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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]

#251

Post by brutus1213 »

I think the housing situation in major Canadian cities is so bad, it is going to have clear detrimental outcomes to society. Starter homes in nice (not posh, subway access, good walk score) neighborhoods in Toronto are going for 2-2.5 million. The math on these are bad even if you made a profit on the condo you bought previously (which many people may not have made). The govt has made a series of very half hearted moves to try to quell the swell, but do they really care? Construction and the general housing sector is a major part of our economy now. This is not going to end well :(

I agree with posters who say that foreign buyers are the scapegoat. We need to start taxing real-estate gains on primary residences above a threshold (I thought the US did that). Also, the govt needs to take serious measures to break the assumption that housing always goes up double digits. Everyone I know thinks housing will go up .. this sounds like a recipe for collapse. People with little means are going all in on the most expensive real-estate they can find. Illegal suites (rooms for rent, basements) are rampant. The sort of side hustle I hear about are insane (someone boasted growing shrimp in their garage to supplement income).

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

#252

Post by imtringued »

yardstick wrote: post #160
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’ve talked with a friend in NZ who have recently purchased 5 houses all to rent, all have mortgages, and none in expensive cities (think South Island outside CHCH and Queenstown). They work full time in Auckland in a business they run. The housing crisis has been this way since at least 2000 or so. It won’t change until: - Stamp duty for buying rentals / converting to rentals, maybe 10-20% - Limit the number of exis…

It's always funny how people come up with increasingly convoluted solutions to a simple problem because they don't want the simple solution. I honestly don't see how this is going to solve the problem. You're just making it harder to express the problem but it is still there.

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

#253

Post by monkeynotes »

obiwanpallav1 wrote: post #38

This[1] video by ColdFusion talks about a similar problem in the US in which Housing market is now being seen as the next big bet by the Wall Street Firms. In this scheme, a common man will not be able to buy/own any house but they can only rent it. It will be very similar to SaaS model in which Houses will be provided as a service. 1 - https://www.youtube.com/watch?v=gu4tC3px6mc

Those same waters are being tested in Canada too: https://www.cbc.ca/news/business/core-home-ownership-column-...

It's very depressing to see all the ways that society is breaking down.

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

#254

Post by monkeynotes »

RandomWorker wrote: post #14

Home owners will be happy to hear this. Not yet home owners like me are screwed because rents to damn high and I can’t afford to save up for a down payment. Sorry bud.

It's not good for home owners at all. As property prices go up my property taxes also go up, but my salary does not. It's not like I can sell up and make a pile of cash, I'd have nowhere to live or have to buy again in the same market. And worse, if you buy into this hot market and then inflation crushes it with rising interest rates then I risk being underwater and looking at refinancing with numbers that I can barely afford.

The market is fantastic for investors though. A property portfolio delivering 30% growth in a couple of years whilst also grabbing sky high rents or AirBnB sure looks tempting. It's a good time to start a disruptive turnkey property management business.

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

#255

Post by k2enemy »

wuschel wrote: post #111
cheesecake_luvr wrote: post #54

Earlier quoted context omitted.

Overseas buyers just get permanent residency and citizenship and buy houses. A few years ago you just needed ~$NZ5m invested in the country and you get permanent residency. There is no way the prices are driven by domestic money. My factory supervisor brother has a house in Mangere Bridge, a blue-collar suburb, built for ~$100k 20 years ago is now well over $1m. It is batshit crazy. I hear of eye-watering prices in M…

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?

This is speculation on my part, but I think the wealth transfer from the baby boomer generation to their kids is playing a part. I've seen estimates ranging from $30 to $70 trillion to be passed down.

At least anecdotally (in the United States) I have many friends in their 30s-40s that are buying new homes with money from their parents. Or their parents buy the home and they live in it.

