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Billions in 'unknown' funds flowing into Canada's housing market [video]

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Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#141

Post by zz865 »

teruakohatu wrote: post #17

New Zealand has a similar housing problem. House prices are skyrocketing and pricing out young people. A 25-30% rise in the past year has meant few people are saving fast enough to get a deposit. But two or three years ago the govt. banned overseas buyers. There is no reason to suggest the ban is not effective. It even bans non-permanent residents, so plenty of legitimate residents (work visas) can't purchase propert…

NZ has no capital gains tax, low property taxes and negligible stock market. Its a great way to make money and really the only way to make money.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#142

Post by wuschel »

digislave wrote: post #116
wuschel wrote: post #111

Earlier quoted context omitted.

Let us assume it is not overseas buyers - what factors are left? Is it just access to cheap credit that drives investment into the housing market all over the globe?

Why not? It seems obvious that cheap credit would drive up prices. For example people could just be bidding up to what they can pay off in about 30 years. If they simply do that, cheaper credit would rise house prices.

I was just wondering. It's hard to understand markets, IMHO, and I have no feeling how a potential balance between cost of money, supply and demand should look like in a sector like housing. Do you have any references or literature that would give me a better understanding?

Originally, I also thought that proper restriction of foreign investment might be a good solution. I agree with you that it must be domestic actors that are to drive prices upwards.

On a social level, this is going to generate a lot of problems, as it locks out people w/o access to credit to take part in the market. It is crazy what happens in cities like Berlin in regard to gentrification. But even other cities that do not have a hype status are affected by this.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#143

Post by Cthulhu_ »

teruakohatu wrote: post #17

New Zealand has a similar housing problem. House prices are skyrocketing and pricing out young people. A 25-30% rise in the past year has meant few people are saving fast enough to get a deposit. But two or three years ago the govt. banned overseas buyers. There is no reason to suggest the ban is not effective. It even bans non-permanent residents, so plenty of legitimate residents (work visas) can't purchase propert…

Could it be as simple as money being funneled through NZ nationals to buy up houses?

I mean housing prices are up everywhere it seems, one could think there's an evil shadowy cabal of rich investors buying up properties.

But, and I'm not an economist or anything here, on the other hand there's a few forces pushing average people to it; we've recovered from the housing crisis from 2008 onwards. Savings account interests are on the floor, so people are looking to put their money somewhere else - a house is a great long term investment.

another one I heard is that "big" loans from e.g. the European Central Bank are really low interest, pushing banks to lower mortgage rates, which makes people think "now is the time to buy and fix my mortgage rate", which is what I ended up doing a few years ago.

And of course there's the 'rona, which has made a lot of well-off people reconsider their overpriced living conditions in the big cities. They can get a real house outside of the big cities for the money they make, and if they can work remote or limit commuting, it makes sense.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#144

Post by WanderPanda »

teruakohatu wrote: post #17

New Zealand has a similar housing problem. House prices are skyrocketing and pricing out young people. A 25-30% rise in the past year has meant few people are saving fast enough to get a deposit. But two or three years ago the govt. banned overseas buyers. There is no reason to suggest the ban is not effective. It even bans non-permanent residents, so plenty of legitimate residents (work visas) can't purchase propert…

I don‘t see why foreign investment would be bad for a domestic housing market in the mid/long term. In the end real estate shouldn‘t be bound to a low stock to flow rate, given its (delayed) supply elasticity. Combined with a possible remote working trend this should benefit construction workers etc. a lot medium term.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#145

Post by rorykoehler »

There should be a global rule that non-residents can't buy property. Homes should be prioritised for living not investments. It's a drag on the global economy with so much money being tied up in unproductive assets which in turn soak up even more money through rent seeking.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#146

Post by xenadu02 »

exporectomy wrote: post #32
hellbannedguy wrote: post #15

Earlier quoted context omitted.

