Billions in 'unknown' funds flowing into Canada's housing market [video] • Hacker News Board

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

#351

Post by 908B64B197 » Fri, Jul 30, 2021, 9:25 PM UTC

hellbannedguy wrote: post #15

judge2020 wrote: post #4

I don't think you need to look far to figure out that foreign cash purchases are coming from... foreign rich people who realize that housing is the best long-term investment possible.

Canada, and the USA, need to make buying our land harder, especially for foreigners. In the USA, all it takes to buy a house is money. A wealthy person sitting anywhere can buy a home with a email, and a few clicks, or a phone call. All it takes is money. If a person can't legally live in the home he bought, why are we selling it to them? I know the answer, but don't like it. I don't know of any other country that ma…

> Canada, and the USA, need to make buying our land harder, especially for foreigners.

Who should be allowed to buy a house: Markus, Swedish born foreigner who moved to America with his wife to work at an academic research lab or Liang, born in Saipan thanks to birth tourism, using the money his parents managed to get out of China to grab as much real estate as he can.

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

#352

Post by boublepop » Fri, Jul 30, 2021, 9:31 PM UTC

It says something about the state of the world that the instant that “state guaranteed wealth increase” became invalidated, the entire worlds elites united to purchase every single residential unit they could to keep profiting of the working class.

World war 3 won’t be fought over natural resources. It’ll be the rent slaves class fighting against the upper classes “right” to keep them in indebted servitude.

We need some policies preventing rent seeking on peoples primary residents.

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

#353

Post by IkmoIkmo » Fri, Jul 30, 2021, 9:32 PM UTC

yardstick wrote: post #277

IkmoIkmo wrote: post #269

Earlier quoted context omitted.

> 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.

> 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?

What I'm trying to say is that if the government is manipulating the market by giving tax advantages to the homeowner market, and tax disadvantages to the rental market, that it's not a good way to spend public funds.

Home ownership is exactly cheaper because it's so subsidised through various ta breaks. That makes renting more expensive vis-a-vis owning, which hurts the class of people who can't rent or has a different preference around life (e.g. more transient, more mobile, less fixed, travel for work, seasonal work etc). Then concluding 'oh owning is cheaper, but it's less accessible, let's give even more tax breaks and stimulus and make renting even more expensive' only exacerbates the problem, it doesn't solve it.

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

#354

Post by closeparen » Fri, Jul 30, 2021, 9:36 PM UTC

toomuchtodo wrote: post #350

closeparen wrote: post #347

Earlier quoted context omitted.

Making housing stagnant and expensive is a popular initiative waged against capital.

Ahh, but you can make housing accessible without making it expensive, using policy. People have rights, capital does not.

Aren't you usually the first to point out how people who don't currently own houses somewhere, don't have rights?

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

#355

Post by IkmoIkmo » Fri, Jul 30, 2021, 9:43 PM UTC

dukeyukey wrote: post #318

IkmoIkmo wrote: post #268

Earlier quoted context omitted.

These investors want tenants. The more supply, the more (ceteris paribus) rents drop. The more rents drop, the lower the rates of return on the home, meaning the asset is worth less and prices drop for those buying homes, too. Supply leads to lower rents and prices. There's no magic way around these economic laws. Of course if demand grows faster, then prices still go up. But in absence of supply increases it'd be ev…

> These investors want tenants Not necessarily. By the UK Government's own estimate [1], 1-in-20 homes in West and Central London (the more expensive parts) are empty. The story I've heard is owners who use them as a store of wealth safe from their own government's hands (usually Russia, China, or places in the Middle East). They prefer not to have tenants because it adds risk and complexity. I'm not saying this is t…

It's a fair point that there's some buying for store of wealth, but if that's the problem, address it, not something else. Amsterdam (my city) for example fines for homes left empty, either you live there, rent it out, or get fined. It should be quite easy to set penalties such that the incentive flips. There's plenty of property management + insurance products, to make the task of renting out carefree and riskfree compared to leaving it empty and paying fines.

But beyond that I find it's a minor problem that gets broad attention in the media. There've been lots of studies around vacancies, but they usually don't amount to anything close to the media narrative.

For example, most real estate investors discount their expected rental income by 10% for expected vacancy, because they know tenants come and go, it takes time to find/review/place new tenants, some tenants fall through, and sometimes there's a no alignment between a tenant leaving and a tenant being available on short-term. 8 or 10% is a very standard industry figure people often use for quick calculations. In the US I think the average is about 7% for example.

Now if you find that 1 in 20 homes, in a particular high-class area known for vacancy, of a particular city known for this problem discussed intensively in media/politics, are vacant... that's entirely within normal parameters. That's 5%, and supposedly it's the most incendiary piece of data they could find.

