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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]

#301

Post by yunohn »

ecshafer wrote: post #290
yunohn wrote: post #202

Earlier quoted context omitted.

Yes, but you can’t rent out the house you live in. So that means you need to buy multiple houses…

You can rent out rooms in the house you live in, but that is less of a thing now than in the past. In the 1800s/1900s widows, spinsters, old women, that had property would often get by by renting out rooms/beds, essentially being a "mother" to young men or women. Men/women came to the city to work, or school, or whatever and they would rent a room and the landlady would serve meals, do laundry, etc.

Do any of you have some data to back it up or just some anecdotes and stories? The poster claimed this was a tradition and the goal of owning property, so surely there’s some documentation of this being a global phenomenon?

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

#302

Post by closeparen »

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?

This is a cheap sentiment to express. You want righteousness points, specify the system by which you will choose who gets which housing. See if that stands up to scrutiny.

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

#303

Post by Kye »

panzagl wrote: post #295
mistrial9 wrote: post #270

Earlier quoted context omitted.

huh? both Mom and Dad - you lost a great number of people right there.. pulling their supers? over-65 wealth is that common? and this one, really interesting.. "gifting" .. what is that ? I see tooth-and-nail fights over any piece of money in sight among otherwise ordinary relatives.. Mostly Los Angeles SoCal but everywhere in California really.. "gifting" ?!?

Really? Because in places like Colorado and Montana the Californians who sold their parents' house to move there and start their 'lifestyle business' is so old it's beyond a cliché. Maybe substitute 'inherit' for 'gifted'?

Just because something happens often enough to become cliché doesn't mean it's common, representative, or sufficient to move markets. And I've never heard of this, so it might be a noisy but localized thing.

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

#304

Post by jvanderbot »

teruakohatu wrote: post #77
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…

> 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. In 2019-2020 just 38 of this class of visa was approved, which seems to be about the average per year over the last decade. It was just 16 in 2020-2021. I don't think these people are buying decrepit Auckland villas, two bedroom semi-detached or tiny one bedroom ap…

A person having $10m spare to invest, and coming to NZ to invest it, is exactly the kind of person who goes and buys properties to flip or sell or hold as renter-subsidized investment properties.

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

#305

Post by biasedbrain »

opportune wrote: post #299
biasedbrain wrote: post #196

Earlier quoted context omitted.

Where can you get 9% yield on housing? Where I live, you can only buy houses at prices that are above what you can get back in rents. You are very lucky if you can get to 1% yields, which is below inflation and not technically a good investment. The only way it still makes "sense" is by speculating on rising prices for real estate. Which is not risk free at all.

If you buy housing all cash the appreciation and rent (net of expenses) could easily hit 9% per year. If you mortgage it you do pay interest which lowers the yield, but also need to factor in the increase in principal, and that the appreciation is net of your down payment + interest, not the entire sticker price (eg a 10% down purchase of a $1m home financed at 3% that appreciates 6% is actually a 30% yield).

No it doesn't. The interest on the mortgage can be as low as 0.5%, so even if you pay in cash, you would only be at 1,5% yields (with my generous example of achieving 1% yields via the rent).

The "appreciation" is not a given and not risk free at all. Certainly not 9% per year - for how many years do you think that would continue?

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

#306

Post by TedDoesntTalk »

unmole wrote: post #265
TedDoesntTalk wrote: post #134

Earlier quoted context omitted.

There wash a time that home ownership was considered a liability, not an asset (source: “Rich Dad, Poor Dad”.

That's a terrible source.

Why?

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

#307

Post by refurb »

archibaldJ wrote: post #236
refurb wrote: post #219

Earlier quoted context omitted.

Singapore incentivizes home ownership through HBDs to such an extent people think you’re nuts if you don’t buy one. Heavily subsidized units (think $500k for something that would sell privately for $800k-$1M). Constrained supply so prices keep climbing (quite intentional by the govt). 5 year MOP means you can rent it out for a 3-5% yield then buy a private condo. Housing is basically a govt supported investment progr…

I was talking mostly about none-HDB properties like condominiums and landed though. (The cheapest starts at ~$700k.) HDB certainly helps to lower the barrier to entry in home ownership. But I don't think most forms of HDB purchases are investment-orientated. ROI for second-hand HDB is not high and buying a good first-hand one is like winning a lucky draw. I would say HDB is more of the gov's mean to stabilize the hou…

Returns on HDBs, especially with “cash over valuation” offer bigger returns than private properties. Rent it out and the ROI is better than private as well.

HDBs are similar to property in most countries. It’s bought primary as a place to live but also as a store of value. The govt will buy out your HDB for cash in order to fund your CPF. The govt also constrains the supply of HDBs which pushes up values.

But you are right about the lucky draw. Someone people win BTO lottery and make out like bandits with new developments in mature estates.

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

#308

Post by s1artibartfast »

dukeofdoom wrote: post #300

You can always build more houses, start new cities, its not a real problem. But a million dollars brought in, goes directly into the economy from a foreign investor, makes a country rich. Trading something that is low skill to make, into money that can be spent on all kinds of infrastructure and technology. So my only take on this is that how that invest money is spent by that country if its a net positive or negativ…

That really depends on the net flow of cash and how it is used. Housing is bought specifically because it is a good investment with positive returns. This is money that flows back out.

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

#309

Post by spfzero »

renewiltord wrote: post #128
spfzero wrote: post #59

Earlier quoted context omitted.

The prices are not being driven up by buyers with 5% down payments. They are being driven up by 100% cash buyers, people moving cash across national boundaries. Just look at the percentage of "all-cash" offers. That tells the whole story.

Considering that foreigners have to buy new build, how do you reconcile that with your view? What evidence would cause you to think it is not foreigners?

I guess I didn't know that was a law? It's not in the U.S. Foreigners can buy anything they want.

But I don't think the distinction is meaningful, higher new build prices would drag up existing home prices.

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

#310

Post by spfzero »

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…

I don't think it's trivially easy to get money out of the country, so that might be part of it. Another thing is that for many people, being able to buy any real estate is attractive, even when you don't really get to "own" it in the western sense, it's still a lot like ownership (you own it for some number of years then have to give it back IIRC).
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