Canada, and the USA, need to make buying our land harder, especially for foreigners. In the USA, all it takes to buy a house is money. A wealthy person sitting anywhere can buy a home with a email, and a few clicks, or a phone call. All it takes is money. If a person can't legally live in the home he bought, why are we selling it to them? I know the answer, but don't like it. I don't know of any other country that ma…

New Zealand did that a couple of years ago. House prices continued to skyrocket as if nothing had happened. It's local people who keep buying them and paying through the nose.

AFAIK they left a huge loophole: an NZ company can buy all the property it wants and foreigners can start or buy stakes in these companies.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#147

Post by anovikov »

skzv wrote: post #137
anovikov wrote: post #68

If idiots want to pour their millions into worthless concrete to inevitably lose everything when the wave of free money from central banks recedes, leaving innumerous almost free homes in the market for everyone to buy - why any sane person should object? Notice that there is no comparable craze on the stock market. P/E has gone somewhat up sure but it's just out of anticipation of record corporate profits in the com…

What are your primary investments? Do you own any real estate?

I pour pretty much everything into S&P 500 plus have some cash for balancing. Yes i bought a few apartments when i was basically a kid in my early 20s but not in the last 15 years and not planning to ever buy any real estate unless i'll come to be able to do it on a proportion of my income that lets me completely ignore "investment" consequences of such a decision (say Yes commercial real estate is a good thing. There are good rental yields on it. It's not generally a gamble. But entry ticket is high there and every decision is important unless you are billionaire, and even then it looks too similar to stock picking, even worse than that. You need to really understand shit about real estate and research a particular place you want to buy and it's surroundings very well, too easy to make a stupid mistake.

Also residential real estate might make sense but not when you buy a house for yourself. Crappy cheap 1-2 bdr apartments to rent out work OK, and they are a lot more liquid too. But it looks too much like "job".

Single family house you'd want to live in, clearly "no". It's almost always a bad investment decision.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#148

Post by forgingahead »

spfzero wrote: post #73
guai888 wrote: post #39

Earlier quoted context omitted.

Actually CCP is doing everything they can to stop the outflow of money. CCP wants to keep the money inside of China but not very successful. There is no rule of law in China and people with money in China want to put money in place where government can not take it away from them. As CCP tighten control, money will keep flowing out by any mean possible.

This. China has no safe place for people to save the money that they have made, by whatever means. Anywhere you put it in there, it can go away in an instant if the government wants to take it away from you. We don't understand this in the west, but whatever you have, in some countries, is fair game for people with friends in high places. It's not just China, but Russia and many other countries are like this. If you…

There are severe and onerous asset forfeiture laws in many Western countries, not to mention the catch-all magic phrase of "eminent domain". If any government anywhere wants something from you, it will take it. You will not be able to outlast via the courts or whatever legal means you think are available, rather you'll likely burn all your available finances fighting it.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#149

Post by DrBazza »

London has similar problems. Apartment blocks that have a hundred flats, but only 5 are occupied all year round. The new ones at Battersea being a good example. The others owned by shell companies that are speculating and investing, or just plain hiding ownership and tax dodging.

The UK government have made some small steps in trying to associate property with people via proceeds of crime acts, and the financial conduct authority, but it is woeful.

Re: Billions in 'unknown' funds flowing into Canada's housing market [video]

#150

Post by concordDance »

WanderPanda wrote: post #144
teruakohatu wrote: post #17

New Zealand has a similar housing problem. House prices are skyrocketing and pricing out young people. A 25-30% rise in the past year has meant few people are saving fast enough to get a deposit. But two or three years ago the govt. banned overseas buyers. There is no reason to suggest the ban is not effective. It even bans non-permanent residents, so plenty of legitimate residents (work visas) can't purchase propert…

I don‘t see why foreign investment would be bad for a domestic housing market in the mid/long term. In the end real estate shouldn‘t be bound to a low stock to flow rate, given its (delayed) supply elasticity. Combined with a possible remote working trend this should benefit construction workers etc. a lot medium term.

Two words: planning permission
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