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Canada bans foreign home buyers for two years

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Re: Canada bans foreign home buyers for two years

#171

Post by incomingpain »

sumedh wrote: post #71
incomingpain wrote: post #25

We have how many foreign investment agreements? Banning foreign investment is not possible at all. The data is public as well, foreign investors aren't the problem. To say you are doing this would not only be punitively not allowed. So you're literally telegraphing that you intend to do nothing. Or for that matter try to make things worse.

> We have how many foreign investment agreements? Do these agreements say that foreigners have a right to buy houses in Canada?

>Do these agreements say that foreigners have a right to buy houses in Canada?

For sure.

https://www.international.gc.ca/trade-commerce/trade-agreeme...

CPTPP ensures that investors from the Asia-Pacific receive fair and non-discriminatory treatment. This means they must receive the same level of treatment as Canadian investors and any third-country investor in similar situations.

Re: Canada bans foreign home buyers for two years

#173

Post by binibus »

mschuster91 wrote: post #70
saos wrote: post #58

Thats doesn't solve much of the problem tbh. They need to build more homes. Much like the problem in the UK also. But in the UK we need to push back on normal people wanting this property empire and massively over leveraging themselves > The government will also impose higher taxes on people who sell their home within a year. Nice!

> They need to build more homes. Why build more homes at enormous expense (both financial and environmental), when most countries have way more than enough homes in total? The problem is two-faced: vacant properties sitting around empty because of money laundering and speculative usage on one side, and on the other side the usage disparity because rural areas have been left behind by modern infrastructure - particula…

> vacant properties sitting around empty because of money laundering and speculative usage

I don't have the numbers but I find difficult to believe that there's enough properties used for money laundering to move the prices.

> usage disparity because rural areas have been left behind by modern infrastructure

That's the problem. There are empty houses but too old or in places where people don't want to live. So to low the prices more houses need to be built there where people want to stay.

Another solution would be improve the communication channels between cities and rural areas.

Re: Canada bans foreign home buyers for two years

#174

Post by cehrlich »

fennecfoxen wrote: post #144
libertine wrote: post #62

Earlier quoted context omitted.

This is one of those things that a proper tax structure would do wonders - those who hoard housing should get a kick from a exponential tax. Like, what value are those corporations bringing to people, to the market, and to a country by hoarding houses other than controlling the renting market for some areas? How is that a good thing?

They are translating between a lump sum and an income stream. They are making a six-figure asset available for the low four figures a month, without someone needing to bring six figures of money, or five to six figures of down payment and closing costs and five times as much debt. If the six figure asset actually falls 50% in value, the tenant is not stuck and does not lose a penny. In short, they’re offering homes t…

You say this as though it wasn’t possible to rent before everything got bought out by corporations

Re: Canada bans foreign home buyers for two years

#175

Post by franciscop »

rch wrote: post #72
tomrod wrote: post #61

Earlier quoted context omitted.

Triple or quadruple property taxes after the 10th purchased residence in the state. Encourage tax breaks through high density development of condos with coop property management firms.

Why not progressively increment after the second? (not mutually exclusive with other measures)

I've been thinking a lot about this, and I think to promote everyone's owning a house, and even small-size investments, but to avoid megacorps the ideal would be something like:

1 house - tax breaks

2 houses - same taxes as currently for 2 houses

3+ houses - incrementally more expensive with each extra house

Also there's a really nice law in Spain, born for the wrong reasons, that makes you pay more taxes if the house is empty vs if someone lives there.

Re: Canada bans foreign home buyers for two years

#176

Post by bitshiftfaced »

stevesimmons wrote: post #135
hallway_monitor wrote: post #110

Earlier quoted context omitted.

I saw an Australian sitcom where the house went up for auction. It was a proper live auction where everyone showed up to bid on the house. I was flabbergasted as I had no idea things were done in any other way than blind bidding as that is how it is always done here in the US.

In Melbourne, this is totally normal. Everyone stands in the street, prospective buyers, neighbours, and people starting their house search. The estate agent stands on the front step, acting as the auctioneer, using the rolled up "Section 32" document like a gavel. Typically the auctioneer draws out bids in $10-20k increments, then knocks it down with a "going once, going twice, going three times..." call. Just befor…

> Sales almost never fall through. If the buyer cannot get financing etc, the seller keeps their 10% deposit. The seller cannot back out.

In the states, once the purchase agreement is signed, the home goes through inspection at some point before the sale. The inspector finds a hundred little problems with the house, and the buyer can back out of the sale for any little complaint.

Re: Canada bans foreign home buyers for two years

#177

Post by willnonya »

Their whole approach is asinine. If foreign buyers are the level of problem they suggest then removing them from the market is less likely to depress home prices and more likely to convince people they shouldn't put their homes on the market because they can't get top prices.

In the end I expect this to have no impact as it seems more likely this is just government attempting to deflect attention away from problems they've created.

Re: Canada bans foreign home buyers for two years

#178

Post by goodpoint »

pastacacioepepe wrote: post #50
eru wrote: post #24

This is really, really stupid. It reeks of economic illiteracy. If you think foreign investor cause harm, just estimate how much harm it is, and tax them accordingly. Why would you ban them? Taxing is almost always more economically efficient than banning. You can even pay out (part of) the tax take to the people you think are harmed. (In general, a land value tax for everyone would be a good idea. But if political r…

Explain how would you tax them effectively then, since they are foreign. Every time I talk about taxing the rich, I'm stormed by people calling me economically illitterate and telling me it's impossible as the rich will always find a loophole. So if you think they can find loopholes on the ban, why couldn't they find loopholes on new taxes? They do already and very effectively.

Targeting foreign investors is both difficult and morally wrong. You want to target speculators (landlords) regardless of nationality.

And it's easy to implement: tax houses not owner-occupied very heavily.

Re: Canada bans foreign home buyers for two years

#179

Post by aww_dang »

hkt wrote: post #123
aww_dang wrote: post #3

Earlier quoted context omitted.

There are countries which prohibit foreign ownership of real estate. However capital controls typically prevent money from leaving, rather than entering. It will be interesting to see how this trend plays out.

Interesting indeed - to have gone from a capital starved era that led to the fetishisation of direct foreign investment to an era where there's so much capital seeking returns that it gets turned away. A strange inversion if ever there was one.

It fits with the theme of declining globalization and increasing protectionism. Still it seems strange for an allegedly free and open capitalist nation to turn away capital.

I suppose the political alternative would be questioning why the real estate market was managed in such a way to restrict supply, or disincentivize renting some of these foreign owned properties. Always easier politically to point and blame the external actors, the other tribe.

If this latest measure proves ineffective and taking responsibility for domestic mismanagement is off the table, what comes next? Nationalization or a bail-in of foreign held properties seems extreme, but how far can this go?

Re: Canada bans foreign home buyers for two years

#180

Post by WithinReason »

jusssi wrote: post #167
foldor wrote: post #131

Earlier quoted context omitted.

The theory of that, and the reality of it are two different things. As someone who has been on both sides of this in Ontario, I can tell you for a fact that blind bidding results in people over paying, and never knowing by how much. The stress of buying a home in the GTA has lead people to stretch their budgets beyond reasonable limits, and realtors have only made it worse now. In recent years it's started to become…

The question is, would an open auction be any better? The process will just happen at smaller increments. And you will have ghost bids to prop up the prices.

I would use a Vickrey auction:

https://en.wikipedia.org/wiki/Vickrey_auction

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