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

#256

Post by netheril96 »

Beijing has the strictest restriction on property purchase in the world. Its property prices had been declining for two years before 2020. It has had no new policies regarding real estate and loans since 2017. Yet its property prices has been rising since 2020, several months after the infinite QE the US starts.

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

#257

Post by bravo22 »

brutus1213 wrote: post #251

I think the housing situation in major Canadian cities is so bad, it is going to have clear detrimental outcomes to society. Starter homes in nice (not posh, subway access, good walk score) neighborhoods in Toronto are going for 2-2.5 million. The math on these are bad even if you made a profit on the condo you bought previously (which many people may not have made). The govt has made a series of very half hearted mo…

Taxing gains on sales of primary homes just leads to fewer homes for sale and higher prices. The only thing that correlates with the price change is months of available inventory in the market.

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

#258

Post by imtringued »

pkorzeniewski wrote: post #168
tolbish wrote: post #3

Should housing be a primary vehicle for investment and the de facto way of making money? Or should it serve as a necessity and basic aspect of life?

I'm disgusted by the whole real estate market, people buying dozens of apartments and houses just to rent them - and hence increasing prices for people who just want something on their own instead of making rich people richer - is destructive for society, especially for young people. Owning a roof over your head shouldn't require an average person to work their ass for half of their lives.

I don't see how buying apartments and renting them out makes housing more expensive.

I'm the exact opposite. All these emotional people don't make sense.

From my perspective there is a whole bunch of emotional people that wants expensive housing and they complain when someone else i.e. landlords benefit from the thing they wanted. I can't stand the double standard.

The problem has never been properties. Just think about how illogical it is for a house to go up in value even though it is a depreciating asset. It's the land that is going up in value. Expensive land needs expensive rents.

Why is land expensive? Because of all land owners, not just the ones that are renting dozen apartments on land that could at most fit 2 single family homes. Yes, the average home owner is rent seeking just as much as that landlord with 12 apartments is doing.

The worst part is those home owners don't actually want their windfall because they want to live in their home. They do not want the liability of increasing property taxes as their land goes up in value. They'll vote for tax freezes and lower taxes which obviously makes it easier for homeowners and landlords to earn money at the expense of other people.

You know, if there were no owner occupiers and everyone was renting then people would just vote for increased property taxes on landowners to make land a liablity which lowers its value.

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

#259

Post by wila »

seanmcdirmid wrote: post #103
spfzero wrote: post #63

Earlier quoted context omitted.

Western real estate is the new gold. It's protected by the entrenched lawful property rights of western countries, so money made in countries without those rights are going to flow in. Think about it. If you had made a few million based on your having positional power in a country where you would be jailed or killed once people found out what you had been doing, you'd get the money out to somewhere your descendants w…

> Western real estate is the new gold. If you think western real estate is nuts, Chinese real estate is even crazier. Those Wenzhou house wives supposedly got started locally moving onto the rest of China and now the western world. It’s probably way more complex than that, however. > If you had made a few million based on your having positional power in a country where you would be jailed or killed once people found…

It's easier to put the blame elsewhere than to look at your own failing systems.

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

#260

Post by lepton »

itsoktocry wrote: post #242
Mandatum wrote: post #98

Earlier quoted context omitted.

Yes. They sold their last house for $1.4M. They bought it for $400K 12 years ago. They've never had a job that earned them more than $100K. They have just bought something else for $1.5M which needs $200K spent to get it to how they want it (renovating bathrooms, kitchen, etc).

> They have just bought something else for $1.5M which needs $200K spent to get it to how they want it (renovating bathrooms, kitchen, etc). They are putting $200k into an asset which is already 10x+ their income? Ouch. I can't wrap my head around a financial decision like that.

By "income", parent is referring to employment income. But their true income is the real estate investment of their primary residence, which nearly doubles their income.

They are borrowing $300k I guess (1.5m + 0.2m, less 1.4m), and will likely sell their new house for far more than $1.5m when they sell again in another dozen years.

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