[HN Gopher] Canada to ban foreigners from buying homes
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Canada to ban foreigners from buying homes
Author : thazework
Score : 508 points
Date : 2022-04-07 15:09 UTC (7 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| beebmam wrote:
| Why can't we increase property taxes for businesses that own
| homes? And, for individuals who own more than, let's say, two
| homes?
| jimmydeans wrote:
| Because lots of government make a lot of money and have
| multiple homes.
|
| It's a fine black of pretending to do something, but just not
| enough to hurt your friends.
| bregma wrote:
| Property tax is on the property, not on the owner. The
| municipality doesn't know and can't know who actually pays the
| taxes on a property. To have each municipality create their own
| spy agency to determine who is making the e-transfer for each
| roll number on their list will cause more problems than it
| solves.
| cwkoss wrote:
| Put an exponent in the property tax calculation based on number
| of properties owned (by individual or business) within a
| jurisdiction.
|
| ex. taxes are [rate * appraisedValue * 1.1 ^
| numPropertiesOwned]
|
| Needs some sort of mechanism to prevent corporations from
| spinning up subsidiaries to use as a tax shield in these
| calculations though.
| __turbobrew__ wrote:
| This is how Singapore addressed the housing crisis and I think
| it would be a great idea for Canada to follow suit. It levels
| the playing field between the 30 year old couple looking to
| start a family and massive REITs/corporations with billions in
| capital.
| hello_moto wrote:
| Singapore has a few ways to address housing crisis no?
|
| HDB and a few restrictions on who can purchase it. etc.
| nacho2sweet wrote:
| It is full loopholes like people with 10 year visas, work visas,
| student visas are exempt. We have University students with
| $31million Vancouver mansions in their name. Our tax system is
| screwy where we have very low property taxes and high employment
| tax. The whole west side of Vancouver claims poverty level
| incomes on average (like qualifies for government tax rebates
| bad), yet it is the most expensive land in the country.
|
| Astronaut families are a problem and I feel leach on the society.
| Paying very low taxes, using all the social services, yet making
| income outside of the country so not paying anything.
| 29083011397778 wrote:
| > Our tax system is screwy where we have very low property
| taxes and high employment tax
|
| I agree, but I think we both know how well fixing that will go
| down with the absolutely massive voting group that is seniors.
| joshlemer wrote:
| We need to end or put limits on the Primary Residence Capital
| Gains Tax Exemption which is uncapped in Canada, unlike the cap
| of 200k in USA. It is unfair to renters and it is leading to
| insane housing prices.
|
| It is unfair to renters because renters do not have an equivalent
| 100%, completely unlimited tax-free investment vehicle. We have
| Tax-Free Savings Accounts, limited to ~$5k contribution per year,
| and we have RRSP's with max contributions scaled to income, but
| homeowners have access to all those things too, and they are
| limited. Homeowners can take advantage of TFSA, RRSP, and then
| shove all of their remaining savings into maxing out their home
| purchase and enjoy all of their gains completely tax free.
| Renters have to start paying capital gains at an inclusion rate
| of 50% once they max out TFSA/RRSP.
|
| This system is completely unfair and places a higher tax burden
| on renters who are, on average, less wealthy than homeowners. It
| encourages us to spend more than we should be on housing just to
| get around taxes, and discourages investing in actual productive
| things like innovation/companies.
| jl2718 wrote:
| What exact problem are you trying to solve? I can think of a
| lot that this would cause.
|
| Analyze any specific tax policy deeply enough and you'll find
| that there is no way to fix something that starts off as
| unnecessary and harmful.
| joshlemer wrote:
| The problem is that poorer people or renters generally are
| subsidizing richer people or homeowners generally. Depending
| on if your view is that Canadian governments are too big or
| too small, you'd say that renters are being unfairly
| overtaxed and should be given a break, or that homeowners are
| not paying their fair share and should be taxed more.
| jl2718 wrote:
| A lot of home owner occupant tax advantages were
| specifically introduced to disadvantage landlords. If you
| get rid of them, it may make the problem worse because
| there will be no way out of the rental trap. Separately,
| there are many tax laws that are written specifically to
| benefit landlords, and these disadvantage renters directly.
| The whole 'fair share' of taxes argument presumes that the
| aggrieved group would pay less if others paid more. This
| wholly unsupported. Government extracts what citizens will
| bear.
| joshlemer wrote:
| Well I guess in that framing, I as a renter am expressing
| that I am not willing to bear this tax burden, and so
| will be voting accordingly.
| jl2718 wrote:
| You should always vote for less taxes on yourself.
|
| Voting for more taxes on other people does not reduce
| your taxes.
| medvezhenok wrote:
| I would say that there are moral positions where you
| should vote for more taxes on yourself (and others like
| you), not less. Because always voting for less taxes for
| yourself is a zero sum game where everybody loses, since
| the government has to be funded somehow (and I prefer it
| to be done via taxes versus inflation, which is much more
| regressive).
| seanc wrote:
| In exchange we get population mobility; without this tax break
| homeowners would be very reluctant to ever sell their house and
| move someplace else. Also, housing capital gain isn't
| completely tax free; we all pay increasing amounts of property
| tax as the value appreciates. Although those taxes are baked
| into rents so maybe that's a wash depending on one's point of
| view.
|
| Policy is hard and unintended consequences are around every
| corner. For example, I could see an argument for changing the
| scheme to a special rebate. So you pay your capital gain tax
| when you sell your primary residence but then get it all
| refunded when you buy another one. But then this scheme would
| wind up dinging senior citizens with a massive tax hit just
| when they're trying to put together cash for some end-of-life
| care.
| joshlemer wrote:
| But they cap tax free gains in the states at 200k, do we see
| mobility barriers in that jurisdiction?
|
| Also, I believe what you're describing does exist in the
| states in the form of a "1031 exchange".
| dfas23 wrote:
| This is terrible, people would just never sell their homes.
| joshlemer wrote:
| Real estate investors have to pay capital gains on properties
| they sell, do they never sell their properties?
| hello_popppet wrote:
| I posted this earlier -
| https://news.ycombinator.com/item?id=30945227. And no, it's not
| supposed to be a tongue in cheek.
|
| First of all, this "ban" is for 2 years. Secondly, majority of
| the homes bought, as in the stark-fucking-majority, are by
| investment firms. This ban doesn't apply to them.
|
| This is just another reshuffling of money that's going to be
| pocketed by the government cronies. What are they going to spend
| $10B on? They aren't the ones building houses and residencies,
| that's for sure.
|
| Other commenters in here are spot on. First they tried to swindle
| us by saying oh no no it's not the foreigners, you're just being
| racist and xenophobic. Now fucking what.
| saos wrote:
| the UK also need to do this asap. But problem here is normal
| people obsessing over the need to have a property empire. Its so
| so strange. The outlook on housing in the UK really needs to
| change
| hello_popppet wrote:
| We all know that on an intuitive level, housing can never be
| affordable again in the West. At least in the areas that are
| currently out of reach for most people. The outlands, maybe,
| remain inhabitable but far removed from major cities. There's no
| policy out there that will, by the time you wake up tomorrow,
| bridge the twenty-fold gap between what majority of people in the
| country make and what an apartment (never mind a house) costs.
|
| This isn't a matter of supply and demand, of investors taking 80%
| of all new houses, of foreigners laundering money, or of NIMBYs.
| These are all red herrings. These are all secondary effects of a
| bigger problem. These are all ways to ignore the real problem.
|
| No amount of policy will slash house prices in Toronto by half,
| and no policy will double your income to match the increasing
| prices.
|
| I suggest you stop looking for policies, because by the time any
| of them take effect and reverb through society, long enough time
| would have passed that you'd spend your whole life renting and
| paying off someone else's mortgage anyway.
|
| Now ask yourself if that's the future you want, and act
| accordingly.
| ryeights wrote:
| > These are all ways to ignore the real problem.
|
| > I suggest you stop looking for policies [...] you'd spend
| your whole life renting and paying off someone else's mortgage
| anyway.
|
| > Now ask yourself if that's the future you want, and act
| accordingly.
|
| Sorry? I don't speak in vagueries.
| timbit42 wrote:
| Pressure will go down as the baby boomers die off.
| joshlemer wrote:
| Nonsense. It is simple supply and demand. If we build on a
| scale not seen for generations, and eliminate tax benefits to
| owning (the principal residence tax exemption), then prices
| will come down.
| hello_popppet wrote:
| That's not going to happen. We have had this discussion on HN
| for a decade now. People are misled by "it's simple, solve
| for X."
| gregable wrote:
| I've been looking at the Toronto real estate prices a bit, and
| I'm convinced the real issue is primarily interest rates, not
| immigration, or construction. Don't take my word for it, ofc:
|
| Immigration:
|
| - Rent has not increased like real estate:
| https://www.zumper.com/rent-research/toronto-on
|
| - In 2020, immigration dropped by half to 184,500. Real Estate
| prices went up. https://www.canada.ca/en/immigration-refugees-
| citizenship/ne...
|
| Construction constraints:
|
| - This is probably hyper-local, but in Toronto for example, they
| are building over 1 new housing start per year for every 100
| residents
| (https://ycharts.com/indicators/toronto_on_housing_starts).
| That's not bad, it's not the CA Bay Area's situation.
|
| - Anyone in Toronto can tell you there is a lot of home building
| going on with construction everywhere.
|
| Canadian mortgages don't have the typical 30-year fixed rate that
| a lot of US mortgages do. Instead, typical mortgages reset every
| 5 years, and in fact many are month-to-month variable rates. In
| fact, the percentage of new mortgages originating as these
| variable rates in Canada has been rising and recently broke 50%.
| The majority of homes are now financed using a month-to-month
| variable rate which is set to some profit above Bank of Canada
| prime rate.
|
| Until March, it was possible to get a mortgage with a 1% or even
| lower interest rate in Canada. Take a look at the average:
| https://www.ratehub.ca/5-year-variable-mortgage-rate-history
|
| In Mar 2020, Canada dropped the short term bond rate from 1.75%
| to 0.25% overnight. In 2008, they did something similar from 4%
| down to nearly zero, and had only just started raising them back
| towards 1.75% right before Covid. Only in March 2022 did we see
| the first rate hike and it was very mild.
|
| Canada Real estate is basically a bubble driven by aggressively
| low interest rates. The problem now is that inflation is causing
| the interest rates to rise, and that could pop this bubble, so we
| might be seeing some of these laws designed to shift the blame.
|
| More sources:
|
| - https://en.m.wikipedia.org/wiki/Canadian_property_bubble
|
| - https://www.bloomberg.com/news/articles/2021-06-15/world-s-m...
|
| - https://betterdwelling.com/the-toronto-real-estate-bubble-no...
|
| - https://seekingalpha.com/article/4477223-canadian-housing-ma...
|
| - https://financialpost.com/executive/executive-summary/postha...
| tqi wrote:
| Why not just have occupancy requirements / vacancy tax?
| Spivak wrote:
| They do! This is in addition to that.
| Tiktaalik wrote:
| BC/Vancouver did this. Wasn't a silver bullet that made housing
| affordable overnight, but it add thousands of units to the
| market and there's evidence that it influenced the sort of
| housing that developers built more toward apartments for
| renters.
| hemreldop wrote:
| That's a ridiculous amount of regulation to enforce and frankly
| is very restrictive. Why shouldn't people have two homes.
| sublimefire wrote:
| Because there is not enough for everyone and the property
| should not be treated as an investment.
| msie wrote:
| I put this here. Tricon owns 30,000 homes.
|
| https://www.reddit.com/r/toronto/comments/tpym75/toronto_lan...
| stephenhuey wrote:
| I'm mostly familiar with Vancouver since my wife has relatives
| there. About half a dozen years ago they imposed a 15% tax on
| foreign real estate investors. I heard 2015 figures suggesting
| foreign Chinese investors accounted for one third of the $29
| billion market in 2015. Vancouver real estate prices had been
| rising a lot for a long time but I think they felt the foreign
| investors exacerbated the problem for locals, especially since a
| lot of investors would just buy homes and no one would live in
| them.
| msie wrote:
| Well it's complicated. Foreign investors would be buying
| mansions that locals couldn't afford anyways. And the locals
| are just bidding against themselves for the cheaper stuff armed
| with low interest rates and bank of Ma and Pa. My statistic
| says that only 20% of RE is foreign owned.
| Ensorceled wrote:
| If developers are building "mansions" entirely for a foreign
| market, that is a very bad for local housing. It means that
| those houses actually purely speculation vehicles.
|
| Also, "only" 20%? That's a massive number for housing.
| robonerd wrote:
| > _Foreign investors would be buying mansions that locals
| couldn 't afford anyways._
|
| If nobody is around to buy that mansion, it would eventually
| be sold to a developer who either turns it into apartments,
| or tears it down and builds an apartment building there. I've
| seen this happen numerous times in my neighborhood.
|
| Also 20% is huge.
| arrosenberg wrote:
| That's not complicated, it's a second negative externality.
| Foreigners buying and not-occupying large amounts of valuable
| real estates drives up the cost of new housing, with no
| benefit the city, even if you squint really hard. A lack of
| new housing means high prices for the existing housing that
| the locals are "just bidding against themselves" on. It's a
| practice that should be taxed into oblivion.
| tomatowurst wrote:
| Your argument makes no sense and its just playing into the
| xenophobic narrative.
|
| There is nobody looking to buy a condo under $1MM mark
| competing to purchase the 8 digit figure homes in West
| Vancouver. The rich people selling and buying them aren't
| hurting at all.
|
| Local Canadians are competing to expand their real estate
| portfolios and they aren't looking at homes in Langley
| because they sold their mansion in West Vancouver.
