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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

#151

Post by chongli »

Tiktaalik wrote: post #146
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.

No they're not. This is like saying the scalpers who bulk-buy all the concert tickets and resell at huge markups are "ticket creators." If you take investors (30 percent of home buyers, according to TFA) out of real estate then demand goes way down, taking prices with it and making housing a lot more affordable.

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

#152

Post by lotsofpulp »

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.

Kind of like people in developing countries who want to move to developed countries.

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

#153

Post by Tiktaalik »

chongli wrote: post #148
Tiktaalik wrote: post #143

Earlier quoted context omitted.

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.

The humble house owner can already do that now under the current property tax regime (where they would pay less than under a LVT regime). The only change here is that their taxes go up and they're thus "encouraged" to sell. Seems bad from their POV!

The LVT would zero the tax on improvements, and accordingly the tax on land would have to increase to compensate.

A mansion owner for example may have 40% of their bill be related to the expensive mansion building. Some regular humble house owner may only pay 5% of their tax based on the value of the house. So when the portion of the houses are eliminated and the land tax between them normalized, the mansion owner now pays less and the humble house owner pays more.

Listen I like a LVT I'm just pointing out that it's a big time giveaway for the very rich if it's implemented in a very basic way.

The net result is relatively poor homeowners are shoo'd out of their homes and forced to capitulate and move due to high taxes, while mansion owners get a tax cut.

If we want to bring in a LVT then we should also be bringing in some progressive property taxes on the wealthy.

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

#154

Post by Fire-Dragon-DoL »

Tiktaalik wrote: post #147
Fire-Dragon-DoL wrote: post #142

Earlier quoted context omitted.

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 cou…

Indeed! From my understanding, they are going to make a bunch of very high density towers in north vancouver and kitsilano that should resolve a good chunk of these problems, or that's the hope.

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

#155

Post by __derek__ »

sokoloff wrote: post #117
__derek__ wrote: post #66

Earlier quoted context omitted.

I believe those would be called repeat buyers under the Bank of Canada methodology because the Transunion data should connect their new mortgage with the discharge of their previous mortgage.

If someone had a house with a mortgage, bought another house with a mortgage in May, and discharged the original mortgage in October (or the following February), were they a repeat buyer or an investor? Plain English would say "repeat buyer", but I can't tell definitively how they'd be treated in the data. The one clear reference in the article strongly suggests they'd be categorized as an investor: "The central bank…

I don't know. There's no link to the Transunion data set, so it's not possible to dig in. Even the sentence you quote is ambiguous because "maintaining" indicates an ongoing active state. Assuming that the dataset is a point-in-time snapshot, there are probably some repeat buyers classified as investors because of timing.

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

#156

Post by therealdrag0 »

26fingies wrote: post #126
ejb999 wrote: post #122

Not sure you will ever be able to ban investors from owning properties that are rented out long-term - a fair amount of the population wants to, or can only afford to, rent - and someone needs to be the landlord. On the otherhand, it seems like AirBnB's, i.e. short-term rentals, are ripe for some legislation to undo the negative affects they are having on many communities.

> Not sure you will ever be able to ban investors from owning properties that are rented out long-term Why not? We are making up the rules as we go. The government has the guns, it can do what it wants. > - a fair amount of the population wants to, or can only afford to, rent Well a fair amount of the population wants to buy a home remotely close to where their job and family is, but it turns out there's a population…

Why doesn’t someone need to be a landlord? Without landlords you gonna have a lot more homeless people.

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

#157

Post by Tiktaalik »

chongli wrote: post #151
Tiktaalik wrote: post #146

Earlier quoted context omitted.

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.

No they're not. This is like saying the scalpers who bulk-buy all the concert tickets and resell at huge markups are "ticket creators." If you take investors (30 percent of home buyers, according to TFA) out of real estate then demand goes way down, taking prices with it and making housing a lot more affordable.

There's a Canadian specific nuance here.

In Canada for decades there has been virtually no construction of purpose built rental housing. The primary new rental housing that is being created is wholly through condos being built and people renting out their condos.

Accordingly the only new product being created for renters is being created by investors buying condos.

Like it's bad that this is the case and this should change, but I'm just pointing out the reality right now of this present environment.

There would need to be enormous systemic changes to the dynamics of the Canadian housing market if we wanted to start banning investors from buying and renting homes. Otherwise rental vacancy will plunge even further and rents will go up.

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

#158

Post by therealdrag0 »

goethes_kind wrote: post #24
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.

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.

I saw a YouTube video describing Singapore housing and it sounded similar to this, but for condos not rentals.

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

#159

Post by chongli »

kasey_junk wrote: post #149
chongli wrote: post #140

Earlier quoted context omitted.

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.

Because real estate prices are highly location-specific. People looking to buy a home in a nice, safe neighbourhood with a school in walking distance are forced to compete with investors buying houses and turning them into Airbnbs. As the article says, 30 per cent of home buyers are investors looking to grow their portfolio, not people looking for a place to live and raise a family. If those investors put their money into the stock market instead then that would free up the limited resource of homes near schools, causing prices to fall and making it more affordable to start a family.

Imagine what life would be like if we let billionaires buy up all the lakes, rivers, and other freshwater reservoirs. Water prices would shoot through the roof and we'd all be forced to pay the "water barons" whatever they decide to charge. It would be a dystopian nightmare and absolutely toxic to society. If you're curious, this is the premise of the classic sci-fi book Dune.

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

#160

Post by adverbly »

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.

Bingo. If the system allows significant money to be made then it continue to be an investment vehicle regardless of who does the investing. You can't make housing a good investment while simultaneously making it affordable.

Land value tax would have fixed this decades ago, and it would still work today. I would love to see a single-issue political party push for it at this point.

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