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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

#361

Post by randomdata »

BlargMcLarg wrote: post #357
randomdata wrote: post #340

Earlier quoted context omitted.

> Imagine blind bidding when interviewing for a job. Write down the number you'd be willing to do the job for. You've got that relationship backwards. The person doing the job is the seller. They are the ones taking bids. The employer – the buyer – is indeed blind. They don't know who else you are talking to and how much they are offering. If you can convince the employer that the other employer down the street has g…

>The employer – the buyer – is indeed blind. I'd be very surprised if the average employer doesn't have far more information available to them than the average candidate. Especially given that's at least part of HR's role, knowing market salaries and deciding hiring budgets. They might not know about the hiring candidate directly, but more often than not, there are entire B2Bs dedicated to distributing this informati…

> They might not know about the hiring candidate directly

That's what we're talking about. It's not hard to understand overall housing market trends as a housing buyer, but you don't know what a specific seller is going to do with the offers they have on the table. That's where you're blind, just as an employer is blind to what else a candidate has on the table.

If there's a difference, it's that the housing market is hotter (in Canada, at least) than the labour market, so you feel more pressure to buy a particular house when it comes up for sale. If you miss it, you might not find another one for a long time. If, on the other hand, you don't get one employee because you didn't offer enough, you can just wait for the next one that comes along the next day and try again. No big deal.

Re: Canada bans foreign home buyers for two years

#362

Post by throwaway894345 »

manbackharry wrote: post #326
bko wrote: post #217

Earlier quoted context omitted.

The question is why does something like blind bidding exist in real estate? It could exist in all sorts of places but doesn't. Imagine blind bidding when interviewing for a job. Write down the number you'd be willing to do the job for. Someone came in with a lower number, please resubmit. These weird market distortions in real estate have underlying causes. A lot of them are based off patchwork rules and regulations…

I'd argue the main cause of this is the REALTORs/real estate boards/MLS system that stonewalls any attempts at making real estate information publicly available precisely because the size of their paycheques relies on this information remaining hidden from the public. The conflict of interest beggars belief, but it's allowed to remain, among other reasons, since it also tends to benefit political parties courting vot…

What's stopping Canada from increasing its housing stock? Surely Canada has plenty of space for its 30M citizens, right? (Yes, I understand that much of the territory is uninhabitable, but even still...).

Re: Canada bans foreign home buyers for two years

#363

Post by fratlas »

alistairSH wrote: post #281
fratlas wrote: post #244

Earlier quoted context omitted.

A designed process, very efficient at extracting the maximum price out of a stressful situation. It's a sad state of affairs in Australia right now.

But it's an open process. That it's close to optimal efficiency isn't a bad thing. Imagine the same level of stress, but you have to guess what the other buyers are bidding. Do you bid low and hope everybody else does? Bid high, but risk overpaying?

There are new systems to bid online, and over the course of a week. Much less stressful, no emotion and heat of the moment bidding. Nothing wrong with open bidding, all about the techniques used in person.

Re: Canada bans foreign home buyers for two years

#364

Post by convexfunction »

Homes are being used as investments by institutions and nonresidents, in the West broadly, because there's a widespread belief (especially among homeowners) that homes should have a large ROI rather than being more of a consumption good, and so policies have slowly gravitated toward furthering that end -- NIMBYism and restrictive zoning laws, basically, but various other stuff too.

Call me optimistic, but perhaps if more voters appreciated that "homes should be a good investment for the people owning and living in them" and "homes should be a good investment even if you're not living in them" and "the rent should be too damn high forever" all describe basically the same state of affairs, absent exceptionally well-designed policy that makes those not the same state of affairs, we'd see a slow drift over time away from this regressive nonsense.

Re: Canada bans foreign home buyers for two years

#365

Post by foldor »

djrogers wrote: post #339
s1artibartfast wrote: post #313

Earlier quoted context omitted.