| leetcrew wrote:
| housing markets aren't disjoint this way. people will
| consider moving up or down a couple tiers if it makes
| financial sense (or they don't have a choice). if the
| market for mansions is particularly tight, you will see
| rich people start buying condos instead, driving up
| prices in the midrange. some professionals that would
| otherwise be targeting those condos will be forced to
| consider more marginal homes in the low end, moving the
| price there as well. the same thing can happen in reverse
| if demand dries up at the high end, but you don't see
| that as often.
| tomatowurst wrote:
| > if the market for mansions is particularly tight, you
| will see rich people start buying condos instead
|
| a west vancouver home easily costs above $10 million, you
| think they are going to move into a penthouse in Yaletown
| as their primary residence and thus driving condo prices
| up?
|
| this makes no sense, people aren't selling their west
| vancouver home to downsize they are in a position to get
| even more leverage from the bank and expand their
| portfolio and likely own homes in North Vancouver and/or
| abroad already.
|
| the people selling their homes for ~$1MM are downsizing
| because they can't buy a home at that price range anymore
| arrosenberg wrote:
| It's not xenophobic, it's classist. I'd make a similar
| statement about domestic rich people, but at least they
| can make the argument that they contribute to the civics
| of the city in some way by actually being present and
| involved.
|
| If you expropriated all of the unoccupied mansions and
| replaced them with normal-priced, mixed housing, the cost
| of housing in the city would broadly go down, as supply
| would massively increase. Pricing being bid up amongst
| specific classes of housing and people is a second order
| problem - the first order problem is that unoccupied
| mansions are a criminal misuse of land which must be
| remedied by taxation.
| tomatowurst wrote:
| The crux of the issue are zoning laws that artificially
| suppress supply. in particular the city of vancouver have
| resisted rezoning to high density low rise homes because
| it hurts their voter base who are NIMBY multiple property
| home owning Canadians who turn around to sell them to
| whoever will buy them.
|
| and then the masses turn around to blame that group. its
| straight up xenophobia one that has been in Vancouver for
| a very long time, anti-asian xenophobia in Vancouver is
| not new. 80s, it was the japanese, 90s, hong kong &
| koreans, 2000s, taiwanese and mainlanders.
| arrosenberg wrote:
| Yes, one group of people got rich and now a different
| group of have-nots are mad at the people left holding the
| land. That is not an uncommon historical trope. That has
| nothing to do with what I said - unoccupied mansions on
| valuable land are an economic crime against the average
| person. If you want to blame that on zoning laws, you'd
| probably be correct in many cases, but its also a
| taxation issue.
|
| I'm not from Vancouver, so their xenophobia doesn't apply
| to me. Vancouverites burned down their own city after
| losing the Stanley Cup Finals - I'm definitely not here
| to defend their character. You can stop going to that
| well, I only see this as land use issue.
| tomatowurst wrote:
| > Yes, one group of people got rich and now a different
| group of have-nots are mad at the people left holding the
| land.
|
| Very much so and it probably stings even more for that
| have-not group, that its people from what they perceive
| to be of "third world origin". There's just no helping
| such people, instead of seeking ways to better
| themselves, they choose to live in a state of angst and
| anger and expect the government to somehow fix it.
| arrosenberg wrote:
| You seem pretty obsessed with xenophobia, but its really
| just easier to target wealthy foreigners than wealthy
| domestics. This is a class and land use issue - the have
| nots don't need to "better themselves" (nor do they need
| the implied patrimony in that statement), they need homes
| on affordable mortgages. The government can do that! We
| know they can, because they have before, you just need
| the land. Oh look, some unoccupied mansions...
| tomatowurst wrote:
| when you aren't affected by it, you are more likely to
| discount it. the people aren't going after iranians or
| russian foreigners. they are literally singling out one
| group by race in Vancouver.
|
| Again you don't live here and you don't fall in the
| category so you won't understand how sensitive this issue
| is here.
| arrosenberg wrote:
| I dunno, it kind of seems like I do. My city has the same
| land use issues, without the alleged xenophobia and we
| still target foreign wealth way more than domestic. Its
| just easier.
| tomatowurst wrote:
| > I dunno, it kind of seems like I do
|
| how?
| neonate wrote:
| 20% is a lot in a tight market.
| gareth_untether wrote:
| There's pretty tight rules about leaving properties empty.
| Daily fines in the thousands.
| barbazoo wrote:
| https://vancouver.ca/home-property-development/empty-
| homes-t...
|
| It looks like more in the "hundreds" given that it's 3%/year
| of the assessed value. But still, a good start I'd say.
| LAC-Tech wrote:
| Read the small print:
|
| _The foreign-buyer ban won't apply to students, foreign workers
| or foreign citizens who are permanent residents of Canada, the
| person said._
|
| They did this stunt here in New Zealand too, where "foreigners"
| excluded Australian Citizens, Singaporean citizens, and permanent
| residents.
|
| Anyway, prepare for the media (and public, because the media
| determines how we talk) to use the term "foreign buyer ban"
| forever.
| msie wrote:
| It will be interesting to see what happens but I don't think it
| will do much as most of the people buying property are Canadians.
| And New Zealand, which has a similar policy, has skyrocketing
| house prices right now:
|
| https://www.globalpropertyguide.com/Pacific/New-Zealand/Pric...
| twa999 wrote:
| good first step, but now ban corporate landlords if you're really
| serious.
| dane-pgp wrote:
| A corporation can have economies of scale, which could (in a
| free market) mean lower costs to renters, and also be less
| subject to the landlord's personal circumstances, which should
| make rental agreements more stable.
|
| Obviously the property market isn't functioning like a free
| market, but why do you think that having more private landlords
| would make things better?
|
| Do you just want a limit on the share of the property market in
| a given location that one entity can own? That would definitely
| make sense.
| raajg wrote:
| The housing market in Toronto is a hot mess at the moment. When I
| told my friends in US that even for renting a condo, I had to put
| an offer that was more than the asked monthly rent they were
| surprised and wouldn't believe me!
|
| The excessive imbalance in demand Vs supply also means that the
| owners have > 10 offers for each house and the prospective
| buyers/renters are just putting blind offers in the hope that
| their offer is more than most of the other offers.
| cmrdporcupine wrote:
| The blind offer thing is particularly enraging. If our real
| estate market has degraded to being auction-based, that's
| awful, but fine, let's regulate it like an actual auction and
| demand transparency in pricing. Hell, make it a second price
| auction (second highest bid + $1 or so). Put in some sane
| rules, like an actual auction.
|
| Right now it's just awful.
| Jyaif wrote:
| > Trudeau's party also proposed a ban on "blind bidding" for
| houses
|
| Blind bidding is so clearly biased towards sellers I couldn't
| believe it was legal in the first place.
| RspecMAuthortah wrote:
| The ruling liberal party is out of touch here like many other
| things.
|
| Key problem here is that the inventory is super low, part of it
| is due to everyone wants to settle in places like
| Toronto/Montreal/Vancouver due to high job concentration along
| with NIMBY attitude among the existing suburbs. There is an
| inflow of 400k immigrants every year who mainly tend to settle in
| the big cities such as Toronto/Montreal/Vancouver, putting upward
| pressures. On top of that, the liberal government flat out does
| not want to impose tax free capital gain from primary home sales,
| and wide availability of credits with as low as 5% downpayment
| which can be used with equities from first, second, third homes.
|
| This is just a political move to show they did something. The
| liberal party minister once said they don't want to entertain any
| crush on house prices because that would be detrimental to new
| home buyers. When buyers get the signal that Government has their
| back and there will never be a crush [1].
|
| [1] https://www.cbc.ca/news/business/housing-canada-policy-
| marke...
|
| https://www.thestar.com/politics/federal-election/2021/08/24...
| dfas23 wrote:
| Capital gains on primary residence is a non-starter. 65% of
| households in Canada own their homes.
|
| It would be political suicide.
| tomatowurst wrote:
| When the going gets tough the ruling party just scapegoats a
| minority group who they perceive to be socioeconomically
| advantaged. ex) Jews in Europe
| givemeethekeys wrote:
| Will Canada ban > 50% foreign ownership of all state property? If
| not, then this will be the most useless ban ever. All you have to
| do as a foreigner is register a Canadian company and have the
| company buy the real estate.
| thrwy_ywrht wrote:
| I know HN is not the place for glibness, but literally: just
| build more homes. Everything else is rearranging deck chairs on
| the Titanic. Zoning reform is the answer.
| recursive wrote:
| That only works if people are living in all the homes.
| paulpauper wrote:
| and also build more jobs, nicer neighborhoods and everything
| else that makes some areas more expensive than others
| georgeburdell wrote:
| The student exemption makes this decree useless. I live in the
| Bay Area and in my personal life cross paths with Mainland
| Chinese living their personal lives. I have more than once
| attended birthday parties at high-end houses that are sparsely
| furnished and inhabited except for a single "student".
|
| As a non-affluent person, I don't know if rich Americans do the
| same thing. However, enrolling your child in a Master's program,
| who takes the minimum number of credits per semester, may pencil
| in as a good property management option for someone with no ties
| to the U.S. otherwise and only wants capital appreciation.
| hello_moto wrote:
| Limit ownership to only 1 property for international students
| and foreign workers.
| akyu wrote:
| jedberg wrote:
| The law is so toothless it won't do much. Foreign investors will
| just find a local conduit to "buy" the house.
|
| > The foreign-buyer ban won't apply to students
|
| People will send their kid to college and buy them a 5 million
| dollar house to live in while they are there. And presumably they
| won't be forced to sell once the student leaves.
| axg11 wrote:
| A populist policy that amounts to pissing into the wind. Canada's
| rising real estate prices has a simple cause: demand far
| outstrips supply. The demand isn't driven by foreign investors.
| It's driven by a 1.1% annual population growth rate, the majority
| of which is immigration.
|
| I am one of these migrants. Canada's immigration system recruits
| high-skilled workers and many of the fast track programmes
| require that you demonstrate a minimum proof of funds in the tens
| of thousands of dollars (multiples of the average Canadian's
| liquid savings).
|
| High-skilled workers aren't moving to Canada to live in the
| abundant land of northern Manitoba. They're moving here to live
| in areas with relatively high opportunity: Toronto, Vancouver,
| and Montreal if they speak French. Housing demand is concentrated
| in those areas and surrounding regions.
|
| There isn't a matching desire to build homes at a pace that
| outstrips immigration. Interestingly, total number of dwellings
| in Canada has grown by ~1% annually over the last 5 years. On the
| surface, that looks to match the immigration rate (1.1%), but
| both those numbers are for the whole of Canada. The majority of
| immigrants move to one of the main cities, whereas new homes are
| much more geographically spread.
|
| TL;DR: increase homes or decrease people, everything else is
| pointless.
| [deleted]
| 3qz wrote:
| There's an exception for students and a lot of other loopholes
| here. I think it's an excuse to give up after 2 years with
| "proof" that it was a bad idea.
| b3morales wrote:
| Those exceptions -- for people who live and work in Canada but
| aren't citizens -- look to me like basic requirements for this
| to have any chance at being a reasonable policy. Excluding
| noncitizen permanent residents from home ownership would be a
| great way to make sure approximately zero high income (thus
| high tax) people want to migrate to Canada.
| 3qz wrote:
| Nobody in Canada is buying property because of their high
| income. The top 1% doesn't make enough for a house anywhere
| within an hour of Vancouver or Toronto. I don't think income
| tax is really a factor here.
| OJFord wrote:
| And force couples to buy in one (the citizen)'s name, etc.
| Element_ wrote:
| Canada's immigration rate is over 1% it is very easy to get
| citizenship. There are already tons of front people with
| citizenship buying real estate on behalf of foreign investment
| pools. These measures are just PR, with 68% home ownership rate
| any measures that cooled home prices would be political suicide.
| GoOnThenDoTell wrote:
| What about companies?
| annoyingnoob wrote:
| Or a Trust at a bank.
|
| I don't think foreigners can buy land in Mexico either, but you
| can open trust at a bank in Mexico and the trust can own the
| property.
| FpUser wrote:
| It is about time. With today's the majority can not hope to ever
| own their place.
| throwawaymanbot wrote:
| rs999gti wrote:
| Where will Chinese/Russian/Saudi millionaires and billionaires
| now offshore their wealth if they can't do it in Canadian real
| estate?
| tomatowurst wrote:
| They are buying properties that is well outside what locals can
| afford.
|
| Banning them won't stop local Canadians with access to
| literally free debt to leverage their real estate portfolios
| and rental properties.
|
| Neither will their investments in REIT companies that snap up
| new properties to flip them to those groups.
| RandyRanderson wrote:
| 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
| immigration and you'll see huge appreciation in RE (CA, AU, NZ,
| etc).
|
| You will also see a huge decline in birth rates in those same
| countries.
|
| [0]
| https://en.wikipedia.org/wiki/Economy_of_Canada#Key_industri...
| [1] https://betterdwelling.com/canadas-economy-hits-a-new-
| record...
| trinovantes wrote:
| 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...
| Nathanael_M wrote:
| I live in a small-mid sized city in Ontario. The biggest
| issue with our lack of housing is a hugely corrupt local
| government that has introduced a TON of extra fines and red
| tape to the building process. Plus there's a tremendous
| amount of "I'll scratch your back, you scratch mine" with the
| local building companies (of which there are functionally
| two). This all means that it's prohibitively difficult and
| expensive for any new developers to enter the scene and the
| best margins exist in the $500k+ range for new houses. It's a
| nightmare.
| zukzuk wrote:
| 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.
| trinovantes wrote:
| I agree NIMBY is definitely not a Canada-exclusive thing. I
| would say that it's far more prevalent in western
| countries.
|
| Japan's zoning laws are at the federal level so despite
| growing population in Tokyo metro, they have comparatively
| less affordability issues. It's crazy (as a Canadian) to
| think that Tokyo's central wards have roughly 3x the
| population and same land area as Toronto but are still able
| to have sub $1 million detached homes.
