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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

#441

Post by Aunche »

tomrod wrote: post #406
Aunche wrote: post #354

Earlier quoted context omitted.

What's better for the housing market: someone who buys a $10 million home for themselves, or someone who buys 10, $1 million dollar apartments and rents them out? If anything, the former should be paying a higher property tax because they're constraining the supply buyer and renter markets. >Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism . Yes, I largely agree with Georgism, but I don't think…

I don't think the pocketbooks of REIT owners justify keeping the status quo housing market. Commercial and industrial REITs can do fine with 10 properties. Residential REITs perhaps shouldn't exist, as residences typically aren't directly economically productive. Business and investment models can adjust; management companies would fill the investment gap for REITs. So rather than direct ownership, shareholders can i…

>Residential REITs perhaps shouldn't exist, as residences typically aren't directly economically productive.

Residential REITs and other institutional investors finance the construction of new apartment complexes. I don't think a landlord is that much more incentivized to take care of their property any more than a property manager who gets hired by the REIT or institution. Even if small landlords are better than REITs, I don't think that people who own 2-10 homes are necessarily any more productive landowners than institutional investors. There are plenty of people in the former category besides landlords: for example, someone buys a seasonal home that does nothing for most of the year or inherited property and are just letting it sit vacant.

>I don't follow your assertion that increasing taxes on larger ownerships would result in rich people buying the biggest property they could possibly afford. People do that anyway?

The point is to disincentivize this behavior? Same reason why you would increase property taxes/LVT in the first place. I'm not saying that institutional investing in property is great. I'm saying that there are worse behaviors that should also be punished. This is a particularly big problem in vacation destinations where the housing supply gets swallowed by non-residents.

Re: Canada bans foreign home buyers for two years

#442

Post by wbsss4412 »

sofixa wrote: post #208
pembrook wrote: post #130

A quick look at the data suggests only about 2% of properties in Toronto and Vancouver are owned by overseas investors. Yes, housing is priced at the margin, but this won't do anything at all to prices over the long term. I'm sure this will be wildly popular politically, because people LOVE the idea that some foreign boogieman is the reason their children can't afford homes anymore. It's much easier to outsource your…

> Like all cities in areas with heavy-handed zoning regulations, abuse of historic preservation clauses, and filibuster-style city council meetings blocking new construction...the issue is one of supply. > It's the same problem in literally every developed country on earth right now. The problem with making generalisations is that you're often wrong. The French real estate market has problems, with prices rising in s…

I’m not sure that you’ve made the case that they are wrong strongly enough.

Does France have heavy handed zoning and historic preservation policies? Sure.

But you aren’t getting 5-6 story multi family buildings constructed at a face pace in major metro areas. In many places, such construction in prohibited entirely by also how family zoning.

And while France may protect historic monuments like an old church. “Historic preservation” in North America often implies restrictions on building in a single family residential area that was built in the 1920s.

Your post does show, however, that restrictions don’t have to be eased all that much, but unfortunately it’s a lot easier in North America to lay the blame all on foreigner and other greedy people, than regular homeowners who show up to city council and lose it over a multi story senior center from going into their neighborhood.

Re: Canada bans foreign home buyers for two years

#443

Post by alberth »

whywhywhywhy wrote: post #430
alberth wrote: post #403

Earlier quoted context omitted.

> "IMHO blind bidding is an unethical practice" When you're applying to a new job, do you feel it's ok for the hiring company to ask you what exactly you currently make so that they can offer you $1.00 more than what you currently today? If not, how is that not "unethical"? (Also note, in the US at least - you can't ask someone what they currently earn). I just don't understand why it's unethical. Maybe the seller wa…

>do you feel it's ok for the hiring company to ask you what exactly you currently make so that they can offer you $1.00 more than what you currently today? Yes but I don't have to accept it and I can then tell them what I want and they're free to turn it down and it's a discussion. The hiring equivalent would be every applicant would write their expected salary down. Then the lowest wins with no negotiation.

If you're a home buyer, you also don't have to submit a bid either if you feel the price is too high.

Re: Canada bans foreign home buyers for two years

#444

Post by alistairSH »

TomVDB wrote: post #379
alistairSH wrote: post #272

Earlier quoted context omitted.

You say that, but the fact you didn't bid $25k+ initially tells us otherwise, no? Here in DC metro, people are massively over-bidding (relative to list price) because they've already bid/lost 5-10 homes in the last few months. So, they go in strong, $100-$150k over on a $600k list price isn't uncommon right now.

Why this focus on list price? In a hot market with little supply, a list price is a marketing tool to get people into the door, and for a selling realtor to be able to brag about how good they are. That’s it. It has been like that for years. It doesn’t make sense to post a list price that is too high or accurate (unless you don’t want the hassle to deal with multiple bidders.) 1500 sqft houses in my formerly middle c…

It's just a reference. A bids/closings so far over list is relatively new to this market; the last time we had anything similar was the lead up to the 2008 crash.

More typically, a "$500k" house would list for $480 and close at $520 or maybe $550. Today, that same house is listing for $599 and closing at $700+. Not only have the prices gone up, but they've gone up fast enough that nobody really knows what a home is worth until it closes.

Re: Canada bans foreign home buyers for two years

#445

Post by throwaway894345 »

ericmay wrote: post #427
alex_sf wrote: post #400

Earlier quoted context omitted.

There is plenty of housing for plenty of people in most parts of North America. The 'problem' is that what people _want_ is cheap housing in urban centers, a.k.a cool spots. Because that doesn't exist, we claim to have a housing shortage.

