Canada to ban foreigners from buying homes • Hacker News Board

Re: Canada to ban foreigners from buying homes

#231

Post by Tiktaalik » Thu, Apr 07, 2022, 6:32 PM UTC

tomatowurst wrote: post #170

seanmcdirmid wrote: post #147

Earlier quoted context omitted.

> I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” There is truth, however. The Wenzhou house wife property speculator trope has some basis in reality, and Chinese markets are already rife with massive speculation that has seeped into foreign markets popular for Chinese emigration (Toronto, Vancouver, and to a much lesser extent NYC and west cost American cities). You don't…

There is a huge crowd of local Canadian landlords that own or seek to own more than one property. This is the group that benefits from the narrative that Asian foreigners are buying up the local estate. The really affluent immigrant groups aren't buying multiple properties, they already have a great deal of income, and their properties are well outside most of what HN can afford and do not impact the condo market whi…

Lots of bigots have latched onto Vancouver housing issues as a way to further their anti-immigration views. It's gross.

This doesn't mean though that there haven't been real issues with the Vancouver market that involve foreign wealth.

Prior to the foreign buyers tax we were seeing condo developers explicitly opening up sales offices in foreign cities, explicitly marketing their condos as pied-a-terres. I understand why people didn't like that. That sort of thing really doesn't help the local buyer or renter.

I'm happy to see that while Canadian politicians have brought in these rules to deal with some distortions of the real estate market from foreign wealth, we really haven't our politicians embrace the bigoted anti-immigrant rhetoric around this topic of the sort that you occasionally see on twitter and reddit.

Re: Canada to ban foreigners from buying homes

#232

Post by rwmj » Thu, Apr 07, 2022, 6:32 PM UTC

boplicity wrote: post #99

______-_-______ wrote: post #62

Earlier quoted context omitted.

I mean... it has to eventually. If my country has a population of 50 million and I build 800 million homes, will investors keep buying them all at above market rates (read: more than I spent building them)? Then I can build 100 million more and keep collecting infinite money?

This can go on longer than you think; it leads to "ghost cities" -- huge areas full of empty housing bought by speculators. https://allthatsinteresting.com/chinese-ghost-cities

The other part should be a supertax on properties which are empty for more than 6 months.

Re: Canada to ban foreigners from buying homes

#233

Post by ipaddr » Thu, Apr 07, 2022, 6:33 PM UTC

ryan93 wrote: post #137

AzzieElbab wrote: post #121

Earlier quoted context omitted.

I think people are missing the fact that for many Canadians values of their homes represent their live savings. So while homeownership remains high in Canada doing something substantial about re prices would ruin peoples lives.

It wouldn’t ruin lives to reduce wealth that was stolen from people unable to buy homes. It would also help their kids. Something lots of modern homeowners don’t give a shit about at all.

Stolen from people unable to buy homes? Someone else's house that you wish to own does not make it stolen property from you.

If you purchased a home that someone who had less money wanted is that stolen property?

Can I have your computer, phone and your car. I don't have any money but you having something I want means you stole it.

Re: Canada to ban foreigners from buying homes

#234

Post by AzzieElbab » Thu, Apr 07, 2022, 6:33 PM UTC

empressplay wrote: post #166

AzzieElbab wrote: post #121

Earlier quoted context omitted.

I think people are missing the fact that for many Canadians values of their homes represent their live savings. So while homeownership remains high in Canada doing something substantial about re prices would ruin peoples lives.

Actually no, because you still need a place to live. So it doesn't really matter if your home is worth $!M or $100K because it would cost you the same to move somewhere else. As such reducing home prices across the board isn't that problematic, because there's no loss in 'value'. You can still sell your apartment in Vancouver and buy a 5-bedroom in Saskatoon. The issue becomes people with existing outstanding mortgag…

Most common scenario is to sell your Toronto home for 2m and retire to a 500k condo in Florida. And no, neither banks nor government would absorb the delta between mortgage value and current property evaluation. Banks are probably covered by some form of government insurance which people would have to pay up through taxes

Re: Canada to ban foreigners from buying homes

#235

Post by gregable » Thu, Apr 07, 2022, 6:33 PM UTC

bryanlarsen wrote: post #73

incomingpain wrote: post #61

The data is public, less than 5% of homes are going to foreigners. Don't see how they even accomplish banning foreigners when there are free trade and free investment agreements. The problem is that bonds have negative yields. Retirement funds are forced into buying real estate, because housing is a safe investment right? The federal government knows this and knows they can't do anything. If they targeted retirement…

Price is set at the margin, especially in such an inelastic market as housing. "supply 100, demand 99, price goes down. Supply 100, deman 101, price goes up." 5% isn't a lot, but it could have a disproportionate impact. Housing isn't a federal responsibility, so the provinces are more to blame for the crisis. Ontario just totally whiffed implementing a report on how to reduce housing costs, so I expect the problem to…

The demand for the housing drives the price, modulo short-term speculation. The investor buys it with an eye towards the cash-flow from renting, and by definition, it's rented to someone living there.

Re: Canada to ban foreigners from buying homes

#236

Post by davidw » Thu, Apr 07, 2022, 6:35 PM UTC

llbeansandrice wrote: post #226

davidw wrote: post #140

Earlier quoted context omitted.