| A4ET8a8uTh0 wrote:
| That, or, like in the old country, the law to be passed will
| have built-in exceptions or riders that will be exploited on
| arrival. It is possible that I have become a little too
| cynical, but even if I thought it was a good idea ( I don't ),
| I just don't see it actually happen.
|
| People with money will find a way in; like they always do.
| chollida1 wrote:
| > 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
| ClumsyPilot wrote:
| "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.
| WestCoastJustin wrote:
| Currently, more than 10 per cent of Canada's GDP is derived
| from residential real estate activity: renovations, ownership
| transfer costs and real estate commissions. [1]
|
| [1] https://nationalpost.com/news/canada/canadas-unhinged-
| housin...
| alan-hn wrote:
| Is 10% == "almost entirely"?
| yonaguska wrote:
| Renovations are actually a tangible benefit, while
| ownership transfer costs and real estate fees are more of
| an indicator of high liquidity, but they don't actually
| provide value for people seeking housing.
| rekabis wrote:
| Focusing on foreign buyers is a distractionary tactic. The
| primary cause of housing value spiking comes down to investors
| and speculators. Combat those, and the marketplace will return to
| sane valuations:
|
| * Speculation tax of 50% of the assessed or sold home value
| (whichever is greater) of any home held for less than two years,
| decreasing on a daily basis to 0% over years 3 through 8.
| Exemptions can be had due to extenuating circumstances (military
| or police redeployment, divorce, death of co-holder of title,
| etc.). Because most pre-sales are snatched up by investors before
| ground has even been broken, only to be sold for two or three
| times its original value upon completion.
|
| * Businesses (and by proxy, business owners that own multiple
| businesses) cannot own more than one rental residence per
| municipal district. This prevents speculators from buying up
| entire neighbourhoods just to jack up rents. There is a valid
| case for a business to own a residence (to host guests of the
| business), but anything more than the occasional guest can be put
| up in a hotel.
|
| * Individual non-business landlords cannot derive more than 50%
| of their income from rental properties. Another method is to have
| taxes on rental income on a sliding scale depending on what
| proportion of their entire personal income rent is a part of,
| starting at normal rates up to 20% of income and rising to 100%
| taxation at the point where 100% of income is rental income.
|
| The last one alone ought to protect people for whom landlording
| is NOT a full time job in of itself, such as people with mortgage
| helper suites or second homes that they upgraded from.
|
| The point being, those with just one or three units are far less
| likely to be predatory than slumlords who own entire apartment
| blocks or institutional investors that own a significant block of
| rental units in a city.
|
| And such a progressive taxation scheme ought to materially
| prevent rentals from being dominated by a handful of investors.
| jl2718 wrote:
| This will just create complicated sales contracts, and
| advantage bigger landlords. The simple solution is market-
| valued property tax, because it's basically unavoidable.
| medvezhenok wrote:
| The solution is land value tax. Nobody deserves to own a SFH
| in a large city when that land could be used for more housing
| - you want to live in a SFH, move to the countryside (or pay
| an exorbitant tax rate which will fund other development).
|
| It's also why LA is such a mess.
| hello_moto wrote:
| > Individual non-business landlords cannot derive more than 50%
| of their income from rental properties
|
| Properties are one of the top income generator for (pure)
| retirees. How would you ensure they can retire and still have
| income via properties?
|
| I guess you can add clausal to exclude {retirement_age}
| ownership? Hopefully nobody uses them as proxy. Tricky huh?
| medvezhenok wrote:
| > Properties are one of the top income generator for (pure)
| retirees
|
| Yes, and that's part of the problem - holding property
| shouldn't be a viable retirement plan. If they want
| retirement income they could sell the houses and buy an
| annuity or invest in productive enterprises (or buy
| government bonds back in the day - which is no longer an
| option, unfortunately).
|
| Extracting surplus income from workers via property rent-
| seeking should not be a way to fund retirement in the first
| place.
| 88840-8855 wrote:
| I see you put a lot of thought into tag issue and yet, i much
| be that guy and tell you that it will just add a lot of
| bureaucracy and those who have resources and knowledge will be
| able to circumvent those restrictions.
|
| And it does not solve the problems of:
|
| - there is just too much cash out there
|
| - land is limited. once it's gone, it's gone
|
| - when you die, your kids get your house and land
| neonate wrote:
| https://archive.ph/oWGMM
| 1270018080 wrote:
| It sounds they're not forcing the "Mom and pop landlords" to sell
| though their hoard though, so they're just making it easier for
| them to continue their leeching. They're just as big, if not
| bigger, of a problem.
| VirusNewbie wrote:
| I don't know about Canada, but in the US there are some tax law
| changes that could drastically reduce 'land hoarding' and help
| encourage excess capital to flow into _construction_ of new
| properties rather than rent seeking.
|
| Right now 1031 exchanges mean real estate over many other types
| of investment are tax advantaged, (I can't do the same thing with
| my stock for instance) and doubly so for places that put caps on
| property taxes.
|
| The US (and canada?) should heavily tax capital gains on _land
| appreciation_ for all but your primary residence, at the same
| time it would give tax incentives on capital gains for
| constructing new units.
|
| Right now excess capital is encouraged by multiple tax laws to
| just play the rent seeking game waiting for land appreciation
| while others do the hard work of _causing_ an area 's land to
| become more valuable.
| paulgb wrote:
| > Freeland will introduce legislation that allows Canadians under
| the age of 40 to save as much as C$40,000 ($31,900) for a home
| downpayment within a new tax-exempt vehicle, the person said.
|
| I'm not an economist but this seems pretty dumb? To the extent
| that it helps someone afford a home that they can save tax-free
| for it, the same is true of some of the people they're bidding
| against, driving up the price they ultimately pay for it. The
| government is just transferring their own future tax revenue to
| people who _own_ homes, not people in the market for them.
|
| It seems that governments have a reflex of dealing with a supply
| crisis by showering money on the demand side (see also: gas tax
| decreases, higher education subsidies, etc.), which just drives
| up prices further.
| closeparen wrote:
| It is not actually possible to increase the supply of good
| suburbia. The virtue of a suburban home is to be on a large
| plot of land with low-intensity neighbors and convenient
| vehicle access to places, and this genuinely can't scale very
| far. Even if you have infinitely much land, you will never
| build enough roads or lanes.
|
| We can increase the supply of other things which are also
| called "housing" but are fundamentally different products, and
| not what most people in North America are talking about when
| they talk about wanting to buy or own homes.
| rootusrootus wrote:
| > It is not actually possible to increase the supply of good
| suburbia.
|
| Dallas seems to be doing it by organically creating a multi-
| core urban metropolis. Infinite suburbia only fails if you
| assume that each metropolitan area can only have a single
| urban core.
| bombcar wrote:
| You actually could, basically, if you really wanted to do it.
| If there was an efficient high-speed corridor into the major
| metro area, suburbs could be much further out along it and
| it'd still work out well.
| dionidium wrote:
| In other words, people will be forced to weigh options and
| tradeoffs, just like they have to do with everything else. If
| you want a SFH very near to an urban core, then _you 'll have
| to pay what that's actually worth_ relative to alternative
| uses for that land.
| biomcgary wrote:
| One large reason for high priced real estate in some places
| is the geographically uneven distribution of disposable
| income. Historically, people moved to cities because the jobs
| were there (i.e., physical factories that had to exchange
| physical goods).
|
| No commuting for work = much less need for roads. If
| commuting and working in a centralized location is viewed as
| exceptional rather than normal, society could easily switch
| to lower density living, which is highly beneficial to most
| mammalian species (reduced stress, reduced aggression).
|
| If the most lucrative information-age jobs (tech, finance)
| become remote-first (or better, remote-only) and dominated by
| shape rotators, people will be able to move away from cities
| (and take the money with them). Only wordcels, who grift on
| social interactions, really need high density humanity to
| thrive.
| Element_ wrote:
| It is dumb and will likely add fuel to the fire and the
| politicians know this. Canada has like a 68% home ownership
| rate meaning actually doing something to lower housing prices
| would be political suicide.
| dionidium wrote:
| Yes, but crucially it's actually _land_ that 's valuable, not
| the housing that sits on it. The worry that allowing more
| density will tank home values is misguided. Land prices will
| keep going up as long as the _land_ underneath the houses
| remains desirable. In fact, upzoning means more allowed uses,
| which means _higher_ land values, which means more money for
| landowners.
|
| There are two implications of this: 1) NIMBYs need to realize
| that allowing more housing isn't going to tank prices; if
| you're worried about prices tanking, you need not be; 2)
| YIMBYs need to realize that NIMBYs aren't _exclusively_
| motivated by greed. When they tell you that they don 't want
| their neighborhood to densify _they actually mean it_. It 's
| not covering for racism or greed. People genuinely don't want
| their neighborhoods to change.
|
| There's hope in this. If the state forces upzoning, then
| people are going to grumble about it. And some of them won't
| be happy no matter what. But the average homeowner isn't
| going to be that upset about it once they realize there's
| money to be made.
| rootusrootus wrote:
| > 2) YIMBYs need to realize that NIMBYs aren't exclusively
| motivated by greed. When they tell you that they don't want
| their neighborhood to densify they actually mean it. It's
| not covering for racism or greed. People genuinely don't
| want their neighborhoods to change.
|
| In my experience this is almost 100% the real truth. I
| haven't met many people that are looking at their house
| price when they think about changes to the neighborhood.
| First consideration is usually traffic. Second
| consideration is character. In neighborhoods where almost
| everyone owns, they very much don't want to see it become a
| rental neighborhood.
| seanmcdirmid wrote:
| > NIMBYs need to realize that allowing more housing isn't
| going to tank prices. ... When they tell you that they
| don't want their neighborhood to densify they actually mean
| it.
|
| Ya, a lot of NIMBYs don't care about housing prices since
| they aren't thinking about selling anytime soon, they just
| don't want the traffic and (perhaps) crime that goes along
| with density.
|
| I get what they mean since I became home owner. I don't
| want my view to go away, and crime is already a problem
| (having some random person come into my drive way to check
| if my car doors are unlocked is quite unnerving when you
| can see it happen in real time through your cameras). I
| bought in an already upzoned area, however, so I'm more
| concerned if my son can get in the local choice school
| (which is heavily oversubscribed given the density).
| dionidium wrote:
| > _they just don 't want the traffic and (perhaps) crime
| that goes along with density._
|
| Something I've been trying to think through recently is
| that people clearly have some kind of proximity theory of
| crime. If there is a murder in the building next door to
| me, then that's going to make me uncomfortable, whether
| there is one family living in that building or 10. The
| obvious urbanist (or generic intellectual) response to
| this is to say, you know, obviously there will be more
| crimes in a neighborhood with more families, but you
| should only care about the _per capita_ numbers, not
| absolute totals.
|
| And increasingly I just think, yeah, obviously that's
| right, but that answer isn't good enough. Fear of
| interpersonal violence is lodged deep in our brains and I
| just don't think you can talk people out of it. You could
| make everybody in the city attend a class on crime
| statistics and quiz them at the end to make sure they
| understand per capita rates, but when those people get
| home that night they're still going to be worried about
| the murder that happened next door. And I don't think
| it's because they're dumb.
| seanmcdirmid wrote:
| Our per capita property crime numbers are horrible, and
| it doesn't have much to do with our neighborhoods being
| dense so much as it has to do with Seattle being a
| welcoming place for unhoused neighbors (encampments and
| derelict RVs on the street drive much of the crime). So
| we get all the problems from a large region that isn't so
| welcoming.
| nly wrote:
| We have a similar scheme in the UK, where you can save
| PS4000/yr and get a 25% top-up from the government if you use
| the pot to buy your first home. Everything invested in this
| scheme is tax free: income and growth.
|
| You're completely right, it just drives up prices further...
| but they're vote winning policies and using these pots makes
| conveyencers a nice profit.
| actuator wrote:
| I don't think these drive up prices higher.
|
| LISA specifically mentions that it has to be your first house
| anywhere in the world, so it is targeted at home ownership.
| People speculating shouldn't be able to take advantage of
| this.
|
| Though LISA is pretty much useless in London. Good luck
| finding even a good 1 BHK under 450k inside Zone 4
| dionidium wrote:
| That doesn't matter. It increases the amount the first-time
| buyer can bid from $x to $y, which just means the investor
| has to bid $y + 1 instead of $x + 1. Since $y is higher
| than $x all that's happened is prices have risen.
| actuator wrote:
| Yeah, but the idea is to try to give buyers a leg up from
| investors. It is another story that most investors have
| way more money to be outbid this way.
| nemothekid wrote:
| > _I don 't think these drive up prices higher._
|
| It's a demand-side policy to what is a supply-side problem.
| If the demand is already there, and you induce more demand
| by providing subsidies, prices will go up. If you want to
| reduce prices you must either increase supply (building
| housing) or decrease demand (remove someone, hopefully
| speculators, from the market).
|
| However, given housing has become a defacto investment
| asset for Americans and Canadians, I don't see this issue
| ever being resolved without a political revolution or an
| economic depression.
| actuator wrote:
| > housing has become a defacto investment asset for
| Americans and Canadians
|
| Is there a major economy where this is not true? In fact
| it becomes comical in some developing countries.
|
| Cities in India have NY/London like prices for much worse
| infrastructure and much lower purchasing power.
| nemothekid wrote:
| Japan, Germany, arguably, Britain. I'm not saying these
| places don't have exorbitant housing costs, but housing
| is not the primary way of securing your retirement.
| DaedPsyker wrote:
| You can't open a help to buy ISA any longer, the government
| honours existing accounts though.
| edent wrote:
| You can use a LISA for a first property.
| Tiktaalik wrote:
| It is dumb.
|
| It's an exersize in shifting money from relatively lower income
| renters who will never have enough money for a downpayment and
| who will never own a home, toward the relatively rich on the
| cusp of being able to buy.
