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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

#781

Post by nine_k »

jjav wrote: post #709
xapata wrote: post #659

Earlier quoted context omitted.

> incentivizing developers to build affordable housing But that's unnecessary. If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable.

> If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable. Not really: Say there's one free acre of land in town. You could build one mansion on it, or a highrise with 100 apartments. Building the mansion isn't going to move the needle on any existing housing at all, as it's just one unit.

I wonder why NYC has so few mansions, and so many high-rises.

Re: Canada bans foreign home buyers for two years

#782

Post by 8note »

specialp wrote: post #620
huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

It is not just that it is an attractive place to park wealth as far as ROI. It is attractive period because you can park your wealth in an obscured way in a place more fair than where you live. If you have a lot of money in places like China and Russia or if you have money from graft, it could all be taken away quickly. So these people are very willing to buy something real in a "safer" country, even if it has a nega…

From that perspective, the simplest way to resolve the money parking issue is to seize assets owned by chinese or Russian citizens. Break that assumption for non-canadians.

Alternatively, provide a dedicated asset class for that, so they can put their money in something other than housing

Re: Canada bans foreign home buyers for two years

#783

Post by munk-a »

seunosewa wrote: post #746
munk-a wrote: post #726

Earlier quoted context omitted.

To slow the value gain - I think ideally the government would like to sort of stabilize housing prices in BC & ON for a few years then re-start a slower more reliable growth pace... exploding the housing market fully could cause a value loss - so this is like opening one pressure release valve to slow the build up a bit.

Liberalizing the housing market is a slow process that will be heavily contested politically and in courts, so it won't lead to an instant explosion of the housing market. The political will to continue liberalizing the housing market will evaporate as soon as housing prices become reasonable as a result of it.

The market can generally move faster than politics - as soon as it becomes common knowledge that the housing market will be opened up you'll see a modest drop in prices, when some legislation is passed you'll see a larger drop in prices... if and when that legislation survives the court you'll see even more of a drop.

This issue isn't that the laws will move too quickly but that the open intent to pass those laws will spook the market and cause a panic - which is actually a lot worse if you want to deflate the market because any aide or support you'd want to provide is going to come in well after the market has already responded.

And, to return to my main point above... when that happens people with a lot of free capital sitting around are going to be able to game the system and make a bunch of money off of it. So wealth inequality will increase and it's likely a lot of folks will be in an absolutely terrible spot.

Re: Canada bans foreign home buyers for two years

#784

Post by shkkmo »

xapata wrote: post #659
clpm4j wrote: post #582

Earlier quoted context omitted.

Eliminating a subset of buyers, i.e. slightly decreasing demand, is an easy and obvious action to take. Will it have a significant and long lasting effect? Very likely not. But when examining the supply-demand equation, it's painfully obvious to say "foreigners who don't live here should not be allowed to buy residential housing". It's way, way easier than incentivizing developers to build affordable housing and deal…

> incentivizing developers to build affordable housing But that's unnecessary. If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable.

Up to a point, this is true when the affordable housing has had it's cost bid up by high end customers because of a scarcity of high end housing.

However, once that high end market pressure has been abated, then there a real and hard limits to the amount of high end housing that can/will be available to low income customers. Instead of being available cheaply, this high-end housing stock will end up being used as a vacation house or a short the rental, neither of which actually help reduce local demand for housing.

Re: Canada bans foreign home buyers for two years

#785

Post by nine_k »

8note wrote: post #775
tick_tock_tick wrote: post #694

Earlier quoted context omitted.

> build affordable housing Lets build shitty buildings that will last for decades. Affordable housing is and will always be a horrible idea. Build and build until you get a surplus and suddenly tons of housing is affordable.

Luxury and affordable buildings only differ by the rent they charge. The quality of the building is determined by building codes

The size and shape of rooms, hallways, stairways, elevators (if we're talking about high-rises), the quality of installed windows, quality and presence of a centralized HVAC, etc, certainly depend on the "luxury level" of a building.

Building codes set the lower bounds of acceptable quality of a building, which is good but not all-encompassing (and for a good reason).

