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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

#131

Post by 0xDEF »

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,…

Tech workers in California are outliers. For most people in developed countries buying/investing real-estate is the only way to build wealth. Profits from real estate speculation is the only income that has low taxes here in Denmark.

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

#132

Post by nomel »

CapstanRoller wrote: post #119
tptacek wrote: post #103

Earlier quoted context omitted.

Housing would be (much) more difficult if nobody could rent and everyone had to own the homes they lived in, not easier.

There are more options beyond "own a house" and "pay someone else's mortgage without getting any equity"

Could you give some examples?

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

#133

Post by CapstanRoller »

carom wrote: post #78
goethes_kind wrote: post #24

Earlier quoted context omitted.

Governments should just build a bunch of socialized housing and rent it at a rent just high enough to offset the expenditure (i.e. way below private market value). That would put downward pressure on rents. That is what Vienna did and they are the only popular city in Europe without a serious housing crisis.

That would be so perverse if the government gave itself a monopoly on building housing. Just change zoning and make it legal for the private market to meet the need. Look at all the builders remedy projects in Santa Monica to see that this works.

Sorry, the "private market" had a chance to fix the problem but instead chose to squeeze tenants harder and harder for decades.

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

#134

Post by skippyboxedhero »

pjc50 wrote: post #105
goethes_kind wrote: post #24

Earlier quoted context omitted.

Governments should just build a bunch of socialized housing and rent it at a rent just high enough to offset the expenditure (i.e. way below private market value). That would put downward pressure on rents. That is what Vienna did and they are the only popular city in Europe without a serious housing crisis.

The UK had this system (council housing) and then basically dismantled it in the 80s. Then imposed some even more stupid rules. https://www.bbc.co.uk/news/uk-41324305 Woking council managed to make some terrible investments and is now bankrupt: https://www.bbc.co.uk/news/uk-england-surrey-65920223

It hasn't been dismantled. In fact, 20% of the private rental market is supported by the government.

All that happened is that councils stopped building homes and sold some of the ones they had to current occupants (and councils actually also have control over planning permission, so they did this and blocked anyone from building new houses at all).

There is other stuff going on (it is likely impossible for the UK to build enough housing given demographic trends atm) but this is all caused by not building enough houses (the reason why investors are buying houses in Canada is because there aren't enough of them, it is all the same problem).

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

#135

Post by CapstanRoller »

ako wrote: post #95
jseliger wrote: post #49

Earlier quoted context omitted.

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...

The problem is that it's a location supply problem, rather than a housing supply problem. People all want to live in the same locations, that are already full of houses.

As part of housing reform, we can also make more locations worth living in. There are plenty of small towns that could use the help (e.g. the Rust Belt)

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

#136

Post by mitthrowaway2 »

carom wrote: post #83
Fire-Dragon-DoL wrote: post #42

Earlier quoted context omitted.

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.

That's correct. But the price an investor can charge to renters scales with the opportunity cost of buying, so (house prices x interest rates).

Or equivalently, the price an investor will pay for a house scales with (rent - interest payments). If interest rates go up and housing prices don't fall, then market rents must be rising.

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

#137

Post by konschubert »

VHRanger wrote: post #104
konschubert wrote: post #100

Earlier quoted context omitted.

Just build more houses. North America is big. Stop fighting over scraps.

The fact that it's big doesn't matter. Building a million homes in North Dakota won't help anyone. People need to live near cities, where jobs are. Outside our privileged white collar world where remote work is easy, others need to live in metro areas. We need to build in and near cities, and improve the transit infrastructure.

"Build more houses" was meant as a shorthand for "Upzone cities".

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

#138

Post by konschubert »

CapstanRoller wrote: post #128
VHRanger wrote: post #104

Earlier quoted context omitted.

The fact that it's big doesn't matter. Building a million homes in North Dakota won't help anyone. People need to live near cities, where jobs are. Outside our privileged white collar world where remote work is easy, others need to live in metro areas. We need to build in and near cities, and improve the transit infrastructure.

We also need to create cities, and revitalize dying ones. There are many small towns in the US and Canada where I'd love to buy a house, but they all tend to suffer from the same terminal decline pattern: crumbling infrastructure, lack of opportunities, and a single WalMart supplying everyone while choking out all other business.

I sometimes daydream about building a city, just one, that prioritises cycling and walking over cars.

If you like cars, you can literally live everywhere else.

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

#140

Post by chongli »

tptacek wrote: post #103
Ghostt8117 wrote: post #101

Earlier quoted context omitted.

Yes, you are an investor. You do not live in the home you purchased. You rent it to earn money, i.e., an investment. This creates a huge problem. Rental properties have different regulations in different places. My brother-in-law was not given a lease renewal amnd was forced to move (within 30 days) while, where I live, that is illegal unless there is cause for eviction. It creates instability. Also, my rent increase…

Housing would be (much) more difficult if nobody could rent and everyone had to own the homes they lived in, not easier.

If no one ever bought houses to use as investment properties then demand would be a lot lower, making houses cheaper and thus more affordable to families. There are plenty of places in cities in Canada where the cost of renting a house today exceeds what it would have cost for a mortgage just a few years ago. Investors buying houses for rental income (and appreciation returns) compete with family home-buyers to drive up prices in desirable areas, especially near schools.
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