|
| Of course the main winner here is the home builder.
| seanmcdirmid wrote:
| Giving individual citizens/permanent residents a one time
| benefit to buy a house will at least give them an advantage
| over second home buyers or foreign speculators. It would
| definitely drive prices up (to be honest, tax exempt $31,900
| isn't enough to do much though), but it should be a net win for
| those that have it vs. those that don't.
|
| A more extreme version of this is the public housing Singapore
| sells at a subsidy to each citizen (as long as they get
| married, and there is still a waiting list since supply can't
| keep up with the benefit).
| kache_ wrote:
| Ridiculous ageist policy. If you don't have a home and you're
| above 40, I'd argue you need the benefit even more.
| unglaublich wrote:
| What about no age discrimination at all?
| onlyrealcuzzo wrote:
| The home ownership rate is already >70% for people 40+.
|
| This is just pandering to young people in Vancouver &
| Toronto.
|
| Any tax savings will be passed on to owners in the form of
| higher prices.
|
| The only thing you'll do is pay higher property taxes and
| insurance.
| mjevans wrote:
| Agreed, this should be a tax code line with a small number of
| ORed entry conditions.
|
| - OR - at least one of
|
| * First time home buyer
|
| * Total homes owned plus being purchased will remain at one
| after the transaction is completed, and net-worth is under
| 20% the cost of a median home within the home's metro area.
|
| * Qualified for a federal benefits program excluded from the
| upper 60% of society
|
| The phrasing on the last one is specific, it's the wording
| required to select for economically disadvantaged individuals
| in a mechanically testable way. The exact number might be
| tweaked, this is just a back of the napkin ballpark. Other
| entry qualifiers can be added to the list. The second allows
| someone to move homes and if they need the benefit, not be
| locked out of assistance moving to an economically 'hotter'
| area that might have better jobs.
| prlambert wrote:
| I don't think that's totally right. The idea is to give
| Canadians a leg up vs. foreign buyers (once the immediate 2
| year foreign buyer ban expires, I assume). If your operating
| model is that foreign bidders are driving up the price and
| winning the marginal bid, then this is effectively a subsidy to
| allow Canadians to compete with the foreigners. Yes it will
| drive prices a bit higher and thus transfer more wealth to
| sellers. But the mix should be different, with more ownership
| ending up with Canadian purchasers than foreign ones (vs.
| today).
| Maximus9000 wrote:
| > the same is true of some of the people they're bidding
| against
|
| I think you're assuming that everyone bidding will be a first
| time home buyer under 40 years old. While that may be the bulk
| of buyers, there are also many investors also in the mix who
| are buying up houses to rent/flip them.
| paulgb wrote:
| A house goes to the highest bidder, so if you decrease the
| cost of capital for some participants you increase the price
| for everyone. I agree that it's not a perfect transfer, but I
| suspect it's a pretty good one, on the assumption that first-
| time buyers represent most of the capital entering the
| system. E.g. someone buying a first house for $500k puts
| $500k in the market, whereas someone moving from a $500k
| house to a $600k house is only bringing $100k of new capital
| into the system.
|
| I realize that people also leave the system, so maybe my
| logic is flawed.
| Beldin wrote:
| They tried something like this in. nl and that was pretty
| much exactly what happened: make some of the cash-limited
| house buyers be able to pay more increased prices.
|
| The desired effect typically is not achieved because such
| measures are aimed at the least affluent buyers. Giving
| those ways to bid more will not decrease prices. It just
| means someone else is now the least affluent buyer -
| typically not investors.
| halfjoking wrote:
| Want an exodus to reduce housing demand? Let the unvaccinated
| flee the country.
|
| Some Canadian needs to step up and become the unvaxxed Moses.
| "Let my people go, Eh?"
| resalisbury wrote:
| Housing Policy Nirvana: 1. ban supply (1920s - today) 2. ban
| demand (today - future)
|
| problem fixed!
|
| Srsly, why can't we concentrate on policies that unlock supply.
| nothing else matters.
| andrewstuart wrote:
| "Supply is a lie".
|
| You know who calls for "more supply"? Real estate developers,
| speculators and investors.
|
| This is how they distract from fixing the real issues in
| housing prices.
|
| Adding more supply won't bring house prices down, it will just
| give housing stock for investors to buy.
| nly wrote:
| Here in the UK I've been saying for years that we should be
| taxing or banning sales to anyone who isn't a full-time owner-
| occupier.
|
| The situation we have here with average property prices, reaching
| 10x median income, is simply untenable.
| boplicity wrote:
| > During last year's election campaign, Trudeau's party also
| proposed a ban on "blind bidding" for houses -- the prevailing
| system by which offers are kept secret when someone is auctioning
| a home.
|
| This is such a huge deal. Anyone who has had to go through the
| process of buying a home through a bidding war knows how unfair
| and one-sided this process is. It take a high-pressure emotional
| situation, and gives all of the information to one side (the
| sellers), while leaving the buyer stuck guessing at what the real
| price for the house is supposed to be. An absolutely horrible
| process that _should_ be banned. Banning this is such a simple
| reform. I sincerely hope it happens, though I doubt it it will.
| Tiktaalik wrote:
| worth noting that Aus and NZ don't have blind bidding and have
| severe housing issues as well.
| robocat wrote:
| New Zealand has deadline sales, which you sign a blind offer
| with whatever conditions you want, and then the vendor can
| choose any offer or change the rules or ask for more money or
| do basically anything they want.
|
| There are also tenders, which I don't know much about.
|
| And I have seen auctions where they set the reserve at a
| ridiculously high amount, and then negotiate with the highest
| bidder. A few years ago, one place I was underbidder at $280k
| (for something that I thought should go for about $250k),
| final bid was $290k, then vendor negotiated that bidder up to
| $350k! Another I was underbidder at $190k, final bidder was
| at $200k, then vendor negotiated them up to $250k.
|
| The dirtiest trick that real estate agents do is to
| convince/pressure vendors to bring the date of sale forward.
| Sale goes through at a lower price, agent does less work and
| turns over their properties more quickly (which vastly
| enhances the agents yearly profits).
|
| New Zealand restricted sales to foreign buyers in 2018, to
| prevent ballooning property prices for New Zealanders. Also
| rich foreigners buying large farms and prime coastal real
| estate was unpopular with most of the voting public?
|
| Edit: when the real estate market was burning hot, lots of
| sales were deadline (blind). I think deadline sales mean that
| the winner often has bid their highest price (I certainly did
| for my home). In auctions you often pay just a little bit
| over the underbidder, even if your top dollar might have been
| potentially a lot higher. When selling you mostly care about
| that one person who really loves your place and that is
| willing to, and can afford to, pay well over market price for
| it. All other potential buyers are just wasting time.
| WaylonKenning wrote:
| I think a tender is really a blind bid. A bunch of offers
| from different people (the tenders) are received before a
| deadline, and then the vendor views them all and chooses
| whatever one they like (which is probably the highest
| offer).
|
| I've just bought a house, and it's been interesting to see
| the selling method change as the market goes from hot to
| cold - Auction, Tender, Deadline, Buyer Enquires Over,
| Asking price.
| macspoofing wrote:
| >This is such a huge deal.
|
| Is it though? I chatted with someone from Australia which has
| open bidding and you know what .. houses still went way over
| reserve. At the end of the day, if you have 20+ offers on a
| house, you're not getting that house without destroying your
| budget, no matter how you set up the bid system.
|
| The common sense change I wanted to see implemented was to
| prevent the waiving of a home inspection as a condition of
| purchase.
| gregable wrote:
| I'm not sure why "amount over reserve / list" is a meaningful
| metric. It's clear that in a lot of cases the list prices are
| intentionally below market to attract more bidders and
| produce the appearance of more competition at open houses and
| the like.
|
| It's a very manipulated and manipulable metric.
| macspoofing wrote:
| >I'm not sure why "amount over reserve / list" is a
| meaningful metric.
|
| It's not. The salient part is that the current market is
| crazy and there is a large number of bids on any given
| house.
|
| >It's clear that in a lot of cases the list prices are
| intentionally below market to attract more bidders and
| produce the appearance of more competition at open houses
| and the like.
|
| Yes, list prices are intentionally below market but you
| know what ... houses are going for crazy amounts because we
| are in some sort of a bubble. This isn't the fault of blind
| bidding, or unscrupulous realtors or greed property owners.
| There are systemic economic issues at play. In my area, for
| example, there are houses that doubled in value in under 24
| months. When I bought my property 12 years ago, there was
| blind bidding, and bad realtors, but on any given property
| there were only 2-3 bids, so there was no issue.
| nemo44x wrote:
| > Yes, list prices are intentionally below market but you
| know what ... houses are going for crazy amounts because
| we are in some sort of a bubble
|
| Why? The last 40 years interest rates have continued to
| decline and inflationary pressures have hurt the value of
| every currency. What reason is there to believe this
| won't continue indefinitely (low interest + ~2% y/y
| inflation) and that the market is simply pricing things
| well?
|
| Clearly all these homes are being bought so it would
| appear people have the money.
| macspoofing wrote:
| >Clearly all these homes are being bought so it would
| appear people have the money.
|
| Yes ... Back in 2007, people bought homes as well - so
| everything was OK - rite?
|
| By the way, people aren't paying cash for houses.
| nemo44x wrote:
| Why would you pay cash? I made a cash offer on mine but
| still took out a loan since interest rates are so low.
|
| Homes are priced based on what people who want to live in
| a place are willing to pay per month. The interest rate,
| property tax rate, and home price determine that. As
| rates go down prices go up.
| 8note wrote:
| People have the loans, at least.
|
| Corporations and pensions might have the proper money
| rsync wrote:
| Fun fact: you can waive your inspection contingency ... and
| then still go inspect the house.
|
| Just bring your inspector along to a showing or open house,
| etc. Owners won't even be there.
| nemo44x wrote:
| You can inspect certain things. But you won't be inspecting
| to see if there's an oil tank buried in the yard, the
| quality of the chimney, if there's any radiation in the
| basement, and plenty of other things.
|
| But yes, you can probably inspect the construction quality
| and foundation pretty easily, a visual inspection of the
| roof and siding, and if you care the quality and age of
| utility appliances. You can also pull the permits if you're
| really interested before placing a bid. You can probably
| scan for termite damage, etc.
|
| A decent inspection is a 4 hour job or longer generally in
| my experience.
| 8note wrote:
| Checking for radiation in the basement sounds like
| something you can do passively as you walk through? All
| you need is a Geiger counter?
| nemo44x wrote:
| I think because Radon is a gas it's difficult to do.
| Every test I've seen has to be setup and left in place
| for a few hours.
| Johnny555 wrote:
| You're not going to be able to do a full inspection during
| an open house, the listing agent isn't going to let you
| climb on the roof, go into crawlspaces/attic, trip off all
| the GFCI breakers in the house, etc.
|
| What you're suggesting is called a "walk-and-talk"
| inspection, and is not going to find the high dollar
| problems a traditional inspection can find.
| rsync wrote:
| " ... the listing agent isn't going to let you climb on
| the roof, go into crawlspaces/attic ..."
|
| I have done all of those things on home viewings / open
| houses. I've opened septic risers, started generators,
| tripped breakers ...
|
| Nervous smiles were the worst responses I've ever gotten.
|
| You, and your sibling poster, are correct though: a
| _real, comprehensive_ inspection is hours long and no
| amount of brashness is going to bridge that gap - but
| there is a LOT you can do with 30 minutes of
| knowledgeable poking and prying. You don 't need an hour
| to see if the sills are rotting or if there are no
| foundation anchors ... or if all the floor joists are
| swiss-cheesed up by 40 years of ad-hoc electrical and
| plumbing runs ...
| heyitsanewacco wrote:
| It is because Realtors are crooks. That's about it. We also
| had to tack down assignment clauses so that realtors wouldn't
| re-sell their client's houses for more and pocket the
| difference.
|
| I also want to see mandatory home inspection, seems common
| sense.
| 8note wrote:
| I'm more interested in mandatory house inspections at a
| regular intervals, rather than as part of a sale.
| homonculus1 wrote:
| Ew, nobody needs more mandatory red tape for their
| private property. Busybodies like you make life a hellish
| nightmare of compliance with crushing systems that bloat
| their way into every facet of life. What you are
| describing is megalomania by slices.
| mh8h wrote:
| The effects of blind bidding on price increase are still not
| very clear. I haven't had a chance to look at the literature,
| but I've been seeing several news articles about this:
| https://www.cbc.ca/news/business/blind-bidding-real-estate-1...
| https://www.ctvnews.ca/business/study-supports-blind-bidding...
| bogomipz wrote:
| Interesting. Is the process for home buying in Canada always
| blind-bidding or is there a regular practice similar to
| Australia where people show up for an in-person public auction?
| richbell wrote:
| I think that blind bidding is a bit of a scape-goat here: the
| problem isn't that the bidding process is blind per se, it's
| the complete lack of transparency. Once a house is sold, the
| price that it sold for AND all bids should be made a matter of
| public record -- accessible without having to pay a ridiculous
| amount of money to view.
|
| Not to mention the ridiculous commission fees for realtors, and
| their well-known practice of "steering" people away from homes
| with lower commission or prices. A practice that is technically
| illegal, but not enforced.
| slg wrote:
| >I think that blind bidding is a bit of a scape-goat here:
|
| Almost everything mentioned in the various comments here is a
| scapegoat. These all might contribute a little to the
| escalating prices at the margins, but they are not the root
| cause.
|
| The root cause is that many capitalist societies have decided
| that purchasing a house is the most expensive and important
| investment most people will make in their lifetime. Therefore
| these societies gradually shape their policies to ensuring
| these investments continue to increase or else there are
| widespread repercussions. The end result is we have
| collectively refused to build enough housing to keep prices
| stable or decreasing. The prices need to go up. I don't
| understand why no one is willing to admit this.