> massive investments made by hedge funds, private capital, REITs I can't recommend this article enough on that subject: https://www.vox.com/22524829/wall-street-housing-market-blac... "The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that ar…

I feel like both of these things can be problems. If you view housing and ownership of your domicile as something that should be accessible to people, then housing necessarily cannot be viewed as an investment vehicle and large corporations, REITs, wallstreet, etc. need to be excluded so that more supply can be available to "correct" buyers. Limiting these groups does help on the supply-side. While it may not be the…

I don't think many people are really in favor of big investors getting into housing because no, it sure does not help, but the root cause is "not enough homes", and the solution is "build more homes of all shapes and sizes". That's also the solution to keeping big investors out! Big investors aren't piling into used cars despite the recent scarcity because they know that sooner or later the car companies are going to go back to churning out a bunch of new cars.

You're quite correct that more money chasing after the same limited number of homes is just going to drive up prices.

Re: Canada to ban foreigners from buying homes

#237

Post by CountSessine » Thu, Apr 07, 2022, 6:35 PM UTC

LimaBearz wrote: post #212

CountSessine wrote: post #174

Earlier quoted context omitted.

You're fighting scarcity. You still won't win the bidding war - it just won't be as one-sided. Stop championing scarcity by blaming scapegoats. Either we limit Canada's crazy-high immigration rate (1% of population every year) or we build more homes which is mostly gated by illiberal zoning laws passed by municipalities. But both of these policies are very popular so you'll be swimming upstream, politically. While yo…

Is it so far fetched to assume some realtors may be juicing the bidding to increase their own commission and to make their firm more uhh "prestigious" by being able to drive up the price for their own marketing purposes further down the line. Likewise if you dont know who you're bidding against, how do you even know the bidder is even real (foreign or not)? Transparency is good thing. While there may be some "scarcit…

Is it so far fetched to assume some realtors may be juicing the bidding to...

Of course not, and I didn't say that I'm completely against reforming the real estate industry and the bidding process. But it won't fix expensive housing.

It's all bullsh*t if it doesn't address scarcity. In 2016 we had had 10 years of 2% population growth in Vancouver and 1.2% housing stock growth and we wanted to blame foreign investors, so we enacted the foreign-buyers tax. That was going to fix high housing prices.

In 2017 we all got angry about dirty money and our casinos being used as money-laundromats so we commissioned the German report to detail what was going on and surely that would show that real estate was expensive because of money-laundering. It said prices might have gone up by 6% because of money-laundering. So that's 6% of 400%.

In 2021 we started talking about investors driving up the cost of housing, ignoring the fact that investors typically become landlords and in cities with rental vacancy rates hovering around 1% (Vancouver's was 0.4% in 2017!!!), that sounds like a good thing.

It's all bullsh*t and it's all a distraction that let's us ignore scarcity. I've decided that no matter how justified that housing reform is (ie open-bidding), I refuse to support it before we deal with scarcity because we'll deal with open-bidding and then say, "Ok ... let's see where we are in 3 years time now that we've fixed that!"

Deal with scarcity or f*ck off with talk about housing prices. Don't expect me to validate your cognitive dissonance.

Re: Canada to ban foreigners from buying homes

#238

Post by VincentEvans » Thu, Apr 07, 2022, 6:35 PM UTC

ericmay wrote: post #55

VincentEvans wrote: post #7

I don’t know the specifics on Canadian real estate market and the specifics of the problems there, but based on my understanding of the problems facing your neighbors to the south - I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds,…

> I don’t know the specifics on Canadian real estate market and the specifics of the problems there, but based on my understanding of the problems facing your neighbors to the south - I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds…

> Can you not do this and also seek to identify hedge funds, private capital, REITs, and other entities which may be more difficult to regulate at a later time? Maybe this first piece of legislation is the quick win?

You can, and I specifically pointed out that I generally agree with what is being proposed, and certainly hope that it isn’t an attempt at diversion by throwing out the usual scapegoat.

Re: Canada to ban foreigners from buying homes

#239

Post by wnolens » Thu, Apr 07, 2022, 6:35 PM UTC

CPLX wrote: post #111

dsnr wrote: post #25

Earlier quoted context omitted.

This is not really guaranteed to solve the problem. It will only be a part of the solution. In many countries, including Europe, new properties are quickly snatched by investment companies that have much easier access to capital than private individuals and can easily afford to pay above market prices. People shouldn’t really have to compete with companies or “investors” on the housing market.

It shouldn't matter all that much. Rented homes are an excellent (not perfect but very close) substitute for purchased homes. People don't like to rent because of instability or unpredictability of pricing. But a large and growing long term rental market where it's straightforward to find a new place and nobody has an incentive to kick you out or raise your rent is really just fine. You might be thinking, right but i…

I like the conclusion, but I've created some elaborate financial models to compare buying versus renting (+ investing the difference in S&P500). And so have a few very intelligent friends.

It almost NEVER works out in favor of buying except for some crazy flukes like pandemic accelerating prices in Toronto.

I think it's largely cultural? Canadian's (more than any of my American friends) are fed the idea that owning a home is the best financial decision and the holy grail of life. It may happen to be the best financial decision for them, but because they lack the information that it's not and wouldn't otherwise invest very well.

Even in spite of that information, I still want to spend money and buy a house. I've been asked for vacate my apt for property sale more than once, and faced +800/mo rent spike (NYC...), and I'm over it.

Re: Canada to ban foreigners from buying homes

#240

Post by dj_mc_merlin » Thu, Apr 07, 2022, 6:37 PM UTC

> The foreign-buyer ban won’t apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the person said.

Not sure if HN or OP removed the "some" in the title. It is quite important here, since the average foreigner in Canada is unlikely to be impacted directly.