people would like things to stay as it is around where they live. I feel in my country there is not so much tools for NIMBYism as people are not listened to so much. I can support better infrastructure on a city level but can’t really do much if it is decided that the train needs to run over my house.

Yes, people who currently live somewhere get a say, while others who want to move there do not.

Re: Investors account for 30 per cent of home buying in Canada, data show

#89

Post by modzu »

newbie578 wrote: post #4

I do wonder what country will be the first one to ‘break’ and implement restrictions on buying homes. The current situation is not sustainable, and soon something will need to give.

it would be nice if it werent sustainable and something had to change. unfortunately i don't see any reason why it cant just continue to get worse. it could get a lot worse.

Re: Investors account for 30 per cent of home buying in Canada, data show

#90

Post by rwmj »

FirmwareBurner wrote: post #84
rwmj wrote: post #48

Earlier quoted context omitted.

Local laws vary a lot in how much protection they give to renters. Here in the UK I absolutely wouldn't want to be renting, you have very little security and can be (legally) kicked out with a couple of months' notice in most cases. Whereas in Germany it's my understanding that renters essentially can never be kicked out unless they do something egregious, and it's usual for people to choose to rent for life.

> Whereas in Germany it's my understanding that renters essentially can never be kicked out unless they do something egregious That's a double edge sword. Would you rent your place to people knowing they can stop paying and trash your place and you can't get rid of them? I'm not a landlord but this scenario would scare the hell out of me, which is probably why German landlords ask for so may documents(bordering on pr…

Nevetheless, 64% of people rent in Germany. (source: https://webcache.googleusercontent.com/search?q=cache:https:...)

House prices in Germany are 120% of the average for the whole EU and looking at the graph they seem to be slightly higher than the middle of the pack. They certainly don't seem to be outrageously unaffordable, unlike Ireland. (source: https://ec.europa.eu/eurostat/cache/digpub/housing/bloc-2a.h...)

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