|
| All the other problems originate from this. The reason
| foreigners want to buy homes as speculation or a place to
| park their money is because governments are committed to
| ensuring that housing is a safe and profitable investment. It
| all comes back to us deciding that a basic human need should
| also be an investment that always is increasing in value.
| orangecat wrote:
| Policies that forbid landowners from building housing are
| central planning and the opposite of capitalism.
|
| That aside, this is absolutely correct. It's constantly
| irritating to hear politicians praise "strong housing
| markets" when "strong" means "unaffordable if you're not
| already wealthy".
| imtringued wrote:
| > Policies that forbid landowners from building housing
| are central planning and the opposite of capitalism.
|
| You mean opposite of a free market. Property rights, aka
| the exclusion of other people, is actually an inherent
| part of capitalism. When you think about it, capitalism
| isn't actually about physical capital. It's actually
| about having the rights to be allowed to do things and
| restricting other people's rights while boosting your own
| rights is considered perfectly okay under the guise of
| private property.
|
| When you think about it. We have built a system that
| tells you whether you get to work or not. This is
| completely independent of your ability to work or gain
| skills. It's like a brain cage that tells people they are
| powerless when they really aren't, they just aren't
| allowed to help themselves.
|
| A lot of laws that set a minimum living standard
| basically make it illegal to live. If you are going to
| demand that everyone must meet that bar, then you must
| actually do something to let them achieve it. Instead, we
| just abandon people under the guise of personal
| responsibility.
| 8note wrote:
| acting in a way to get rich off your property is very
| capitalistic, including manipulating policy to raise the
| value of your property
| bennysomething wrote:
| I think the root cause is supply, demand, the salaries of
| buyers, interest rates and multiple of salary for mortgages
| permitted by law.
| katbyte wrote:
| which are all influenced at every level by the desire
| (need?) to keep housing prices high and increasing..
| slg wrote:
| Those are downstream effects of the problem with housing
| being an investment.
|
| We don't want prices to go down so we don't build enough
| supply. The policies that make housing a good investment
| increase demand from speculators and investors above the
| natural need for housing. There are all sorts of
| subsidies that exist to give people more money to buy
| housing instead of trying to make housing actually
| cheaper. Interest rates are a lever the government uses
| to support its political goals which includes increasing
| housing values. It all comes back to the same root cause.
| ipaddr wrote:
| Where are you building these houses in the protected Oak
| Ridges Moran? Building requires space to begin with.
| slg wrote:
| Canada, famously a country with no free space. Even if
| the problem was a lack of space, building denser is
| always an option and none of the big Canadian cities are
| really overflowing due to population density.
| JacobThreeThree wrote:
| You kid, but 90% of land in Canada is crown land. Nobody
| is allowed to own it.
| slg wrote:
| Which would still leave more land than exists in France,
| Germany, UK, Italy, Japan, and numerous other countries
| with larger populations.
| bennysomething wrote:
| I doubt there is a conspiracy to stop house building,
| there's just planning laws that prevent and slow down
| development. The public want to two contradictory things,
| homes their children can afford and banning anything that
| could reduce their house price. Hence politicians look
| for scape goats like foreign Investors. Two conservative
| governments in the uk have tried to simplify planning law
| , and failed. We try all sorts of hacks like "affordable
| housing" legislation. The fact is, we make it hard to
| build where demand is greatest.
| BurningFrog wrote:
| I almost agree, but I think you've got the causality
| backwards.
|
| > _The end result is we have collectively refused to build
| enough housing to keep prices stable or decreasing_
|
| This is not the _result_ of a hushed down societal
| decision. The refusal to allow housing construction the
| _cause_ of the ever increasing prices. As so often, it
| comes down to basic microeconomics: If you limit supply
| while demand rises, prices will constantly go up.
|
| I do agree that foreigners, like anyone else, buy homes as
| speculation because they're guaranteed to increase in
| value.
| slg wrote:
| >This is not the result of a hushed down societal
| decision. The refusal to allow housing construction the
| cause of the ever increasing prices.
|
| And what would you say is the cause for that? I would
| generally say it is people trying to protect their
| existing investments in housing.
| BurningFrog wrote:
| Sure. The question is why they didn't do that until
| ~1970, which is when I think that era started.
|
| It sounds crazy today, but the vastly poorer US society
| of 1960 supplied pretty everyone with an indoor place to
| sleep and call home.
| seanmcdirmid wrote:
| That isn't true. The housing projects of Lyndon Johnson's
| Great Society poverty reduction efforts didn't start
| until mid decade. Before that, you could infer that there
| was an actual need for it (even though it ultimately
| failed).
| slg wrote:
| >Sure. The question is why they didn't do that until
| ~1970, which is when I think that era started.
|
| I'm American so I can't speak to the specifics of what
| happened in Canada, but I imagine it is similar to what
| happened in the US.
|
| It is all related to the post-war suburbanization of the
| population. In the early part of the 20th century,
| homeownership rates in the US were in the 40% range. By
| the 70s it jumped to roughly 65%. Large swaths of the
| population went from being lifelong renters in cities to
| buying single family homes in the suburbs. Owning a home
| became a symbol of American middle-class life and the
| government both supported and encouraged this transition.
| Obviously a constituency that makes up 65% of the
| population is going to see more political power than one
| that only makes up 45% of the population.
| imtringued wrote:
| Actually, Germany ran a very successful public housing
| program after the 70s. It's pretty recent that the
| government basically sold their properties for pennies
| and now everything is getting more expensive because
| nobody is building anymore.
| FpUser wrote:
| >"The prices need to go up. I don't understand why no one
| is willing to admit this."
|
| No, rather somebody at the top needs to go down.
| rank0 wrote:
| Speculation isn't great, but let's not pretend this is some
| elaborate scheme orchestrated by all the homeowners.
|
| If it's feasible and profitable to build new homes, then
| developers will do so.
|
| Everyone loves the simple solution of "build more houses".
| Very few actually consider the execution of the master
| plan. What would it take for you to start building homes?
| It's an enormous risk, requires tons of upfront capital,
| specialized labor and supplies.
|
| When everyone wants to live in the same areas, housing
| prices go up. Lifting zoning restrictions isn't some magic
| bullet that will alleviate that fact.
| slg wrote:
| I never said it was an "elaborate scheme orchestrated by
| all the homeowners." It is a natural result of people
| independently acting purely based on their personal
| incentives.
|
| Homeowners don't need to orchestrate and elaborate
| scheme, they just vote for the politicians who will
| prioritize increasing home values because that will help
| them financially. That politician will enact policies
| favorable to homeowners because that is what their
| constituency wants. That will encourage more people to
| become homeowners because people see homeownership as a
| financially beneficial endeavor. That will increase the
| power of homeowners as a constituency which will lead to
| more politicians courting homeowners with favorable
| policies making homeownership more attractive. And on and
| on the cycle goes until it isn't "feasible and profitable
| to build new homes" because we have made it difficult and
| expensive through all our pro-homeowner policies.
| rank0 wrote:
| > Homeowners don't need to orchestrate and elaborate
| scheme, they just vote for the politicians who will
| prioritize increasing home values because that will help
| them financially.
|
| Or y'know...maybe homeowners don't want to have their
| neighborhood become overcrowded. Not everyone wants to
| live in a megacity with traffic, air pollution, constant
| bustle, and restricted personal liberty.
|
| If financial gain is your only motive as a homeowner, you
| would actually WANT an increase in density. As you cram
| more people into a smaller space, the land underneath
| becomes more valuable. Increased density attracts
| amenities, restaurants, businesses, nightlife...etc, all
| of which raise the value of your property.
|
| Homeowners care about things other than net worth.
| slg wrote:
| >Or y'know...maybe homeowners don't want to have their
| neighborhood become overcrowded.
|
| Nothing I said here is specific to neighborhoods. It also
| applies at the city, state/province, and national level.
| A homeowner in San Diego likely doesn't care about the
| density of various neighborhood in San Francisco. But
| they might still vote for Prop 13 which put harsh
| limitations on property taxes in the state and in turn
| increased the value of homeownership and the cost of
| housing. That decision has nothing to do with personal
| preferences of what type of neighborhood in which people
| want to live. It is purely homeowners being powerful
| enough to vote themselves tax breaks which makes
| homeownership more attractive which makes homeowners more
| powerful...
| rank0 wrote:
| Prop 13 is intended to protect homeowners from being
| gentrified out of their residence. Even if I think it's
| backfired, I understand the motivation. I would be livid
| if I was a lifelong CA resident and suddenly could no
| longer afford my lax liabilities as a result of
| demand/speculation.
|
| This is just one piece of the puzzle, and frankly its a
| bit much to chalk it all up to power/greed. Again, if CA
| homeowners make up the majority of voters what exactly is
| the alternative?
|
| If I'm being honest, my opinion on CA housing markets
| means nothing...but it seems pretty sensible to me that
| when a shitload of people all want to live in a handful
| of cities, prices HAVE TO increase. Removing prop 13 and
| zoning restrictions isn't going to double the housing
| supply.
|
| On a semi-related note, pretty much everything in CA is
| more expensive. The residents there vote for expensive
| public services and legislation. When everything is more
| expensive, you bet your sweet ass houses will be as well.
| richbell wrote:
| > What would it take for you to start building homes?
| It's an enormous risk, requires tons of upfront capital,
| specialized labor and supplies.
|
| There's also no incentive to build affordable or well-
| constructed homes. Many builders will try to maximize
| profit by investing the bare minimum (i.e., cutting
| corners) and creating the largest number of dwellings
| possible. Mattamy Homes is infamous for developing large
| neighborhoods with pretty homes that practically fall
| apart in a matter of months if you look at them wrong.
| rank0 wrote:
| > There's also no incentive to build affordable or well-
| constructed homes.
|
| This is sort of my point. Who's going to build the
| "affordable housing"? Why won't the affordable housing
| get snatched up by the highest bidder?
|
| The federal government already spends way more than it
| can afford. State/local governments don't have anywhere
| near enough tax revenue. It would require a multi-
| trillion dollar operation to increase supply enough to
| offset shortages.
| imtringued wrote:
| > Speculation isn't great, but let's not pretend this is
| some elaborate scheme orchestrated by all the homeowners.
|
| No, but real estate companies wouldn't be able to lower
| property taxes alone. It's only happening once there is a
| critical mass of homeowners that is voting themselves a
| tax cut. Large real estate companies get exactly the same
| tax cut and since they have more property they benefit
| more than the average homeowner. One could have a tax cut
| for owner occupied housing but no, there is no limit to
| the tax cut. Everyone including billionaires gets it.
| That's incredibly unfair.
| rank0 wrote:
| If most voters are homeowners then what exactly do we
| expect? Of course they're going to push for lower
| property taxes...maybe homeowners feel that their money
| already gets taxed 5+ times before they can spend it on
| their literal shelter. Most folks effectively work for
| the government 4 months/yr AND owning property requires
| another annual fee to the tax man.
|
| High property taxes hurt renters too. Rent prices
| increase to cover the difference.
| Spooky23 wrote:
| There's never _a_ root reason.
|
| But because real estate agents are middlemen in the process,
| there's an incentive in a hot market to not act as an honest
| broker.
|
| When the market isn't "hot", a realtor has an interest to
| move quickly. When the market is hot, they have incentive to
| move their own listings so they get both sides of the
| commission. In my case circa 2005, I bid $50k over list via
| the broker who was managing my home sale. The selling broker
| "lost" the bid somehow and sold it for $20k over listing
| price.
|
| 7% of 20,000 is close to 3% of 50,000. But... I came to learn
| later that the selling agent targeted a particular religious
| community hard, and did a hard sell on insurance, inspection,
| and even attorneys to buyers, and frequently yielded another
| 3-5% based on "spiffs" from those providers.
|
| All of these inefficiencies and bad behavior add up and
| inflate prices.
| SOLAR_FIELDS wrote:
| For the record dual agency is actually illegal in some
| places: https://www.homelight.com/blog/dual-agency-is-
| illegal-in-som...
|
| Though I will point out that in most of the jurisdictions
| in the link provided, there's nothing that prevents your
| scenario - a third party offer is turned down due to the
| dual agency bid being favored by the sellers because they
| never received your bid. Only in Colorado, Florida or
| Kansas is it explicitly prohibited. But at least if it was
| in one of the other states that requires disclosure
| (Alaska, Maryland, Texas, Vermont, Wyoming) the sellers
| would have at least been aware of a possible conflict of
| interest and may not have entered into a contract because
| of it.
| Spooky23 wrote:
| Totally get that what the other guy did wasn't illegal in
| my state. The thing that bothers me is that as
| salespeople, real estate agents can deploy all sorts of
| fluffery and bamboozle people who believe their "agents"
| are acting in their interest.
|
| Of course the reality is that there is very little
| governing their conduct and behavior. Without a
| functional "exchange" or disclosure rules, both buyer and
| seller are dependent on good faith.
| imposterr wrote:
| In some provinces, the sold data is at least available. It
| definitely helps get a feel for what one can expect to pay in
| a given neighborhood.
| richbell wrote:
| While the sold data is useful, it doesn't capture nuances
| like "this house sold for 200k over asking and 175k over
| other bids because the buyer's agent mislead them and they
| were scared to lose." Often times a single large sale sets
| the bar for all future sales in the area; Zillow is a good
| example of how merely going off the sale history can
| quickly drive up prices.
| jackyinger wrote:
| The lack of transparency makes these deals ripe for fraud. I
| have heard anecdotes from people I trust of their realtor
| offering to generate a fake offer (by soliciting one from a
| third party) to drive up the escalation clause.
|
| Where there is money and little oversight there is bound to
| be fraud. It grinds my gears to think about this because I
| bought a house and the escalation clause went to the maximum.
| Now do you think that was purely coincidence?
