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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

#271

Post by wnolens »

pembrook wrote: post #130

A quick look at the data suggests only about 2% of properties in Toronto and Vancouver are owned by overseas investors. Yes, housing is priced at the margin, but this won't do anything at all to prices over the long term. I'm sure this will be wildly popular politically, because people LOVE the idea that some foreign boogieman is the reason their children can't afford homes anymore. It's much easier to outsource your…

I'd love to see what the numbers are when you follow the capital and not just 'ownership'. There's a lot of ways around this ban.

I don't think it's a boogieman. But I also don't think it will change much when these cities are primarily 2-story houses.

If this stops some amount of cash offers 20+% over asking by foreign investors who have no intention of living in it - great. There's a hundred factors affecting this real estate crisis, it might need a hundred solutions.

Re: Canada bans foreign home buyers for two years

#272

Post by alistairSH »

jejeyyy77 wrote: post #238
pards wrote: post #98

I'm a homeowner in Toronto and I don't think this will help. They've eliminated a small number of buyers from the market but have added other incentives like a first home buyers tax credit that will only fuel the fire - Australia tried this with tragic results. >> working with provinces and territories to develop and implement a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding. Blind…

I disagree. IMO, blind bidding is suppressing prices not inflating them. Here’s why, as someone who has been on the ground and lost a few offers because we didn’t want to overbid. After the sold price was released, on multiple occasions we thought “damn! we’d have our that and $25K on top to get it had we known”. In a blind bidding system, you bid what you think the house is worth. In an open bidding system you start…

You say that, but the fact you didn't bid $25k+ initially tells us otherwise, no?

Here in DC metro, people are massively over-bidding (relative to list price) because they've already bid/lost 5-10 homes in the last few months. So, they go in strong, $100-$150k over on a $600k list price isn't uncommon right now.

Re: Canada bans foreign home buyers for two years

#273

Post by boplicity »

TimPC wrote: post #211
boplicity wrote: post #195

Earlier quoted context omitted.

I live in Toronto as well. We make a good income, have large savings for a down payment, and recently thought about buying a house. It's depressing. So, I decided to look at the City Plan -- to see what the actual plan is for addressing the housing cost crisis in Toronto. Not surprisingly, the real problem became very clear to me, almost immediately. The problem is not blind bidding. The problem is not foreign buyers…

Some of it is NIMBY. But the officials can’t change the fact that there is only so much land to go around and a disproportionate number of people strongly desire a detached house. Building huge quantities of condos may help some with density and may drive prices down slightly but there is little that can be done to have new detached houses on the market. You could potentially tear down some mansions in rich neighborh…

> But the officials can’t change the fact that there is only so much land to go around and a disproportionate number of people strongly desire a detached house.

That may be true, but the housing cost crisis extends beyond detached houses. We need more apartments, condos, townhouses, etc. Not just nice detached houses. Prices should get lower in all of those categories. Even condos in towers have grown much, much more expensive.

> You could potentially tear down some mansions in rich neighborhoods to build two or three houses and that might help slightly at the margins.

Most of the land in Toronto is tied up with single family detached housing. Why not replace some of these with small apartment buildings, brownstones, and townhouses especially when near transit, or villages? I live in a large house that is a 10 minute walk to transit and two major strips of retail. This neighborhood is mostly detached houses and duplexes. Why not allow for double, triple, or quadruple the density with townhouses or small apartment buildings? If done at scale, across the city, this could absolutely make a huge difference, in terms of the availability of housing.

In terms of mansions, why not spend a few hours walking around Forest Hill. You'll probably need more time, though, if you want to see them all. It's a beautiful neighborhood. And very large.

> The problem is a handful of cities are winners and everywhere else is losing.

There are other nice cities that are growing -- and the housing prices are growing exponentially there as well. (For example, Waterloo and Victoria.) Everywhere else is definitely not losing, though I agree that there should be more thriving cities in Canada, that is also a daunting task. Frankly, it's also a lot more daunting than changing the zoning to allow for medium density in single-family neighborhoods.

The bottom line, though, is that you're right about what officials can't change. They can't change the amount of land available, but they certainly can and should change the amount of development that is allowed on it. The current plan is simply not working. Something needs to change. My proposal is to allow medium density development; I don't see a better alternative.

Re: Canada bans foreign home buyers for two years

#274

Post by FerociousTimes »

pards wrote: post #98

I'm a homeowner in Toronto and I don't think this will help. They've eliminated a small number of buyers from the market but have added other incentives like a first home buyers tax credit that will only fuel the fire - Australia tried this with tragic results. >> working with provinces and territories to develop and implement a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding. Blind…

Yes, this is a political move to appeal to the electorate for window dressing and not based on merits or practical and well-thought considerations.

