"Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks • Hacker News Board

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#401

Post by alchemist1e9 » Thu, Feb 08, 2024, 4:19 AM UTC

FireBeyond wrote: post #398

alchemist1e9 wrote: post #395

Earlier quoted context omitted.

The critical factor in evaluating economic impact is per capita prosperity, not the geographic density of spending. Vacant properties, while not directly contributing to local consumer spending, represent significant capital inflows, enhancing the economic well-being on a per capita basis. Misunderstanding this dynamic overlooks the broader benefits of such investments, including bolstered public budgets and improved…

This is veering into a realm of hypotheticals and academia that ignore real world reality and humanity. You: "row upon row of vacant luxury properties represent significant capital inflow!" Real world: vacant luxury houses can cause blight and other problems just as much as low-income housing. Also, the value of the vacant property does not decrease because it is occupied. Unless your claim is that the local burden o…

The assertion that vacant luxury houses inherently cause blight overlooks the reality that many such properties are well-maintained, contributing to local tax revenues without burdening public services—a far cry from the notion of blight. Indeed, exclusive communities with predominantly absentee owners serve as a prime example where properties retain or even increase in value due to their exclusivity and limited use, benefiting the broader community through infrastructure contributions without proportional utilization.

The idea that homes might be ‘worth more if nobody lives in them’ reflects a misunderstanding of market dynamics in exclusive areas. These properties offer significant economic benefits by providing substantial tax revenues and maintaining high property values, which support public budgets and infrastructure with minimal physical wear and tear. This scenario underscores the often-overlooked reality that absentee ownership can contribute positively to a community’s economic and physical landscape.

Furthermore, dismissing the economic construct of housing ignores the foundational principles of supply and demand that govern real estate markets. All aspects of housing, from affordability to availability, are indeed shaped by economic forces. Acknowledging this doesn’t detract from the importance of community and social well-being; rather, it provides a basis for understanding and addressing housing challenges in a manner grounded in reality, not ideology.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#402

Post by TeaBrain » Thu, Feb 08, 2024, 5:45 AM UTC

JumpCrisscross wrote: post #125

emmanuel_1234 wrote: post #122

Earlier quoted context omitted.

That's because they are one of the most global bank, therefore a prime choice when it comes to moving money from countries to countries. Most bank have a much smaller global footprint and can't be used as such. Banks don't benefit from their customer laundering money just like landlords don't benefit from drug trafficking in their building: it's a hindrance and it costs a lot to do anything about it. Source: I work o…

> they are one of the most global bank By what metric? I’d argue the driving factor is their proximity to dirty money. Same with Russian banks. Then other people notice you’re used to looking the other way and you get word-of-mouth network effects. With money launderers.

I don't know much about HSBC's history with dirty money, but they are well known to be one of the most global banks. Only Citibank and Standard Chartered operate in more countries.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#403

Post by FireBeyond » Thu, Feb 08, 2024, 6:17 AM UTC

alchemist1e9 wrote: post #401

FireBeyond wrote: post #398

Earlier quoted context omitted.

This is veering into a realm of hypotheticals and academia that ignore real world reality and humanity. You: "row upon row of vacant luxury properties represent significant capital inflow!" Real world: vacant luxury houses can cause blight and other problems just as much as low-income housing. Also, the value of the vacant property does not decrease because it is occupied. Unless your claim is that the local burden o…

The assertion that vacant luxury houses inherently cause blight overlooks the reality that many such properties are well-maintained, contributing to local tax revenues without burdening public services—a far cry from the notion of blight. Indeed, exclusive communities with predominantly absentee owners serve as a prime example where properties retain or even increase in value due to their exclusivity and limited use,…

All of this studiously ignores the fact that occupied homes provide exactly the same tax revenue, the same property value, support the same budgets as those vacant homes. Yes, increased wear and tear comes with occupation. But you pretzel yourself to act like the people in the homes contribute nothing to the local economy to subsidize and account for this increased wear and tear.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#404

Post by alchemist1e9 » Thu, Feb 08, 2024, 10:09 AM UTC

FireBeyond wrote: post #403

alchemist1e9 wrote: post #401

Earlier quoted context omitted.

The assertion that vacant luxury houses inherently cause blight overlooks the reality that many such properties are well-maintained, contributing to local tax revenues without burdening public services—a far cry from the notion of blight. Indeed, exclusive communities with predominantly absentee owners serve as a prime example where properties retain or even increase in value due to their exclusivity and limited use,…

All of this studiously ignores the fact that occupied homes provide exactly the same tax revenue, the same property value, support the same budgets as those vacant homes. Yes, increased wear and tear comes with occupation. But you pretzel yourself to act like the people in the homes contribute nothing to the local economy to subsidize and account for this increased wear and tear.

Unoccupied homes don’t contribute a capita that’s not pretzel anything. The fact you don’t like rich people owning homes they don’t use or live in, doesn’t make them bad for prosperity just because you want them to be. Locaions with that phenomenon are some of the most prosperous in the world.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#405

Post by jfil » Thu, Feb 08, 2024, 1:39 PM UTC

bonestamp2 wrote: post #232

> during the Covid-19 pandemic, because Canadian casinos were closed, Chinese underground banking schemes evolved Hang on, what... I want to hear more about the Chinese underground casino stuff.

https://torontolife.com/city/inside-the-markham-casino-fiasc...

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#406

Post by randomdata » Thu, Feb 08, 2024, 3:36 PM UTC

dghlsakjg wrote: post #400

randomdata wrote: post #361

Earlier quoted context omitted.

> Canadian real estate has ALWAYS gone up (until now) Have always gone up expect for when they haven't. Nationally, real estate prices dropped precipitously in the early 1980s. And the Toronto housing crash of 1989 was a complete meltdown. It took until the 2010s for prices to finally return to where they were in 1989!