| josho wrote:
| If you have a good realtor they will confirm the competing
| offer exists.
|
| Eg. my realtor called up the selling realtor and asked for
| the name of the realtor that submitted a competing offer.
| My realtor called the competing realtor to confirm they had
| a client that submitted an offer.
|
| Yes, of course the two other realtors could conspire
| together. But, now instead of one dodgy realtor you have 2
| and the probabilities go down further.
|
| Is there fraud, I'm sure there is. But, I don't think it's
| a significant factor in the market.
| Spivak wrote:
| Escalation clauses are dumb anyway. If you tell me "I'm
| willing to pay you up to 100k for your house" then my offer
| just became $100k.
| lotsofpulp wrote:
| You can require proof of competing offers in your
| escalation clause.
| lupire wrote:
| Bidding is a total red herring. Bid what you value the
| property. Go low if you have patience. If you aren't the best
| bid, look somewhere else.
|
| Steering is a problem.
| kazinator wrote:
| > This is such a huge deal.
|
| Probably, less than people think. Sealed bid auctions do not
| increase revenue to the seller, according to auction theory.
|
| https://en.wikipedia.org/wiki/Revenue_equivalence
|
| > gives all of the information to one side (the sellers)
|
| Well, not all the information; just what other people are
| bidding. But all that matters to the bidder is that that other
| bidders do not have access to more information.
|
| The fact that someone's bid is higher than yours, so that you
| lost, is not caused by its temporary secrecy.
| bennysomething wrote:
| This is an interesting question, what is worse for buyers,
| blind or open bids?
|
| Blinds bids prevent bidding wars. They use them in Scotland.
| Not sure if buyer or seller is better off using them.
| thethimble wrote:
| Also another interesting dynamic is that bids can't simply be
| compared by headline price. There's so many other factors to
| consider in a bid: contingencies, time to close, reliance on
| a lender, likelihood of close, etc.
|
| I don't see how a blind system can take those factors into
| account to algorithmically select a single winning bid.
| robocat wrote:
| It isn't done algorithmically.
|
| Often the best bid is obvious - for example an
| unconditional offer at the highest bid. Sometimes the best
| bid is not so obvious, and the vendor chooses the bid that
| suits their situation the best, or they renegotiate price
| or conditions with the highest bidding buyer(s).
|
| A vendor that doesn't really need to sell and that believes
| prices are still rising, might accept a high price with a
| long settling date, or other conditions that might cause
| the sale to fall through.
|
| A vendor than desperately needs the money might accept a
| lower price with immediate settlement, or if they know
| their house has problems they will accept a lower bid if it
| reduces their future liabilities (e.g. zero inspection, as-
| is clauses, etcetera).
| jefftk wrote:
| _> Not sure if buyer or seller is better off using them._
|
| There's a theorem an auction design that says that, under
| some vaguely reasonable assumptions about bidder information,
| it doesn't matter what form you use for the auction. Open
| auction, sealed auction, even second price auction should all
| give the same winner and same final price: https://en.wikiped
| ia.org/wiki/Vickrey_auction#:~:text=Revenu...
| Beldin wrote:
| That's not entirely correct. The theorem says that in
| Vickrey auctions (sealed bid 2nd price), each bidder's
| optimal strategy is to bid their actual valuation of the
| auctioned object.
|
| It doesn't work with open bidding, because then you could
| bid artificially much as long as the 2nd highest bid was at
| your real valuation or below.
| bennysomething wrote:
| Is there anything in game theory related to this? (Very
| naive question, so probably not)
|
| But yes my intuition when selling my house was "surely
| I'd get more if this was open bids"
| jefftk wrote:
| Sorry, that's not the theorem I'm referencing. See the
| section "Revenue equivalence of the Vickrey auction and
| sealed first price auction".
|
| (Or https://en.wikipedia.org/wiki/Revenue_equivalence)
| CountSessine wrote:
| You're fighting scarcity. You still won't win the bidding war -
| it just won't be as one-sided.
|
| Stop championing scarcity by blaming scapegoats. Either we
| limit Canada's crazy-high immigration rate (1% of population
| every year) or we build more homes which is mostly gated by
| illiberal zoning laws passed by municipalities. But both of
| these policies are very popular so you'll be swimming upstream,
| politically.
|
| While you're at it, you could go after other wildly popular
| policies that lead to high housing prices, like the primary
| homeowner capital gains tax exemption (probably, by value, the
| biggest tax dodge in the industrialized world), and Canadian
| cities' extremely low property tax rates (0.3% of assessed
| value in Vancouver, for example).
| kbenson wrote:
| > You're fighting scarcity.
|
| No, they're fighting market inefficiency. A free market
| requires accurate and timely information to be efficient.
| This is literally people putting constraints on the market
| for what they are selling so the information is not available
| to one side, and the price is inflated.
|
| A rational actor should walk away from a system like this,
| but if that's all that's available around you because of
| scarcity, you're forced to work at a disadvantage.
|
| Banning this is akin to banning other anticomptitive
| behavior, such as collusion and monopolies. That is, it's up
| to the government to decide whether the harm outweighs the
| problems regulation introduces (regulation always introduces
| some level of friction and problems, you just hope to
| minimize them and maximize the benefits it brings) and is
| thus worth pursuing.
| LimaBearz wrote:
| Is it so far fetched to assume some realtors may be juicing
| the bidding to increase their own commission and to make
| their firm more uhh "prestigious" by being able to drive up
| the price for their own marketing purposes further down the
| line.
|
| Likewise if you dont know who you're bidding against, how do
| you even know the bidder is even real (foreign or not)?
| Transparency is good thing.
|
| While there may be some "scarcity" not having full
| transparency and realtors not in alignment with their own
| clients needs is a step in the right direction.
|
| (I use scare quotes here because while I know we're not
| building enough but the current market has a fair share of
| retail speculation, institutional investors inflating prices,
| and homes held as purely places to mark money(non-owner
| occupied). Scarcity is real and building does need to happen,
| but thats slow and expensive. Millions of homes are kept
| empty or as poor speculative investments and thats a problem)
| AzzieElbab wrote:
| Lets see. Assume I am a realtor, I earn outrageous
| commissions of 2.5%. Does it make sense for me to jack up
| price of 1M condo by say 15% above the market and spend a
| month trying to sell it or to lower the price by 10% below
| and possibly sell two similar properties in the same month?
| Valgrim wrote:
| But every house that is on the market IS being sold, even
| at outrageous price, because buyers don't believe the
| price hike will slow down anytime soon (why would they?
| this segment of the market is guaranteed to be protected
| by any government who wishes to get re-elected)
|
| So you, the realtor, will sell every house you got
| anyway, so why not bump the price while you're at it?
| AzzieElbab wrote:
| that is classic cause and effect. realtors are just
| tagging along. I bet even if they make realtors accept
| second highest price instead of first(aka google adds)
| the impact would be minimal overall
| cpwright wrote:
| It isn't the Realtor accepting the price, it is the
| owner. At least in my state they are obligated to present
| every offer. Price is not the only dimension to factor in
| either. Just off the top of my head: (1) inspection
| contingency (2) mortgage contingency (or how much to make
| up for the appraisal) (3) timing for closing (4) lease
| back option
|
| Can all affect what you would select, not just the price.
| CountSessine wrote:
| _Is it so far fetched to assume some realtors may be
| juicing the bidding to..._
|
| Of course not, and I didn't say that I'm completely against
| reforming the real estate industry and the bidding process.
| But it won't fix expensive housing.
|
| It's all bullsh*t if it doesn't address scarcity. In 2016
| we had had 10 years of 2% population growth in Vancouver
| and 1.2% housing stock growth and we wanted to blame
| foreign investors, so we enacted the foreign-buyers tax.
| That was going to fix high housing prices.
|
| In 2017 we all got angry about dirty money and our casinos
| being used as money-laundromats so we commissioned the
| German report to detail what was going on and surely that
| would show that real estate was expensive because of money-
| laundering. It said prices might have gone up by 6% because
| of money-laundering. So that's 6% of 400%.
|
| In 2021 we started talking about investors driving up the
| cost of housing, ignoring the fact that investors typically
| become landlords and in cities with rental vacancy rates
| hovering around 1% (Vancouver's was 0.4% in 2017!!!), that
| sounds like a _good_ thing.
|
| It's all bullsh*t and it's all a distraction that let's us
| ignore scarcity. I've decided that no matter how justified
| that housing reform is (ie open-bidding), I refuse to
| support it before we deal with scarcity because we'll deal
| with open-bidding and then say, "Ok ... let's see where we
| are in 3 years time now that we've fixed that!"
|
| Deal with scarcity or f*ck off with talk about housing
| prices. Don't expect me to validate your cognitive
| dissonance.
| LimaBearz wrote:
| Well I share your feelings toward the whole situation for
| sure but I'm not sure that just building more will do
| much of anything. As long as we have folks buying with
| the intention of parking money or using homes as an
| "investment" you're going to have competition with much
| deeper pockets.
|
| This outside competition detaches local prices from the
| local economy. Likewise the speculation sets an
| anchor(comp) for neighboring homes when they go to sell.
| One investor overpaying by say 100K.. well now next month
| if Average Joe wants to sell he can now ask the same or
| more. Rinse and repeat just a few times and you get to
| where we are today.
| CountSessine wrote:
| _...but I 'm not sure that just building more will do
| much of anything_
|
| <sigh>
|
| _As long as we have folks buying with the intention of
| parking money or using homes as an "investment" you're
| going to have competition with much deeper pockets_
|
| Why do you think foreign investors want to overpay for a
| Vancouver Special? And what do they do with it once they
| buy it?
|
| Do they live in it? If so, what you're upset about is
| population growth. Sounds like scarcity!
|
| Do they rent it out? If so, that's a social good in a
| city with a 1% rental vacancy rate and sky-high rents are
| as bad as high housing prices. Sacrificing the rental
| market to save home-buyers sounds like scarcity!
|
| Do those foreign investors leave the house empty? Who
| cares if we can just build more? And we know (https://doo
| dles.mountainmath.ca/blog/2022/02/14/unoccupied-c...)
| that Vancouver doesn't seem to have more empty homes than
| most cities it's size. But of course we can't "just build
| more". Scarcity!
|
| The truth is that we've seen developers market condo pre-
| sales in China playing-up the region's dysfunctions -
| pointing out our 2% population growth rate and the
| difficulty in building new housing. Investors come to
| Vancouver because they know the game is rigged - they
| know that housing prices are mostly one-sided and hedged
| by political interference. Canada's real estate is "too-
| big-to-fail" and is mostly up-side.
|
| Don't talk to me about housing prices unless you deal
| with scarcity.
| Majromax wrote:
| > Do those foreign investors leave the house empty? Who
| cares if we can just build more?
|
| I'll note here that there is a legitimate complaint to
| vacant housing. Some expensive city infrastructure like
| transit is supported by people-density rather than house-
| density, so a community of empty homes doesn't justify a
| subway line in the way that a bustling, lived-in
| community would.
|
| Municipal funding that comes from the provincial level is
| also supported implicitly by income and sales (value-
| added) taxes rather than property taxes, so empty homes
| can easily create an imbalance of cost and revenue. The
| same also goes for cases of alleged tax evasion, where
| one globe-trotting patriarch supports their live-in
| family without declaring and paying Canadian taxes on
| income as a resident.
| djbebs wrote:
| There is no legitimate complaint about empty housing, not
| just because empty houses pay the same tax as occupied
| ones, but because empty housing is a myth.
| voisin wrote:
| Empty housing is a myth? Please explain.
| paulmd wrote:
| > not just because empty houses pay the same tax as
| occupied ones
|
| you've literally just responded to a post demonstrating
| that this is not the case, please don't just do template
| rants off keywords
| standeven wrote:
| I agree that scarcity is the main issue, but how do you
| address it in a city like Vancouver? There's no more land
| and downtown is dense. Make artificial islands? Deforest
| the mountainsides and build on 40 degree slopes? Replace
| local farms with subdivisions?
| ska wrote:
| Unless things have changed radically since I was last
| there, downtown is mostly not dense.
|
| But even if it were, it wouldn't solve the real problem
| in these north american cities, which is the "missing
| middle".
|
| The model of small area of highly dense towers aimed at
| 20-something urbanites with no kids surrounded by spaced
| out single family homes with a yard is just fundamentally
| unworkable at any real scale.
|
| If Vancouver wants to solve it's problem and not become a
| suburban/exurban sprawl (typical failure mode these days
| in north american growth) it's going to have to build a
| whole bunch of mid density housing near to downtown, and
| it's mostly going to have to build that on top of areas
| that are currently full of single family detached. This
| is not going to make current denizens of those "nice
| neighbourhoods" happy, naturally.
| vkou wrote:
| Vancouver downtown (In large part, thanks to the west
| end) is incredibly dense. 23,838 people/km2 - the same
| density as Manhattan.
|
| Once you leave the penninsula, though, it's surrounded by
| a lot of suburban sprawl, with small pockets of density
| around the SkyTrain stations. Unlike most North American
| cities, though, at least it _has_ those pockets of
| density!
| hello_moto wrote:
| > it's mostly going to have to build that on top of areas
| that are currently full of single family detached. This
| is not going to make current denizens of those "nice
| neighbourhoods" happy, naturally.
|
| They're not happy with megatowers. They're ok with
| missing middle (townhouses).
|
| There is a whole stretch of roads being bought out and
| converted to missing middle that leads to downtown. (Oak,
| Cambie).
| CountSessine wrote:
| As a developer, why can't I buy 5 or 6 detached houses,
| tear them down, and build row-houses/town-houses on the
| site? I could house 3x as many families and charge a lot
| more than 1/3 the price for those homes. Why can't I do
| that? That is an unalloyed good in 2022 with the
| benchmark home price in Vancouver approaching $2 million.
| It would make me money and it would be a tremendous
| social good.