I think that used to be the case and I would have argued as such as early as 2018 w.r.t NIMBY and San Francisco but I think it's becoming less true. Now sure you can buy a trailer in the middle of nowhere in the Nevada desert, but what were previously considered "cheap" houses in places like Des Moines are increasing substantially in price, and that's not just the cool spots either. You might say "Well just rent then…

> as energy costs increase (EVs won't save us)

I don't really disagree with your larger point, but I can't help but explore this nit because it seems interesting. I don't think anyone is arguing that EVs will markedly reduce energy prices; however, there is an argument that renewables will decrease energy prices by virtue of being cheaper per unit power. Of course, it will take at least a decade before renewable energy isn't supply-constrained, so I don't think anyone is expecting this to happen soon, and moreover I've heard counter-arguments that the figures associated with renewable energy aren't including the storage costs which would be required to make renewable energy suitable for base load generation or the costs to decommission/recycle hazardous solar panels and fiberglass wind turbine blades--maybe there will be a ~10 year window during which the supply of renewable energy meets/exceeds demand but before the recycling/decommissioning costs kick in en force? :)

Re: Canada bans foreign home buyers for two years

#446

Post by throwaway2037 »

dmalik wrote: post #38
tici_88 wrote: post #34

Foreigners, especially the billionaire type, can and have been setting up shell corporations through which to purchase Canadian real estate. The proposed measure will do nothing to stop this practice. The measures proposed by the Canadian government are likely just political posturing and indented to "pull the wool over the eyes" of Canadian voters because the housing bubble/crisis has reached epic proportions and ev…

This is correct. The Beaverton has a good satirical article that gave me a chuckle talking about this. https://www.thebeaverton.com/2022/04/canada-to-ban-foreign-h...

Cripes. This is crazy good. I read for about 30 mins. This feels like The Onion from 10 years ago! Example headline: > Perfect fit with this discussion!

Re: Canada bans foreign home buyers for two years

#447

Post by randomdata »

bluGill wrote: post #413
randomdata wrote: post #355

Earlier quoted context omitted.

As a farmer in Canada, I haven't seen a farm auction like that since I was a kid. Most farms these days are sold either by someone knocking on a door and making offer that can't be refused or by tender, conducted by law firms. Real estate agents/auctioneers, and the cut they want to take, have largely been taken out of the equation given how easy the farm properties are to sell.

I see ads for farm auctions that work like that every few weeks living in Iowa. I have no idea why there are regional differences, but I'm not really surprised they exist.

> I have no idea why there are regional differences

I'm sure it is multi-faceted, but supply management is a big difference. Notably, diary farmers in some provinces voted to impose a quota price limit in an attempt to make it affordable for new farmers back in the mid-2000s. This means that the amount that quota sells for is the same now as back then, even though the fair market value has at least doubled in the meantime.

This has created a market aberration where the quota is undervalued and to resolve it farmers have started tacking the difference onto the purchase of land. In other words, on paper I pay you $x for quota and $y for land in order to stay compliant, even though in reality I'm actually paying you $2x for quota and $y-x for the land.

This, of course, has driven up the price of farmland to unreasonable heights as people notice what farmland is selling for on record. $40,000 per acre isn't unheard of these days. I bet you in Iowa, despite having a climate that can easily outgrow us in Canada, won't see anything close to that.

As farmland prices have risen (up ~700% since 2007), residential sprawl out into that farmland has become much more expensive. This has increased the pressure on housing in existing urban areas, pushing prices up there. And, thus, the Canadian housing problem that's being discussed in the larger scope here.

Re: Canada bans foreign home buyers for two years

#448

Post by pembrook »

chucksta wrote: post #405
pembrook wrote: post #282

Earlier quoted context omitted.

Canadian MLS says 600,000 properties sold each year. Over 5 years that'd be roughly 3,000,000 homes. 1/3rd of that would be 1 million homes sold to foreign investors. There's only 1 million people globally (including Canadians) with a net worth over $10 million. That means every single one of them would have bought a Canadian home in the last 5 years. I mean Canada is nice and all, but does that seem plausible?

seems very plausible individuals or small groups are buying multiples, especially if the purpose is to store or move money.

Even if 2% of global HNW individuals bought a home in Canada in the last 5 years (and 2% sounds high to me), they'd each have to buy 50 Canadian houses per person to reach that 1,000,000 number.

Re: Canada bans foreign home buyers for two years

#449

Post by AYBABTME »

alex_sf wrote: post #400
throwaway894345 wrote: post #362

Earlier quoted context omitted.

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...).

There is plenty of housing for plenty of people in most parts of North America. The 'problem' is that what people _want_ is cheap housing in urban centers, a.k.a cool spots. Because that doesn't exist, we claim to have a housing shortage.

You portray it as being some capricious choice by entitled brats, but ignore that there's economic and efficiency advantages for society to have more centrally located workforce and services.

Re: Canada bans foreign home buyers for two years

#450

Post by ejb999 »

rybosworld wrote: post #264
ejb999 wrote: post #233

Earlier quoted context omitted.

Quoted post unavailable.

It's not unreasonable to want to protect your hard-earned money. Inflation forces people to invest in assets. We have reached a point where everything is overpriced (stocks, homes, etc.) and inflation is rampant. So unless you want to have less purchasing power than you did last year, you invest in what you think gives the best return. Placing the burden on the individual to "do the right thing" is scapegoating in th…

But this is the comment I was responding to:

" I think it would be fine if my taxes were helping others to start out. "

so that poster was saying having his taxes jacked up to help someone out is 'ok with them', and yet he has the power to help others out already - without the law forcing him/her to do it - he obviously thinks he can afford it, and is in favor of it - but he is not going to do it without the law requiring him to - i.e. he is virtue signaling.

as usual, "someone should do something", once again really means "someone else should do something"

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