In other words, quite normal figures that have a straightforward solution (>3 or >6 month vacancy leads to hefty pentalties/fines/taxes). I'm not saying the problem is completely non-existent, but it's not that big a deal as people often think and repeat.

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

#356

Post by toomuchtodo » Fri, Jul 30, 2021, 9:47 PM UTC

closeparen wrote: post #354

toomuchtodo wrote: post #350

Earlier quoted context omitted.

Ahh, but you can make housing accessible without making it expensive, using policy. People have rights, capital does not.

Aren't you usually the first to point out how people who don't currently own houses somewhere, don't have rights?

I point out the observation of current state, absolutely. I also believe in and contribute to progressive policies and candidates (respectively) who will hopefully improve the situation through policy. Please don’t interpret my analysis and understanding of a system as an endorsement of it. What is the point of property and capital if the outcome is dystopian and feudal?

Both people and systems are complex and not boiled down to binaries. Thanks for getting to know me a bit more!

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

#357

Post by closeparen » Fri, Jul 30, 2021, 9:57 PM UTC

toomuchtodo wrote: post #356

closeparen wrote: post #354

Earlier quoted context omitted.

Aren't you usually the first to point out how people who don't currently own houses somewhere, don't have rights?

I point out the observation of current state, absolutely. I also believe in and contribute to progressive policies and candidates (respectively) who will hopefully improve the situation through policy. Please don’t interpret my analysis and understanding of a system as an endorsement of it. What is the point of property and capital if the outcome is dystopian and feudal? Both people and systems are complex and not bo…

That’s fair, I apologize for misattributing your position.

I just can’t shake the perception that the more power there is in local, bottoms up, grassroots democracy, the less housing (and transit, and everything else) there will be. Seems like we only got what we have because communities weren’t empowered enough, back then, to hold back capital.

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

#358

Post by kenned3 » Fri, Jul 30, 2021, 10:23 PM UTC

mymythisisthis wrote: post #267

yardstick wrote: post #160

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…

I'm from Ontario, Canada. I find that it's average people getting into the real estate game as a way of protecting their wealth against inflation and not wanting to play the stock market. People blame internation investors, but that is only a small problem. People say we should build more homes, but Ontario already has 10s of thousands of approved homes to build, that have not yet been started. Lack of skilled trades…

I'm also from Ontario.. I dont think this is the issue at all.

These stories are not referring to "growth in Ontario" but unoccupied multi-million dollar homes in Vancouver with questionable ownership, and paid in cash.

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

#359

Post by syshum » Fri, Jul 30, 2021, 10:37 PM UTC

voisin wrote: post #189

syshum wrote: post #182

Earlier quoted context omitted.

Historically the price of the Average Home should be about 2x average household annual income. We are way off that good median today, so either prices have to fall or incomes have to go up. However the causes of this can not be simply explained away by "people buying dozens of apartments and houses just to rent them" the reality is far more complicated than that. even if you put a ban or cap on the number of rentals…

> Historically the price of the Average Home should be about 2x average household annual income. Source? I have heard many boomers talk about how the advice was to pay no more than 4x income. Obviously highly unlikely in this day and age.

I don't know the original source, but it fairly common financial advice. Here is one source [1] but a simple DuckDuckGo search or Google Search will show many others. Some are starting to recommended 3-4x due to low interest which as I said in other comments I do not agree with.

[1] https://www.investopedia.com/articles/pf/05/030905.asp

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

#360

Post by syshum » Fri, Jul 30, 2021, 10:43 PM UTC

nemo44x wrote: post #287

syshum wrote: post #282

Earlier quoted context omitted.

There is a big difference between saying "Rates can stay this low" when they are 12% during a time when the government was not printing money, nor in the housing market so mortgage has to actually be profitable for the lenders and a time when the fed is literally printing money and giving it away for 0% interest to institutions with the sole purpose of driving up costs so consumer confidence does not collapse... I wi…

So I do wonder where the equilibrium is between inflation and raising interest rates. That is, inflation gets to a point where homes double in dollar value over a few years but interest rates go much higher creating a situation where anyone with an existing, low rate mortgage is making pretty easy payments (due to inflation and therefore wage inflation) but the real value of their house hasn't really gone up in value…

> low rate mortgage is making pretty easy payments (due to inflation and therefore wage inflation) but the real value of their house hasn't really gone up in value due to that same inflation.

Situations like this are not always bad... This generally will lead to more Home Improvement, and people investing in their homes making them better then dumping them on the market. I find that personally to be better for society instead of letting whole neighborhoods die due to people letting properties run down then moving when the maintenance gets to expensive.

Also inflation does not always track wages. Especially for the middle class. We are seeing that right now in some sectors, where skilled labor rates are more or less flat for the last few years (when adjusted for current inflation may even be dropping) however unskilled labor has seen pretty significant gains recently.