|
| I can't do it because it's illegal, that's why. And I
| would have to go to city council to have them change the
| law (rezone the land). And the neighbors will campaign
| against me and argue against density. I own the land - I
| paid good money for it and it's mine in every sense of
| the word, but the neighbors will argue that their
| preferences and whims outweigh both _my property rights_
| and the rights of other Canadians to have a home.
| FerociousTimes wrote:
| To summarize, you argue that it's a supply-side problem
| and not a demand-side one.
| CountSessine wrote:
| _To summarize, you argue that it 's a supply-side problem
| and not a demand-side one._
|
| That is not an accurate summary. Earlier...
|
| _Either we limit Canada 's crazy-high immigration rate
| (1% of population every year) or we build more homes
| which is mostly gated by illiberal zoning laws passed by
| municipalities. But both of these policies are very
| popular so you'll be swimming upstream, politically_
| darkwizard42 wrote:
| It has always been but people who vote (homeowners) have
| a vested interest to shape the narrative to be a demand-
| side problem.
|
| The only loss when building more dense housing in urban
| areas is the existing owners whose views are blocked.
| Otherwise it seems to generally increase the tax base,
| support more businesses (when mixed-use housing is
| built), and increase renter mobility.
| hello_popppet wrote:
| The people writing the laws are all about the scarcity,
| and they aren't on HN and you can't take any shots at
| them or tell them to f*ck off. They've gotten this far by
| diligently min maxing and if you think they are going to
| have a change of heart, you're way off base.
| CountSessine wrote:
| You've mistaken me for someone who thinks there's a
| political needle that can be threaded here.
|
| I completely agree with you - housing prices are high,
| mechanically, because of scarcity. But scarcity exists
| because voters like high housing prices. The truth is
| that most Canadians own property and are perfectly happy
| with their $1-3 million in equity. And regardless of
| their stated preferences for affordable housing, the
| revealed preference for scarcity and expensive housing is
| clear.
|
| All I want is to shut down people looking for someone to
| validate their cognitive dissonance.
| Afton wrote:
| Having grown up poor, I was going to challenge the
| statement that 'most Canadians own property', but it
| looks like it's ~70%.
|
| I mean, I think hanging 30% of your population out to dry
| is a bad idea, but I can't argue that this isn't a
| tyranny of the majority situation (or maybe tyranny of
| those in power, of which I expect closer to 100% are
| property owners).
| voisin wrote:
| Jack up interest rates (or qualifying rates) and demand
| plummets, particularly among multi unit investors. That
| should help scarcity.
| stjohnswarts wrote:
| If you cut off foreign buyers then you absolutely will have
| cut out some competition for the purchase so I don'd see how
| you can possibly say what you're saying? I mean it's a basic
| economics principle.
| hello_moto wrote:
| Might not move the needle.
|
| Plus there are a few stories of rich int'l students
| eventually becoming PR holder and get their monies from
| parents.
| vkou wrote:
| 1%/year is not a crazy-high rate, considering that Canadian
| fertility is below replacement.
|
| If the country can't figure out how to deal with a population
| growth of ~1%/year, the problem is not the growth, the
| problem is somewhere else.
| imtringued wrote:
| The problem is the allocation of jobs in a handful of city
| centers.
| vkou wrote:
| Then it sounds like the obvious solution is to ban rural
| people from moving into the cities!
|
| ... Or build more.
| [deleted]
| ch4s3 wrote:
| > Stop championing scarcity by blaming scapegoats. Either we
| limit Canada's crazy-high immigration rate (1% of population
| every year) or we build more homes which is mostly gated by
| illiberal zoning laws passed by municipalities. But both of
| these policies are very popular so you'll be swimming
| upstream, politically.
|
| I'm all for building more houses in cities/high demand areas,
| but doesn't Canada only have a population growth rate of
| around 1%/yr? It seems like you could easily build your way
| past that without giving up the advantages of immigration and
| a little population growth.
| paconbork wrote:
| >doesn't Canada only have a population growth rate of
| around 1%/yr? It seems like you could easily build your way
| past that without giving up the advantages of immigration
| and a little population growth.
|
| You would think that wouldn't be too hard, but housing
| construction in Canada has been seriously lagging even at a
| countrywide level[1] with housing units per capita
| continuing to trend downward. And then of course it doesn't
| help if major metros see population growth rates faster
| than this.
|
| [1] https://dailyhive.com/vancouver/canada-new-housing-
| populatio...
| michael1999 wrote:
| Canada is a big country. But immigration goes where the
| jobs are, and those are concentrated in 3-5 large cities
| which are hitting the limits of sprawl (congested highway
| commute time) and geography (water and mountains).
|
| Densification is unpopular with existing municipal voters,
| and bankrupting CPP would be unpopular with federal voters.
| definitelyhuman wrote:
| Waterloo region is building density, despite complaints
| (1), because there's no supply. People claim to want all
| of: affordable housing, no sprawl, no community impact -
| but that's not possible. Glad they prioritized units,
| although a lot are still condos which are not quite
| 'affordable', but the supply will help
|
| (1) https://www.cbc.ca/news/canada/kitchener-
| waterloo/belmont-vi...
| 52-6F-62 wrote:
| Densification is absolutely _not_ unpopular with
| municipal voters!
|
| My current city, Hamilton, is currently fighting with the
| Ontario government over this matter. The mayor is a
| regular feature on the local news and speaks to that
| often.
|
| Their major push is for _more_ density and resources for
| urban development. The provincial government has pushed
| for developing in Ontario 's green belt and watershed
| instead. They've faced _massive_ backlash over that to
| the point where they had to capitulate in some cases.
|
| The current provincial government is the one pushing for
| downtown to be filled with parking lots and low-density
| housing developed outward. They're also responsible for
| nixing various transit and green power initiatives in
| favour of highway expansion. It's infuriating.
| wk_end wrote:
| Everywhere is different. Hamilton may be in favour of
| densification - I wouldn't know - but even in Toronto,
| where I'm from, there's endless pushback against
| densifying the single family homes that dominate much of
| the city. Right now I live in Victoria, and although many
| people and groups (including the mayor and the province)
| are pro-development, there's a loud contingent of
| busybodies here who oppose literally any change or
| construction project whatsoever.
| johndubchak wrote:
| That doesn't only exist in Victoria and that busy-body
| group isn't only about building and housing. They are
| active against many things. I live in California and they
| complain about people walking down the street, water
| restrictions, lifting water restrictions, cleaning your
| driveway with water, not being able to use water, it goes
| on and on.
|
| It does touch on building, but it's mostly about, "NOT IN
| MY BACKYARD!"
| chaostheory wrote:
| There's a certain street in SF across from a shopping
| mall where there are fatal accidents involving
| pedestrians every year. Consequently, the city planned on
| building a crosswalk. Well, the NIMBYS blocked it because
| it would ruin their view.
| paulhart wrote:
| Fellow Hamiltonian here...
|
| Council wasn't for intensification until they got the
| results of the poll back (and even then, the likes of
| Ferguson continue to be aghast at the idea of not being
| in the pockets of suburban developers).
|
| We can see that with the kneejerk response to Bill 109,
| and the fact that only one Secondary Housing Unit has
| been approved by the city so far, the rest denied for
| what seem like vague reasons that won't hold up at OLT.
| 52-6F-62 wrote:
| Man, that gets hard to swallow. Especially seeing old
| photos of Hamilton. I grew up nearby and for as long as
| I've been alive it's been large swathes of parking lots.
| There's still so much promise, but old downtown looked so
| much more _alive_ before the sprawl took over.
| edgyquant wrote:
| Can they not move to nearby cities and commute?
| techsupporter wrote:
| No, that's what the person you replied to mean when they
| wrote:
|
| > hitting the limits of sprawl (congested highway commute
| time)
|
| There's only so far you can bus, train, drive, bike,
| walk, seaplane, helicopter, hyperloop, or transporter in
| to go to work. Canadian cities are, just like cities in
| the US, hitting this limit rather aggressively.
|
| In cities where sprawl isn't physically prohibitive, like
| Calgary or Toronto, the upper bound of "this shit ain't
| worth it" for time and money is a limiting factor. I know
| someone who commutes from Kitchener to Toronto on GO, so
| they don't even have to put up with driving, and they're
| debating moving back home to Winnipeg for a 40% salary
| cut just to not have to put up with it any more.
|
| Remote work might help with this but even there, you have
| people who are moving "a little further out" but not
| leaving the region because they want to stay nearby for
| other reasons (or because they're not entirely convinced
| that full remote is actually on the table long term).
| cameronh90 wrote:
| > There's only so far you can bus, train, drive, bike,
| walk, seaplane, helicopter, hyperloop, or transporter in
| to go to work. Canadian cities are, just like cities in
| the US, hitting this limit rather aggressively.
|
| Canada's largest urban area is 5.6 million people.
| London, Paris and Seoul are around double that, NYC is 19
| million and Tokyo is 37 million.
|
| Why are Canadian cities hitting this limit at such a
| comparatively low population compared to other cities in
| the world? Why are all the major cities in the western
| world seemingly hitting this limit at the same time, even
| though they all have different populations?
|
| It seems to me that we've just become less aggressive at
| building the infrastructure necessary to support
| population growth.
| ashtonkem wrote:
| > Why are all the major cities in the western world
| seemingly hitting this limit at the same time, even
| though they all have different populations?
|
| I can't speak for Canada, but in America the answer is
| always cars. Car based transit is wildly land
| inefficient, and the main reason why all car based cities
| hit their limit at the same time.
|
| In particular there are two huge shortcomings with cars
| in urban design:
|
| 1. Parking eats up a huge amount of space. Either you let
| that drive density way down (which means commutes get
| longer) or you build underground parking at exorbitant
| prices driving up rents. Even in the latter case the
| roads _around_ housing ends up becoming an issue,
| limiting density far below what you'd expect in say,
| Paris on Chicago.
|
| 2. Car transit to a shared destination is almost
| comically inefficient, which is really noticeable when
| people try and commute via car to job centers. This
| wouldn't be as bad if we restricted cars to what they're
| good at, such as driving _away_ from the city, but most
| American cities have the unique psychosis of demanding
| that transit into the city center be via car. This does
| not scale, and is why places with wildly different zoning
| laws can have equally hellish commutes.
|
| The issue is not that we can't build, we're really good
| at adding more highway lanes, it's more that we are
| monomaniacally focused on building the wrong things.
| Melatonic wrote:
| Isn't this more a limit of dense (taller) housing?
|
| If we had much more housing in tall buildings near where
| people worked then they either would not need a car or
| would at least not need to drive their car to work. You
| still of course need to provide parking but tall parking
| garages can solve that as well (or underground).
|
| Seems like tons of cars are the symptom of the problem
| here not the cause
| exfascist wrote:
| So I hate driving and actually moved to DC for work and
| also partly for the transit. Here's what I found:
|
| 1) Taking the metro many places (for example, from my
| apartment in an urban "luxury" apartment building a
| couple blocks from the initial station to my boat near
| the waterfront in downtown DC) _doubled_ the time it took
| to get there. It was actually faster to drive there even
| during rush hour where you 'll sit motionless on the 395
| bridge. Yes I can redeem a lot of that time with my above
| average personal mobile computing set up but a: most
| people have a pretty mediocre personal mobile computing
| setup and b: now I can't use that time for anything other
| than programming projects.
|
| 2) I couldn't get rid of the car entirely because I still
| needed it to move bulky things that I really can't take
| on transit. It's bad enough not having a truck but losing
| the car entirely would create some serious logistical
| problems on a regular basis. So while I saved some money
| I couldn't save as much as I wanted.
|
| 3) Most wealthy people (many of my friends) start
| families^ and people who can afford it buy detached
| housing for that. You're not going to be taking transit
| to these places. It might not ever be economical. Like it
| or not transit will probably always lower property values
| in the US too. For whatever reason the more violent
| people here tend to take it and anywhere it goes becomes
| more violent so building it into suburbs like these is
| _always_ going to be unpopular.
|
| 4) Bringing me to the fact that I've been accosted
| multiple times on transit by people who were high, drunk,
| or just belligerent. I have an extremely high tolerance
| for this sort of thing (I've wandered around some of the
| more violent cities early in the morning just to see what
| the fuss is about) but I can absolutely see why most
| people here would give up after that happening once at a
| maximum.
|
| I'm a huge fan of transit but pretending it isn't a large
| sacrifice to give up a car is just going to get people to
| ignore you, because it is and for most people it isn't
| worth it.
|
| (^ and for those that don't start families, many have
| lots of intense DIY projects that don't fit in apartment
| buildings and actually _need_ either detached housing or
| industrial space with similar density.)
| ashtonkem wrote:
| > Taking the metro many places (for example, from my
| apartment in an urban "luxury" apartment building to my
| boat near the waterfront in downtown DC) doubled the time
| it took to get there. It was actually faster to drive
| there even during rush hour where you'll sit motionless
| on the 395 bridge.
|
| Depends a lot on where you live and work. My experience
| was the exact opposite in Chicago. Heck, for some of my
| jobs I could outrun car commuters on my bike pretty
| trivially.
|
| One of the clear downsides to transit oriented cities is
| that you do need to pay attention to transit access when
| renting. A unit being "luxury" is no guarantee that it's
| in a convenient place for transit, nor that the trip will
| be short.
|
| > Yes I can redeem a lot of that time with my above
| average personal mobile computing set up
|
| I find the need to make commute time productive quite an
| odd but common impulse. How about just making your
| commute suck less? Reading a book is better than driving
| in traffic.
|
| > I couldn't get rid of the car entirely because I still
| needed it to move bulky things that I really can't take
| on transit.
|
| Again, experience varies. For a lot of people it would be
| cheaper to abandon the car and pay for deliveries when
| necessary.