The bank won't offer if you can't pay, at least in the US these days. But we have 30 year fixed mortgages, I think Canada is shorter

The norm in Canada is 30 year term, with a variable rate. It's the second part that can really get you...

30 years hasn't been possible in Canada for several years now (thankfully).

Re: Canada bans foreign home buyers for two years

#366

Post by jejeyyy77 »

OJFord wrote: post #359
jejeyyy77 wrote: post #351

Earlier quoted context omitted.

This seems intuitive, but it's wrong. As someone who went through the process, I think blind bidding suppresses prices, not inflate them. When you are making a blind bid, the only information you have is the home itself. The ceiling for your bid is on what you think the house is "worth". You are very conscious about "overpaying" because you have no perspective on what other people are offering. In open bidding, you a…

Well I suppose it depends on bidder mentality, sure, but in that case it's still better - you would have seen & bid the extra $25k and got it (maybe). > In open bidding, you are competing against other offers and the ceiling is basically what you can afford to pay. Well, what someone else can afford (and is willing) to pay. i.e. you never overpay, pretty much by definition. (I think there probably exist 'open' auctio…

Yeah I 100% agree open bidding is better in that it is a more honest and transparent process. I just don't think it will help with prices.

Re: Canada bans foreign home buyers for two years

#367

Post by Pet_Ant »

throwaway894345 wrote: post #362
manbackharry wrote: post #326

Earlier quoted context omitted.

I'd argue the main cause of this is the REALTORs/real estate boards/MLS system that stonewalls any attempts at making real estate information publicly available precisely because the size of their paycheques relies on this information remaining hidden from the public. The conflict of interest beggars belief, but it's allowed to remain, among other reasons, since it also tends to benefit political parties courting vot…

What's stopping Canada from increasing its housing stock? Surely Canada has plenty of space for its 30M citizens, right? (Yes, I understand that much of the territory is uninhabitable, but even still...).

Sorry, but if we want to address climate change and protect the environment, then we need to do this without sprawling outwards.

Re: Canada bans foreign home buyers for two years

#368

Post by hallway_monitor »

alistairSH wrote: post #281
fratlas wrote: post #244

Earlier quoted context omitted.

A designed process, very efficient at extracting the maximum price out of a stressful situation. It's a sad state of affairs in Australia right now.

But it's an open process. That it's close to optimal efficiency isn't a bad thing. Imagine the same level of stress, but you have to guess what the other buyers are bidding. Do you bid low and hope everybody else does? Bid high, but risk overpaying?

That's what I was thinking. In theory it should be a better system. Submitting a bid significantly over the asking price and then losing to another higher secret bid is very disheartening.

Re: Canada bans foreign home buyers for two years

#369

Post by boredumb »

Workaccount2 wrote: post #297

Building more housing is the only "pure" way out of this. Fuck nimbys, the government needs to just step in an do it.

Ironically it's the government stepping in with regulation and zoning that is preventing people from building more housing (that low and middle income people can feasibly afford). The cost of building a new home on an empty piece of land can be astronomical and so builders would rather get the massive sums of initial capital from outside investors, build a luxury building for high income earners and cash out instead of using their own funds to build more modest homes for modest returns. The cost of bringing in utilities/licensing to a luxury condo with dozens of units isn't O(N) to the cost of a single family homes utility/licensing so the economic incentive is to build high end buildings that don't do much in the way of bringing down prices.

Re: Canada bans foreign home buyers for two years

#370

Post by s1artibartfast »

djrogers wrote: post #339
s1artibartfast wrote: post #313

Earlier quoted context omitted.

The bank won't offer if you can't pay, at least in the US these days. But we have 30 year fixed mortgages, I think Canada is shorter

The norm in Canada is 30 year term, with a variable rate. It's the second part that can really get you...

That makes sense, I would be terrified putting 40% of my pre-tax income towards a mortgage with a variable rate
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