"Hey, we banned those darned foreigners just for you, can we get some love now at the ballot box?

xoxo"

Re: Canada bans foreign home buyers for two years

#275

Post by the_only_law »

tici_88 wrote: post #34

Foreigners, especially the billionaire type, can and have been setting up shell corporations through which to purchase Canadian real estate. The proposed measure will do nothing to stop this practice. The measures proposed by the Canadian government are likely just political posturing and indented to "pull the wool over the eyes" of Canadian voters because the housing bubble/crisis has reached epic proportions and ev…

> The measures proposed by the Canadian government are likely just political posturing and indented to "pull the wool over the eyes" of Canadian voters because the housing bubble/crisis has reached epic proportions and everyone is talking about it.

Politics, particularly here in the west, is beginning to feel like exclusively this to me.

Re: Canada bans foreign home buyers for two years

#276

Post by car_analogy »

NamTaf wrote: post #255
michaelje wrote: post #154

Earlier quoted context omitted.

>> Australia tried this with tragic results Australian living in Canada here - unsure what the tragic results were? It’s helped a number of my friends buy their first home - with a small (~$10k) credit /reduced stamp duties and taxes on the first home owned and lived in (ie not an investment). Negative gearing has been far more impactful in increasing the cost of housing, with people buying multiple homes for investm…

It’s largely understood (I am in a pub halfway across the world and have no specific citation) that the FHBG just bumped the purchase price up by that amount. In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity (in that, few limit themselves to less), and many FHBs are competing against each other for a similar cross-section of the market, so grants are easily absorbed by…

> In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity

That's the wonderful part about lending - it's an arms race, where the lender always wins.

Re: Canada bans foreign home buyers for two years

#277

Post by alistairSH »

hallway_monitor wrote: post #110
pards wrote: post #98

I'm a homeowner in Toronto and I don't think this will help. They've eliminated a small number of buyers from the market but have added other incentives like a first home buyers tax credit that will only fuel the fire - Australia tried this with tragic results. >> working with provinces and territories to develop and implement a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding. Blind…

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.

It actually does happen in the US, but the only place I've seen it is bank or county/town auctions, where the house was either taken by the bank for non-payment or taken by the town to cover past taxes.

Re: Canada bans foreign home buyers for two years

#278

Post by libertine »

cle wrote: post #257
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?

As a renter, I preferred to rent from a corporation with predictable, reliable property management. I preferred living in apartments for exactly this reason. Houses managed by individuals were always way more annoying due to hit-or-miss management issues. (I agree that corporations hoarding housing is a problem...but they do bring value in some specific areas, even if net value is negative.)

I don't have a problem with corporation managing properties. That's not the problem. For me people could even pay a premium if they want that assurance.

The problem seems to boil down to access to money and the destruction it causes, simply because we play by different sets of rules.

Housing used to be an asset class that was accessible to people, apparently it's a matter of time before it'll be yet another asset limited to a few bunch. They simply have to drive the prices up enough, and outbid people, which is whats happening.

So you have to level the playing field by giving everyone the same type of access to cash, or you make hoarding houses more expensive to the point of being unsustainable.

Re: Canada bans foreign home buyers for two years

#279

Post by 3qz »

seandoe wrote: post #260
jejeyyy77 wrote: post #238

Earlier quoted context omitted.

I disagree. IMO, blind bidding is suppressing prices not inflating them. Here’s why, as someone who has been on the ground and lost a few offers because we didn’t want to overbid. After the sold price was released, on multiple occasions we thought “damn! we’d have our that and $25K on top to get it had we known”. In a blind bidding system, you bid what you think the house is worth. In an open bidding system you start…

That doesn't make sense. If you really bid what it was worth to you, why were you disappointed that the house went for more because you would have paid it (and more)?

“what it’s worth” is just the maximum you can possibly afford when the alternative is never owning anything.

Re: Canada bans foreign home buyers for two years

#280

Post by collegeburner »

NamTaf wrote: post #255
michaelje wrote: post #154

Earlier quoted context omitted.

>> Australia tried this with tragic results Australian living in Canada here - unsure what the tragic results were? It’s helped a number of my friends buy their first home - with a small (~$10k) credit /reduced stamp duties and taxes on the first home owned and lived in (ie not an investment). Negative gearing has been far more impactful in increasing the cost of housing, with people buying multiple homes for investm…

It’s largely understood (I am in a pub halfway across the world and have no specific citation) that the FHBG just bumped the purchase price up by that amount. In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity (in that, few limit themselves to less), and many FHBs are competing against each other for a similar cross-section of the market, so grants are easily absorbed by…

Yeah this is the same problem we have with college in America: prices keep rising because the government keeps lending more.
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