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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]

#271

Approximate M2 growth since the start of 2020: USA: 33% Canada: 23% UK: 17% Euro Area: 15% China: 15% Japan: 13% WhERe iS aLL thE MOney ComInG fRoM guYS?

Not only that, but those governments also subsidize things like 30 year fixed rate mortgages with government guarantees.

So not only is there more money burning a hole in people's pockets, the artificially low rates create massive leverage.

I wager that if home buyers had to convince private hard-money lenders to give them 30 year mortgages the rates may increase. (Imagine if houses were denominated in gold)

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

#272

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…

There is no physical limit to the amount of houses. The best way to fix this in the long term is to flood the market with new housing inventory.

We need to remove restrictions and make it easy to build new high-density housing anywhere and everywhere.

The wealthy have the capital to find loopholes in any tax that is levied.

We need to punish the housing speculators with a supply surge.

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

#273

Earlier quoted context omitted.

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.

I’ll bite: what’s the simple solution?

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

#274

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…

That is exactly why I am against “point based” immigration whatever that means. It essentially translates to saying we only bring in wealthy immigrants. Both Canada and NZ have similar problems, their point based immigration system disproportionately favor more financially well off class of people, in many cases the investor class loophole basically allows to buy citizenship. Add to that the number of immigrants is federally controlled, the government has no say in where the incoming immigrants settle which in many cases end up being big cities such as Toronto or Vancouver.

And then the international student visa scheme. Many universities basically use them as their lifeline. Concordia University in Montreal for example has over 50% of their registered students being international.

I am in much more favour of the old system where the applicant applies through a provincial (state) immigration and each state gets to set their quota. Once approved the immigrant has to settle in the province they apply for and live there for certain number of years. This allowed even distribution and not put pressure on already tight housing supply in major big cities such as Toronto. But the federal government in Canada in 2015 removed this provincial cap and instead introduced a point based lottery system where both the lottery cap and applicant selection through point score threshold is done by the federal government.

EDIT: Also the point based system allows abuse in countries where we’ll connected people can basically buy “accredited” credentials such as relevant accredited experience in professions. I know someone who doesn’t know a thing about welding, but they moved here with credentials. Government has no way to verify these accreditation in many cases for many countries.

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

#275
Note, the post is an interview with the head of Transparency International, who got data from 1.4 million transactions from the main land and mortgate registries in Ontario.

The article isn't just some opinion about "foreign buyers," with racist undertones, there is a real pattern and data.

They found Toronto matches matches markets around the world that real estate is being bought by companies, with cash, and through unregulated lenders. Given their general agenda, they have conflated holding companies with all foreign companies, and they are suspicious of private enterprise in general, but as a stopped clock they appear right on this issue.

Their transparency issue is real money laundering for a change instead of capital flight, and even though I don't care much for their usual agenda, for them to criticize the housing market in Canada is accurate.

Casual BBQ conversations in Toronto are as likely to be about real estate prices as they are to talk about how many of the neighbourhood businesses are foreign money laundering operations. It's an open secret, and most milenials are priced out of the cities they grew up in. Not only are investment banks churing real estate (see Blackrock buying homes search) with Fed driven liquidity, Canada's political parties forfeited their national focus, and instead spend their time courting foreign leaders and their diaspora networks to get dodgy campaign funding sources and voting blocs. The parties realized it's easier to raise money from and pay off constituencies to stay in power in foreign countries to work votes here because there is no transparency once aid, loans, financing, and other money vehicles leave the country.

The logic appears to be, "why should our globally elite and governing classes be subject to the opinions of working class people we disagree with in these mere nations when we can just import people and money dependent on our policies, both from educated and wealthy and poor dependent classes, and then manage them to keep us power." It's post-national policy. The parties run offense by calling everyone they disagree with racists, and the whole thing is absolutely rotten. A big part of that is attracting capital flight from other countries into assets like real estate and lax beneficial owner enforcement and turning a blind eye to it in return for political support.

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

#276

So many saying it's a supply issue... If it's a supply issue, more people would be homeless and without a place to live. It's an affordability issue with a small portion of 'housing investors' pricing out renters from ever buying.

Higher supply would mean lower prices. By definition affordability issues and supply issues are the same barring some kind of regulatory capture or abuse of credit.

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

#277

Earlier quoted context omitted.

Yes increasing supply will help, and my suggestions encourage increasing supply over turning existing stock into rentals, but if the new supply is all rentals that doesn’t help owner occupiers much. What needs to happen is owner occupiers are given a competitive edge when bidding for a property over a landlord. Hence more taxes and disincentives for buy to let purchasers. So for example a property selling for $1m, wh…

> What needs to happen is owner occupiers are given a competitive edge when bidding for a property over a landlord. Hence more taxes and disincentives for buy to let purchasers. A vibrant rental market is a great thing for many reasons (e.g. look up any study on labour mobility). Not sure why we should have tax advantages for home owners and tax disadvantages for the rental market. It's certainly not equitable to the…

Imagine if it was cheaper to buy a house and service the mortgage on it, than to rent. In such a case, is the rental market still a great thing?

Yes I agree some rentals are necessary given the practical nature of the housing system. But once they become the cause of people being unable to afford to buy their own home it is an issue that needs addressing.

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

#278

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…

There is no physical limit to the amount of houses. The best way to fix this in the long term is to flood the market with new housing inventory. We need to remove restrictions and make it easy to build new high-density housing anywhere and everywhere. The wealthy have the capital to find loopholes in any tax that is levied. We need to punish the housing speculators with a supply surge.

In GTA, there is a limit for single family homes (with yards) that have access to proper public transit. I have no belief an entlightened govt can fix all these factors in my lifetime (wide spread efficient public transit, increased investments in recreational parks, etc.). We have a policy called the greenbelt, which was pitched as an environmental thing but has been at least one factor in this whole mess.

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

#279
post #87

Earlier quoted context omitted.

Did it have any effect? From what I hear, Vancouver has one of the costliest real state markets in Canada

Yes; it's caused several people to leave their empty houses in a permanent state of not-fit-for-inhabitance, which allows one to avoid paying the tax.

Well it does sound like it worked but the problem is that they forgot to apply the tax on all land (even empty land), not just the vacant properties.

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

#280
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 heard a message the other day that there's 3 main vehicles of investment: stocks in companies, bonds in governments, and property (owned mostly by banks and a few rich people). I've been thinking about it ever since, particularly that money usually flows between these 3. The exponential growth required for compound interest to work is only possible in a shortage. Stocks in companies follow a contract-expand busines…

>The exponential growth required for compound interest to work is only possible in a shortage.

Compound interest doesn't need exponential growth. That money is not destroyed when you repay the loan, it's just the profit margin of the banks. If interest rates are above what can be repaid they will have to be lowered until they can be repaid. The 0% lower bound is good enough. It's when people withhold deposits and never use them to pay for anything (you know as dictated by the responsible citizen always earning more than he spends) that you need endless growth because debts must grow fast enough that past debts can be repaid even at 0% interest.

>I fear the day when companies realise that they'll make more money by starting a war, which would devastate governments and property.

Well, the problem is that it's true. The broken window fallacy isn't about doing something smart it's about doing something smarter than what is being done today.

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