Yes, I understand that this isn't strictly true. I guess a more accurate way to put it is that there is almost no one working in banking or any mortgages currently written where a major correction has happened. Canada wasn't whacked in 2008 nearly as bad as the US, and the early 1990s property corrections were much more regionally focused (Toronto got the worst of it), in Edmonton, 1989 and 1990 prices increased more…

There was the crash of 2022, seeing a nearly 30% haircut nationally while at the bottom. For comparison, the US housing crash of the oughts saw a peak decline of 33%. Everyone in banking was surely around to see that major correction happen.

Granted, the market had ramped up so quickly, and then crashed so fast, that the number of underwater mortgages was likely small – and probably haven't come up for renewal yet. So, you're right that there isn't much management experience, and may never be.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#407

Post by ysofunny » Thu, Feb 08, 2024, 3:46 PM UTC

cycrutchfield wrote: post #198

ysofunny wrote: post #157

Earlier quoted context omitted.

there's a tiktoker that compares real states prices in Canada and in various parts of Europe it's funny to see dozens of examples of european castles (buildings with tens of rooms and bathrooms, plus huge gardens) whose cost is in the same ballpark as 2 or 3 bedroom houses in random (but well [sub]urbanized) parts of Canada

Wait until you see the maintenance and heating costs for those castles, or any old building in general. The sticker price isn’t the whole story.

I know that, but the comparisons are still ridiculous

the canadian properties are in some cases less than 100 square meters, getting compared with land properties of square kilometer scales!

the discrepancies in land value are artificial and are part of the global inequality crisis

but on the global scale the inequality is not between individuals, but between cities and states (and countries)

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#408

Post by quink » Thu, Feb 08, 2024, 6:01 PM UTC

robocat wrote: post #336

xcrunner529 wrote: post #246

Earlier quoted context omitted.

150k from 20m of assets? Really? Lmao

Every bugger sees a number like 2% and then says '$150000' whoop-de-shit like its some trivial amount. $150k is a lot of money. Its easy to tell other peoples what to do with their money huh? You've never had a bill you couldn't pay? Major assets are usually tied up in long term investments with breaking costs due to illiquidity or taxation (e.g. sell a house before the bright-line period is up and you may pay a lot…

> I get fuck all of the money I bring into the country (after expenses, salaries risk and taxes).

So why argue this passionately against a non-existent tax that failed at the ballot box on A. assets that doesn't kick in until above $10 million by citing B. an income of near enough $0?

> You've never had a bill you couldn't pay? [...] Have you saved enough for your retirement or are you going to live off the backs of other New Zealanders?

I'm pretty sure that in either of those scenarios, there is no practical difference between having twenty million and twenty million minus $150,000 a year, reducing to zero by ten million, in assets.

> I've seen friends get big ACC payouts - and a few weeks later its all burnt on nothing.

Hmmm, sounds like they irresponsibly spent it somewhere in the economy. My guess is that they might have enriched people who have invested in medium to large businesses in the consumer discretionary sector, the sort of people who would have a net wealth north of $10 million. But since they were provided with, and I quote, "nothing" goods, the owners of the businesses providing those goods should have relatively no problem dealing with high taxation.

If you feel this doesn't apply to you, you might want to revisit your investments before complaining about hypothetical tax policy.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#409

Post by quink » Thu, Feb 08, 2024, 6:23 PM UTC

robocat wrote: post #307

xcrunner529 wrote: post #273

Earlier quoted context omitted.

Because your business doesn’t just start earning 20m and that’s still only 150000. Are you arguing against fake numbers?

> fake numbers no : - I'm using the numbers in the quote in my comment, and from the link I gave you. Taxation rules create incentives and disincentives. If you earn a salary you are usually ignorant of those incentives because you don't experience them. From what I see the attitude is "fuck everyone who is better off than me". Our rules need to encourage people to make NZ better off. Not have the incentive to stop o…

Your argument against a non-existent $150,000 yearly tax is that a single person would need to pay that if they owned a property two thirds the size of the Vatican, on the ocean, 45 minutes from the biggest city centre in a 2000km radius.

No wait, that wasn't the argument here, your argument is that they wouldn't want to accumulate even more wealth.

> Not have the incentive to stop once you have gotten a $20m home

Minor point, that's not a home, that's two homes in the same listing. I'd argue that accumulating property wealth beyond a house seems like it ought to be disincentivized at least a little bit, but evidently you're under the impression that either poor people don't deserve the opportunity or that land is in infinite supply.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#410

Post by dghlsakjg » Thu, Feb 08, 2024, 6:36 PM UTC

randomdata wrote: post #406

dghlsakjg wrote: post #400

Earlier quoted context omitted.

Yes, I understand that this isn't strictly true. I guess a more accurate way to put it is that there is almost no one working in banking or any mortgages currently written where a major correction has happened. Canada wasn't whacked in 2008 nearly as bad as the US, and the early 1990s property corrections were much more regionally focused (Toronto got the worst of it), in Edmonton, 1989 and 1990 prices increased more…

There was the crash of 2022, seeing a nearly 30% haircut nationally while at the bottom. For comparison, the US housing crash of the oughts saw a peak decline of 33%. Everyone in banking was surely around to see that major correction happen. Granted, the market had ramped up so quickly, and then crashed so fast, that the number of underwater mortgages was likely small – and probably haven't come up for renewal yet. S…

Where are you getting a 30% drop in 2022? The BoC data shows https://housepriceindex.ca/#chart_change=c11

If you cherry pick the localized data, even the worst off suburbs of Toronto you see a dip of just over 22% with a pretty quick reversion to the mean. If you look at metro areas, none of the cities in Canada saw greater than 10% drops from 2022 peaks, and they have all recovered from the bottom.