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Canada to ban foreigners from buying homes

bloomberg.com

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Re: Canada to ban foreigners from buying homes

#41

Post by chollida1 »

RandyRanderson wrote: post #6

The Canadian economy is almost entirely dependent on real estate[0][1]. It's almost a certainty that the Liberal government would never hurt that sector in any meaningful way. I'm guessing that they're run the numbers and they know this won't have any real effect (other than political points scoring). Most of the RE demand comes from immigration (in CA, currently more than 1%/year) - look at any country that has high…

> The Canadian economy is almost entirely dependent on real estate[0][1].

Umm your link says real-estate is 13%. How can you justify calling that "almost entirely dependent".

I would agree Real-estate in Canada s too large for Canada's own good

Re: Canada to ban foreigners from buying homes

#42

Post by dsnr »

hemreldop wrote: post #33
dsnr wrote: post #25

Earlier quoted context omitted.

This is not really guaranteed to solve the problem. It will only be a part of the solution. In many countries, including Europe, new properties are quickly snatched by investment companies that have much easier access to capital than private individuals and can easily afford to pay above market prices. People shouldn’t really have to compete with companies or “investors” on the housing market.

Well investment companies buy to resell. If there is a glut of new houses prices will definitely go down in the medium term.

In Germany they mostly buy to rent out and I’m sure it’s happening in other places as well.

Re: Canada to ban foreigners from buying homes

#43

Post by ClumsyPilot »

RandyRanderson wrote: post #6

The Canadian economy is almost entirely dependent on real estate[0][1]. It's almost a certainty that the Liberal government would never hurt that sector in any meaningful way. I'm guessing that they're run the numbers and they know this won't have any real effect (other than political points scoring). Most of the RE demand comes from immigration (in CA, currently more than 1%/year) - look at any country that has high…

"Canadian economy is almost entirely dependent on real estate"

This is a myth, real estate makes no contribution to (ironically) the Real Economy.

Think about it, if rents in London double, then the % of GDP in real estate doubles! Everyone's life has just gotten worse because they have to earn money elsewhere and pump it into real estate whether they like it or not.

The greater is your housing shortage, the more the people are suffering, the greater is the share of realestate in the economy.

It affects you negatively even if you own a house, you pay someone's rent every time you need a plumber or buy a coffee.

The housing shortage is a giant vampire squid sucking the first world dry. i am not a PhD economist, but institutional investors are definately contributing to the problem.

Re: Canada to ban foreigners from buying homes

#44

Post by notsrg »

woah wrote: post #31
VincentEvans wrote: post #7

I don’t know the specifics on Canadian real estate market and the specifics of the problems there, but based on my understanding of the problems facing your neighbors to the south - I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” (always a move that is popular with politicians) to redirect attention from the much more likely cause - massive investments made by hedge funds,…

> massive investments made by hedge funds, private capital, REITs which does not appear to be addressed at all? If corporations buying houses was actually affecting the purchase market prices, then we'd see an equal effect on rental prices going down. A corporation can't live in a house, so they'd be renting it out. If these evvvill corporations were keeping houses vacant just to screw over regular hard working folks…

In Toronto alone ~40% of new homes being built are being scooped up by investors that obviously have more cash on hand to pay above asking price. With interest rates so low and demand so high, why would they not be driving up the price? It works in their favor.

Re: Canada to ban foreigners from buying homes

#45

Post by zukzuk »

trinovantes wrote: post #18
RandyRanderson wrote: post #6

The Canadian economy is almost entirely dependent on real estate[0][1]. It's almost a certainty that the Liberal government would never hurt that sector in any meaningful way. I'm guessing that they're run the numbers and they know this won't have any real effect (other than political points scoring). Most of the RE demand comes from immigration (in CA, currently more than 1%/year) - look at any country that has high…

It's fine for demand to go up as long as supply can keep up -- which unfortunately hasn't for decades thanks to NIMBYs https://financialpost.com/news/economy/ontario-alberta-and-m... https://www.livabl.com/2021/05/canada-housing-market-most-un... Look at any satellite or aerial view of Vancouver or Toronto and it's basically all SFH https://www.reddit.com/r/toronto/comments/twj89s/yonge_st_fr...

Everyone's got their pet theory on what's behind Canada's housing crisis. In reality it's probably a combination of different factors.

The NIMBY theory is probably part of it, but definitely not the full story. For one, Toronto and Vancouver's population density is on par with major european cities (Toronto is about the same as Berlin, and Vancouver same as London). Arguably most european cities have similar affordability problems, but if NIMBYism is an issue, it's not particular to Canadian cities.

My pet theory is it all comes down to money supply. All that money generated out of nothing through quantitative easing over the last decade+ had to end up somewhere, and it's settled in real estate and equities. If that's the case, then the end of QE and "balance sheet pruning" is going to put a stop to this... and likely pop a giant bubble in the process. That's a scary prospect for countries like Canada and New Zealand, where RE has played such a huge part in inflating wealth.

Re: Canada to ban foreigners from buying homes

#46

Post by impostervt »

mperham wrote: post #20

Liberal governments will do everything but the one thing that will solve the problem: make it much, much easier to actually build more housing. Everything else is just pointless busywork.

This seems like the only real, market based solution. Various taxes that could be implemented (or bans like from this article) will either have no effect or unforeseen consequences.

The market, right now, is constrained by regulations. Adding more regulations is unlikely to fix things.

Re: Canada to ban foreigners from buying homes

#48

Post by [deleted] »

jenkstom wrote: post #35

I could sell my house (not in Canada) for so much more than I bought it two years ago. But then what? All of the houses around here are going to corporations who are squeezing money out of those who can't find a home to buy. Because they've all been bought up by corporations. I'm not "anti-corporate" by any stretch of the imagination, but this is definitely a problem that is hurting families. I would vote for somethi…

[deleted]

Re: Canada to ban foreigners from buying homes

#50

Post by SECProto »

mperham wrote: post #20

Liberal governments will do everything but the one thing that will solve the problem: make it much, much easier to actually build more housing. Everything else is just pointless busywork.

> Liberal governments will do everything but the one thing that will solve the problem

Construction permitting is mainly a municipal issue, with a bit of provincial thrown in there. Municipal representatives are not aligned with particular parties, and provinces are mostly not governed by Liberals at the moment (7 conservative, 2 Liberal, 2 independent, 1 NDP, 1 Saskatchewan "we aren't conservative, pinky swear!" Party.

The federal Liberals don't have much control over the situation (though there are other specific actions I think they should take)

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