311–320 of 417 posts
The issue is not new. I am of East Asian heritage and live in Canada. Several people asked me causally why I went to school and had a regular job. They explained that with the "Chinese money" I should not compete for jobs with folks who really needed the money. Smh...
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Asserting that housing—or any basic necessity—shouldn’t be an investment is a dangerously naive stance that flies in the face of economic reality and human history. Consider food, water, healthcare—all necessities, yet all benefit from private investment and innovation. The collectivist dream to strip away the investment aspect of housing is a recipe for disaster, leading to shortages, degradation, and inefficiency.…
Ah yes, who would want to trade the flourishing real estate utopia of, say, San Francisco for the collectivist hellscapes of New York (some rent stabilization and public housing), Vienna (>50% public housing, consistently scores top in overall quality of life globally), or Singapore (>70% public housing)? Free markets are great, until they start incentivizing weird behaviors (NIMBYism, bubbles) instead of investments…
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This is somewhat counterintuitive but... the fraudulent mortgages are not more risky, they are often times more stable than other local borrowers. I think what many people are imagining is the subprime mortgage situation of yore. But in this case, a lot of the "fraud" is the result of knock on effects from capital controls in the PRC. Many (new and aspiring immigrants) have capital from sales of their property in Chi…
> the fraudulent mortgages are not more risky, they are often times more stable than other local borrowers You don't know. The paperwork's fraudulent. > Many (new and aspiring immigrants) have capital from sales of their property in China, but due to capital controls, cannot get it out quickly The Chinese property market is in freefall. And capital controls can get tightened. Either condition will result in default.
They don't offer these services to anyone. Because the paperwork is fraudulent, a lot of people involved are/will be personally implicated (could easily lose their job and/or face legal challenges on top) in the scheme. It's not like banks are not monitoring delinquency/default rates already, and if the stats are start indicating problems they will certainly investigate...
So while outside observers can't verify anything, those perpetrating the scheme do have to balance their own personal risk and many will in exchange request invasive details around the clients' assets in China to cover their own ass. Not admissible evidence to the bank, of course, but they're not handing these out like candy.
> The Chinese property market is in freefall.
Realistically, people involved have already sold so this doesn't affect them. At least in the Vancouver area, the brokers (who are the usual point-of-contact to the clients) won't even proceed unless you've already sold and have the cash.
> And capital controls can get tightened.
This is the main real risk that those in the scheme look out for, but it's a geopolitical risk rather than a market-based one. Which makes more sense when rates are high, like now. When rates were low, this didn't happen as much since there are plenty of clients to go around.
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Also, in the grand scheme of things, even if the bubble bursts, the broader economy is still not worse off. Each cent paid into these mortgages is real "new money" being introduced into the economy. This is not the subprime mortgage days where at the end it became just a transfer of wealth to the banking industry. For the most part "the public" is not the one being defrauded, it's China...
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Ah yes, who would want to trade the flourishing real estate utopia of, say, San Francisco for the collectivist hellscapes of New York (some rent stabilization and public housing), Vienna (>50% public housing, consistently scores top in overall quality of life globally), or Singapore (>70% public housing)? Free markets are great, until they start incentivizing weird behaviors (NIMBYism, bubbles) instead of investments…
This argument mistakenly credits collectivist policies for successes but ignoring the profound negative impacts of state overreach in places like San Francisco. This isn’t about choosing between so-called utopias and hellscapes but recognizing the failure of excessive regulation that stifles supply and inflates costs. Vienna and Singapore are outliers that succeed due to unique governance, cultural attitudes towards…
> Vienna and Singapore are outliers [...]
A model that has to explain away two historically, culturally, and geographically distinct cities as outliers is not very compelling to me.
Again, I'm not proposing that more regulation is always good, but as soon as e.g. long-term residents are massively getting priced out by outside investors or homeowners start opposing new construction exclusively because of the impact on their property value due to an increase in supply (rather than for actual decreased quality of life), the incentives of the free market start drifting apart from those of the people actually living there.
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> The whole country is a gigantic house of cards propped up by real estate, with horrible service quality, terrible healthcare, no jobs, ZERO innovation, risk taking and entrepreneurship. Canada has generally had a more conservative financial industry, which is a large part of why they were able to escape the 2008 mortgage crisis, and that, in turn, has lead to a stronger real estate market. Additionally, the recent…
It's also hard when you're spending money educating your citizens for those high paying tech jobs and over half of them go to the USA [1] [2] [3] [4]. That and lack of venture capital/funding and, I've heard, increased government barriers compared to the USA, reduce the number of local tech companies. The one bright spot in the past decade are the AI hubs in Toronto and Montreal - but they seem to be mainly satellite…
Yes, you are correct that the USA is bigger and has more money than Canada. If you think about it globally (as one should), but it's worth noting that they're not so much moving to the USA as they are specifically the Seattle & Bay Area, and they're doing so at lower rates than for comparable Americans living outside those areas. Also worth noting, for the most part, they aren't founding companies in the US. The pattern is to go to the US, work for large tech companies, and about half return to Canada within 5-10 years, which is when they're more likely to engage in entrepreneurial pursuits.
Just looking at the financial might of Seattle & the Bay Area, it's amazing that 90% of Canada's innovators and entrepreneurs aren't in the US. It suggests that the country is perhaps more supportive of innovation than this narrative being presented.
> That and lack of venture capital/funding and, I've heard, increased government barriers compared to the USA, reduce the number of local tech companies.
The conservative financial system and comparative size of Canada does mean there is much less "free money" flowing around, though as demonstrated from the examples I provided, companies do procure foreign investment, particularly from the US, with comparative ease.
...and while you'll always here entrepreneurs complain about government barriers, having started up companies on both sides of the border, I can tell you that in many ways Canada has comparatively smaller government barriers. In particular, the universal health care and generally more significant social safety net also means that it's a lot easier for prospective entrepreneurs to leave jobs at stable businesses and take on greater risk. It's just one of many ways that while it is harder to get capital in Canada, you don't need as much to get going. This is probably part of the reason that a larger percentage of Canada's labour force (67.7%) [1] is employed by small businesses than the US (46.4%). [2]
AI hubs in Toronto & Montreal are more than just satellite offices for USA companies. You may recall that Geoffrey Hinton, "Godfather of AI", was in Toronto, teaching at U of T, when Google bought the startup he founded with Alex Krizhevsky & Ilya Sutskever... in Toronto. The modern AI revolution traces back to innovative work in... Toronto!
1. https://ised-isde.canada.ca/site/sme-research-statistics/en/...
2. https://advocacy.sba.gov/2023/03/07/frequently-asked-questio....
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You're the only one fixated on race here. The distinction between foreign and local buyers is important to the discussion.
In what way?
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yes, remember it's capitalism doing this, not Chinese, Indian, Canadian or American. hail free market.
This is not an inherent feature of capitalism. This is a failure of the government to create a fair market. This is caused by people that are subverting the rules to out compete the people playing by the rules.
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It's not a matter of if they get paid, it's the unfair advantage this gives in an already competitive market. 2/3 of these properties are probably rented out at inflated prices and the two probably pay the mortgage of the third owners live in. This is a free money glitch, aka fraud.
If the market will bear the rent, why does changing the nationality of the owner improve anything?