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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

#141

Post by Tiktaalik »

Seems like an alarmingly big scary number, but due to the fact that there has been extremely low amounts of rental housing created by purpose built rental (PBR) housing for decades, and virtually all rental housing is created via condo creation and secondary rental of condos, necessarily if there is going to be any rental housing creation at all, it will be due to investors buying condos and renting them out.

As rental demand spikes as it has been, it makes perfect sense that investor interest and share of the market would also increase.

Now obviously, one can point out "near zero purpose built rental development seems bad!" and many have, but so long as condos dominate what is being built, a relatively high investor share is actually normal and required.

If investors for example were limited or banned at this moment, the most immediate net result would be increased scarcity for renters, and higher rents.

In the long term clearly there needs to be more PBRs, non-profit rental and publicly owned rental housing.

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

#142

Post by Fire-Dragon-DoL »

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.

I completely agree with what you are saying, I'm just describing what ACTUALLY happened. With 99% occupancy, this is literally what the price happened. Otherwise I can't explain how my rent was 1400$/month for a 2 bedroom 3 years ago and now it's 2700+$, which is insane

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

#143

Post by Tiktaalik »

carom wrote: post #56
bugglebeetle wrote: post #22

Earlier quoted context omitted.

Okay, then do Georgism or some other form of land value tax. Distinction without a difference. Destroying your society for the benefit of real estate speculators is insanity, is my point.

It's funny because LVT would reward multi family investment properties while raising taxes for single family home owners.

Would reward mansion owners even more.

The biggest losers of a LVT are SFH owners living in a humble old near worthless house on relatively valuable land.

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

#144

Post by abdullahkhalids »

mitthrowaway2 wrote: post #88
plastic3169 wrote: post #51

Earlier quoted context omitted.

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.

Often laws passed by the federal legislature or provincial legislature that, in practice, only effects people living in a small area. I don't see why decisions related to housing can also not be made at larger level.

To put it another way, it often happens that people will vote for candidates at the provincial/federal level that support increased immigration and/or population growth, and simultaneously vote NIMBY at the local level.

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

#145

Post by Tiktaalik »

anonzzzies wrote: post #96

I wish the country I live in had the same as many Asian countries; you can only buy if you have a passport of the country or if the building is owned by more than 50% of passport holders.

At this point various jurisdictions in Canada have layers upon layers of foreign buyer taxes, bans, and empty homes taxes and the issues remain.

Foreign buyers and such can be problems, but at this point looking at Canada's experience here, it's abundantly clear it's not at all the problem and there are deeper systemic problems that are causing the misery.

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

#146

Post by Tiktaalik »

26fingies wrote: post #123

Canada's housing market is F'd and this is the reason. There's a lot of noise made about "foreign investors" (which is really just an epithet for Chinese people) but the investors screwing everything up are Canadians themselves.

Maybe from the POV from someone who badly wants to buy a condo, but from the POV of a renter who will never buy, these investors are the ones that are creating their housing.

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

#147

Post by Tiktaalik »

Fire-Dragon-DoL wrote: post #142
carom wrote: post #83

Earlier quoted context omitted.

>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.

I completely agree with what you are saying, I'm just describing what ACTUALLY happened. With 99% occupancy, this is literally what the price happened. Otherwise I can't explain how my rent was 1400$/month for a 2 bedroom 3 years ago and now it's 2700+$, which is insane

Yep! It's because of continuous near zero rental vacancy in Vancouver.

Landlords can continue to increase the rent at the maximum allowed every year and tenants are forced to stick around because where else are they going to go? Move to what apartment? There are none.

So long as there's practically no available apartments landlords will feel free to keep cranking up rent. If we ever get to the point where renters could genuinely have the ability to benefit from moving, then landlords will think twice before raising rents.

Briefly ever so briefly at the start of the pandemic when all the students left rents plunged. That shows what needs to happen. Not kicking out all the students of course, but the creation of a huge amount of surplus homes. Only in such a healthy vacancy environment will rent increases go below inflation.

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

#148

Post by chongli »

Tiktaalik wrote: post #143
carom wrote: post #56

Earlier quoted context omitted.

It's funny because LVT would reward multi family investment properties while raising taxes for single family home owners.

Would reward mansion owners even more. The biggest losers of a LVT are SFH owners living in a humble old near worthless house on relatively valuable land.

The biggest losers of a LVT are SFH owners living in a humble old near worthless house on relatively valuable land.

No, because those folks can sell their property to a developer and earn a nice return while moving to a cheaper area.

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

#149

Post by kasey_junk »

chongli wrote: post #140
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.

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…

How does an investor who is renting drive up the cost of housing? Barring certain oddities (e.g. college towns tend to have higher rental costs than purchase due to the transient nature of the populace) rents and mortgages should obtain parity very quickly, especially for families looking to stay longer than the transaction cost of the loan.

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

#150

Post by Tiktaalik »

passing_by_and wrote: post #80
ChumpGPT wrote: post #3

Canada has very little private land ownership.The Federal Gov hoards land and creates a severe shortage of land for individuals to purchase. They need to open up the billions of acres of accessible land to 1st time buyers and then to existing property owners. Especially in the Province of Ontario. They also intentionally keep interest rates low so existing house/property owners can leverage their properties to buy mo…

Bingo. Canada is empty. It has the second lowest population density in the world. Most land is owned by the crown and is simply parcelled out to the friends and family's of the ruling class. Adding to that, you have some of the worst zoning and development practices in the modern world. Most of the country is simple a piggy bank for money laundering in the form of empty condo towers.

Canada is empty for a good reason. Explore around and you'll see why. Sheer mountain, muskeg and tundra.

Where people live are the places where it's reasonable to live. Everywhere else is misery or impossibility.

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