Re: Canada bans foreign home buyers for two years

#786

Post by [deleted] »

BlargMcLarg wrote: post #737
seanmcdirmid wrote: post #711

Earlier quoted context omitted.

The USA is about 12% immigrants, Japan is around 2%. I mean, it is definitely no China, but it has the lowest immigration rate of the all the developed countries.

That's not what I was pointing to. Check the visa requirements for various visas for the US, Japan and other developed countries. They follow similar thought patterns: skilled workers with demonstrated experience and/or knowledge, who won't be a burden on the state. The biggest boon being most skilled workers from developed countries already know English at an okay level, and most developed countries accommodate non-…

[deleted]

Re: Canada bans foreign home buyers for two years

#787

Post by chipsa »

titzer wrote: post #762
chipsa wrote: post #748

Earlier quoted context omitted.

You can pull capital out of it by making it expensive to leave a home empty. Then capital will go where they can get better returns. Bonus tax when the average occupancy of the property drops below a certain percentage, say.

People will just rent it. I don't know what the solution to the problem is, but I fear where it's heading. If people cannot get housing, anarchy and revolution are in the making. Then it's heads on pikes, French Revolution style.

Yes. That's the point. People will rent it. Which means they need to be priced such that people can rent it. (If the rent is too high, people can't rent, which means it sits empty, which triggers the punitive tax). Lower rents will drive prices down, as people will decide to rent instead of buy for a while.

Re: Canada bans foreign home buyers for two years

#788

Post by imtringued »

tick_tock_tick wrote: post #694
clpm4j wrote: post #582

Earlier quoted context omitted.

Eliminating a subset of buyers, i.e. slightly decreasing demand, is an easy and obvious action to take. Will it have a significant and long lasting effect? Very likely not. But when examining the supply-demand equation, it's painfully obvious to say "foreigners who don't live here should not be allowed to buy residential housing". It's way, way easier than incentivizing developers to build affordable housing and deal…

> build affordable housing Lets build shitty buildings that will last for decades. Affordable housing is and will always be a horrible idea. Build and build until you get a surplus and suddenly tons of housing is affordable.

Yeah, let the building plague begin.

Re: Canada bans foreign home buyers for two years

#789

Post by zip1234 »

seanmcdirmid wrote: post #741
zip1234 wrote: post #630

Earlier quoted context omitted.

Land value tax would prevent people from buying land without a plan to make it useful. IE ending land speculation and encouraging productive uses of land.

> Land value tax would prevent people from buying land without a plan to make it useful. Ya: a land value tax is just a property tax that ignores improvements (charing based on what could be built rather than what is built). But it would totally destroy the low income housing market (since property owners of old run down low-end rentals would be seriously penalized for not building new luxury apartments).

1. There is a difference between luxury apartments and new apartments. 2. More likely the most egregious wasted land uses will be destroyed and not something already being used fairly productively. For example empty lots or parking lots are low value and would be turned into housing, driving down prices far before any existing building would be affected

Re: Canada bans foreign home buyers for two years

#790

Post by twblalock »

BitwiseFool wrote: post #702
twblalock wrote: post #599

Earlier quoted context omitted.

When more people show up, you should build more housing. Canada is a big place with a small population relative to its size — you have plenty of space. Your argument might work if Canada was a small island like Singapore, but it is one of the largest countries by land area in the world. What prevents you from just building more housing in all that extra space you have? Zoning laws and nimbyism.

>"What prevents you from just building more housing in all that extra space you have?" That's the wrong way to look at the problem. Developers can already build in the hinterlands, but there's virtually no demand to do so because the economic activity is concentrated in the established cities. You also run into the Siberia problem where despite having massive tracts of "free/undeveloped" land in the taiga, actually i…

You don't need to build in the hinterlands. Looking at a map I see space around many major Canadian cities.

Vancouver may be the most constrained geographically but quite a lot of it looks suburban and could be built up if the political will existed.

Or, Canadians could choose to build nothing but single-family homes, but if they make that choice, they should own it and admit it is the real reason rather than blaming foreigners.

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