|
| Regardless, do not let the perfect be the enemy of the
| good. If you relegate your car trips to just when you
| need bulk goods, that is far more efficient than the
| current habit of using a car fo every single trip.
|
| > Most wealthy people (many of my friends) start families
| and people who can afford it buy detached housing for
| that. You're not going to be taking transit to these
| places.
|
| We could, but we've built our infrastructure with the
| opposite assumption in mind. Most other rich countries
| use a mix of regional rail, bus, and cars to solve this
| problem. The issue of "mass transit doesn't go to the
| burbs, therefore I must use a car everywhere for
| everything" is an entirely self inflicted wound.
|
| > Bringing me to the fact that I've been accosted
| multiple times on transit by people who were high, drunk,
| or just belligerent
|
| Maybe we could solve that problem instead? Because that
| seems like a rather silly rationale for designing a
| transit system around.
|
| Also, it's not like all car drivers are sober. In fact, a
| drunk driver is almost certainly a far bigger risk to
| your safety than a belligerent drunk on the train.
|
| > I'm a huge fan of transit but pretending it isn't a
| large sacrifice to give up a car is just going to get
| people to ignore you, because it is and for most people
| it isn't worth it.
|
| It's almost like I'm arguing that we should make public
| transit more convenient than using a car for urban
| transit or something.
| iso1210 wrote:
| > Depends a lot on where you live and work. My experience
| was the exact opposite in Chicago. Heck, for some of my
| jobs I could outrun car commuters on my bike pretty
| trivially.
|
| I got a taxi from Gare du Nord to a hotel on Champs
| Eleyse this evening -- took about 40 minutes to go 2
| miles. That's ridiculous, but it's apparently a thing.
| cameronh90 wrote:
| Almost everything you're saying is a symptom of poor
| investment in public transport. I have no doubt that the
| car works better for your commute, as is the case for
| millions of other people. Unfortunately, stick millions
| of cars on the road and you have a huge bottleneck for
| growing the commuter belt, which means only houses in a
| relatively small area are useful, and they get extremely
| expensive.
|
| Historically, and in some countries still, we solved this
| problem by identifying when it was happening and creating
| new public transport lines for faster commutes and people
| living further out. In the UK, we even developed whole
| "New Towns", upgraded their transport, amenities and
| infrastructure specifically to support shuttling a
| greater number of people into London. They weren't
| particularly inspiring towns, and we still make fun of
| them nearly a century later - but it worked. Even today,
| it's far quicker to take the train into London from those
| towns than it is to drive, as is the case for pretty much
| all suburb to central commuting here.
|
| There are still lots of situations where a car will be
| better (I have one too, in London), but if we can get
| people out of their cars for their commutes, that frees
| cities up to expand and useful houses will become more
| affordable. Driving to the tip or mall is much less of a
| problem.
|
| Regarding the violence and antisocial behaviour, that's
| really a problem of policing and allocation of funding.
| It needn't be that way and it doesn't happen to nearly
| the same extent in the UK and I put that down at least
| partially to the excellent British Transport Police.
| Apparently it used to be violent and dangerous in the 80s
| but we turned it around. Now the train stations are
| mostly far safer than the surrounding environs. If I was
| ever being harassed or attacked, I would run towards the
| station as there would most likely be someone to help me
| there. Living within a few minutes of a train station
| also significantly increases your property value here,
| provided you're not so close that it rattles your bed...
| hnlmorg wrote:
| The problem is you're comparing the commute by public
| transport in the current status quo and missing the point
| that fixing the car culture means improving public
| transport so that it does become more convenient than
| taking the car.
|
| Plenty of European cities have achieved this. I work in
| London and I wouldn't even dream of driving into the
| city. It's far more convenient to get the train.
| exfascist wrote:
| I think you should read my comment a little more
| carefully. 1 and 2 are due to serious physical and
| economic constraints that are very unlikely to change and
| apply to all but the absolute most dense areas. Remember,
| this is in DC. It's unusually dense and is supposed to be
| the best we have. 3 and 4 are additionally due to
| cultural, historical, and demographic problems that are
| becoming _worse_ rather than better and the current
| political situation is working to accelerate it.
|
| I'm not against transit but it's not the solution people
| think it is.
| heavyset_go wrote:
| I'd argue that NYC is not such shining example when it
| comes to commutes or sprawl, either. That particular
| corridor has some of the most traffic and longest commute
| durations in the country.
| cameronh90 wrote:
| Sure but it got to almost 20 million before it hit that
| point, unlike Canadian cities.
|
| There's also only been one subway line opened this
| century.
|
| We seemed to do better at facilitating growth last
| century, particular in the first half. Since then we've
| struggled, mostly for political reasons.
| heavyset_go wrote:
| It hit that point long before it reached a population of
| 20 million.
| jedberg wrote:
| The population isn't the main factor, it's the density
| and percent who commute by car that matter most.
| cameronh90 wrote:
| Indeed, that's what I was alluding to.
|
| Given the right infrastructure, we can probably scale
| cities up to incredible populations.
|
| Instead, we stopped building that infrastructure, and
| everyone started commuting by car. Then we wonder why
| cities are struggling to expand and usefully located
| housing has become so expensive.
|
| We're trying to watch 4K YouTube over 28.8k dialup, and
| wondering why it's buffering all the time.
| bobthepanda wrote:
| They're talking about physical size. North American
| metropolises are a lot less dense than their peers.
|
| The solution is to enable density. Zoning in the US and
| Canada is done at the local level and zoning codes look
| like a list of things you can't do. (You can have a
| house, but you can't live with more than X unmarried
| people, you can have a home office but you can't do
| hairdressing out of your home, etc.)
|
| Zoning codes in Japan are a lot more relaxed, in that
| there are only about a dozen types defined by "maximum
| nuisance level." Every additional level of zoning permits
| all the uses from the previous level as well. Which
| generally increases building capacity and density and
| lowers prices by staying ahead of demand.
| citrusybread wrote:
| Extreme car dependency.
|
| Toronto is suffering from the same problem Dubai has. It
| suddenly became relevant when sovereignists gained power
| in Quebec and the business class were worried about
| Montreal being a liability. So they packed up and went
| down the 401 to Toronto.
|
| It has the infrastructure for a much much smaller city,
| and one in the North American car-driven style (massive
| highways, occasional regional rail that is artificially
| slowed down by regulation, little to no metro service in
| most areas, etc)
|
| Combine with NIMBYs blocking every form of
| intensification, and here we are:
|
| https://www.google.com/maps/@43.6783092,-79.352227,3a,90y
| ,68...
|
| A metro station close to the downtown core. In Tokyo this
| is the kind of development you find on the far side of
| Saitama, bounded by mountains or poor soil. In Toronto,
| this is an area that has suffered population decline, as
| the locals went from having a nuclear family to being 2
| or even 1 empty nesters, being replaced by DINKs.
|
| It gets much, much worse the further out you go.
|
| A lot of the city has a blanket ban on anything more
| dense than a single family detached home.
|
| Just look at the city's size in sqkm. It will never scale
| like this, things need to change and density needs to be
| improved.
|
| All other Ontario cities suffer the same paste-eating
| mentality, especially Ottawa and cities in the GTHA.
| lhorie wrote:
| Personally, I think the problem is more a question of the
| sort of business development that happens downtown vs the
| surrounding areas. If you look, for example, at
| development on highway 7 over the decades, there's
| definitely densification going on, e.g. this area[0] used
| to be farmlands back in the day, but now those red lanes
| are public transit lines and there are condo buildings
| sprouting up along that corridor. All in all, though,
| it's still much sparser than Toronto's downtown core.
|
| But if you look around the area, other than maybe the IBM
| and CGI campuses, a very significant percentage of the
| business development in the area is still big box B2C
| (walmart/home depot/etc) or small-ish businesses. That's
| in stark contrast to areas like the financial district
| where the vast majority of workers are white collar
| office people.
|
| My pet theory is that concentration of white collar work
| is what drives up home prices. Exhibit A: places like
| Palo Alto and Mountain View in the San Francisco Bay Area
| (vs, say, Pacifica or Half Moon Bay) are clearly propped
| up by the presence of FAANG campuses. I'd bet that if a
| Google setup a campus in Ajax, you'd see an appreciable
| increase in demand for housing in surrounding areas that
| are traditionally considered too far from downtown TO
| (e.g. Whitby)
|
| [0] https://www.google.com/maps/@43.842627,-79.3906732,3a
| ,75y,20...
| voisin wrote:
| Car culture. It is insanely inefficient at moving people
| and at land use.
| ashtonkem wrote:
| It's amazing how many downvotes pointing this out gets.
| People have quite the kneejerk reaction when the
| downsides of car transit are pointed out to them.
| ericmay wrote:
| > I know someone who commutes from Kitchener to Toronto
| on GO, so they don't even have to put up with driving,
| and they're debating moving back home to Winnipeg for a
| 40% salary cut just to not have to put up with it any
| more.
|
| Isn't this a good thing in some ways or maybe many/all
| ways? Now wealth is less concentrated in one or a few
| locations. Every dollar not spent commuting is a dollar
| spent at a local coffee shop, or money that goes into the
| tax base of the other city.
| paconbork wrote:
| In theory, yes it would be nice to have the wealth more
| spread out, but jobs aren't concentrated in Toronto just
| for lack of creativity. The agglomeration of talent
| causes firms to be more productive, earn more money, and
| pay employees more. If a company moves to Winnipeg, the
| lose some access to the most productive employees and
| their employees have fewer companies to move to where
| they'll be more productive themselves.
|
| So while you'd be spending a larger percentage of your
| money locally, you'd also be spending less money in
| absolute terms.
| ericmay wrote:
| Yea but paying employees more means they can afford to
| buy more expensive houses. It all fits together.
|
| While I think there's a lot that Canada (and other
| democracies) can do to help reduce housing prices, it's
| almost like a truism that if you have a great city with a
| lot of high paying jobs, getting closer to the city and
| getting access to that city will be expensive. I mean, if
| we were to take what you were saying to heart, why
| doesn't _all_ of Canada move to one city? Clearly there
| are some bounds.
|
| > So while you'd be spending a larger percentage of your
| money locally, you'd also be spending less money in
| absolute terms.
|
| True, but in absolute terms it's cheaper to live where
| you're spending the money as well, which pays for a
| house, etc.
| edgyquant wrote:
| Then shouldn't the government be incentivizing businesses
| (and thus people) populate other cities?
| Majromax wrote:
| That's generally happened. House prices have notably
| increased not just in major cities, but also in smaller
| municipalities within commuting distances of Toronto,
| Vancouver, Ottawa, and Montreal.
|
| Truly "cheap" housing is historically limited to rural
| areas far outside the traditional commuting area of the
| big cities, but the covid shock has put even that in
| question through remote work. Even though a small number
| of people in absolute terms are moving to rural areas
| (with sufficient Internet infrastructure, etc), that
| still can represent a large relative demand increase.
|
| Some of this will probably shake out over the next few
| years as construction catches up where it can, but that's
| cold comfort to younger families on the market today.
| armagon wrote:
| Goodness, I live in a rural area, and the house prices
| are only insane, instead of egregiously insane. I don't
| know how I'd afford a home for a young family if I was
| just starting out today.
| voisin wrote:
| I concur with this. The story of insane housing prices
| being limited to TO and Vancouver is a 2016 story. Since
| the pandemic, it has hit ever podunk town in the country.
| Look at rural Nova Scotia and New Brunswick for evidence.
| Same price increases on a percentage basis as in
| significantly more populated areas.
|
| It's interest rates!
| qball wrote:
| Well, they thought of that; it's just as expensive out
| there too.
|
| If you want a house and a job in this country, you have
| to go to Alberta, Saskatchewan, or Manitoba. BC has no
| land and is either mountain or agricultural land reserve
| (the second-largest city in the province has massive
| fields in the middle of it; average single family home
| price $1M). ON and QC are similarly boxed in for land
| (the Canadian Shield is very difficult to build on, and
| if you don't know French the only part of Quebec you can
| really go to is the Montreal area), and the Maritime
| provinces have land but no work.
|
| The important thing to remember is that, unlike the US,
| the vast majority of Canadian land is much more difficult
| to inhabit- 90% of the population lives within 100 miles
| of the border, because that's where the good land ends.
| chaostheory wrote:
| Would this change due to climate change? I've been
| looking at the climate trends in major cities and there
| are some drastic temperature changes in the coming
| decades.
| gretch wrote:
| Probably
|
| Parent post's point is that there are many levers that can
| be pulled to alleviate the problem, but that zero of the
| options are being acted on.
|
| Maybe it's trivial to stack wood together, but apparently
| you can't "easily build your way past" given the political
| climate.
| CountSessine wrote:
| As a contractarian libertarian, I agree, and in fact I am
| in favor of open borders. And Canada's age-demographic
| profile is terrifying, given that the baby-boomers are
| heading into retirement. We can use as many tax-paying
| millennials and gen-x'ers as we can get.
|
| Perhaps you and I should get together and we can explain to
| a group of detached-house-owning baby-boomers/empty-nesters
| why liberalizing or eliminating zoning laws would lead to
| optimal land utility and that they should be ok with
| allowing row-houses in their neighborhood. And that would
| be an interesting conversation.
| imtringued wrote:
| No, land is a tool to make future generations be in debt
| to past generations. No sane person would give up their
| power. Only insane people who want everyone to succeed
| actually step down after they had their turn.
| CountSessine wrote:
| When I hear baby-boomers arguing against the numbers,
| statistics, and facts and saying things like, "don't
| touch my equity! You just have to be patient! It'll work
| out for you, too!", I sort of think about this - that
| this is a huge intergenerational transfer of wealth.
|
| Of course some millennials will enjoy a windfall when mom
| and dad eventually downsize. Not all, by any means - but
| some.
|
| I hope you're lucky enough to have some house-rich
| parents! It's always good to be an aristocrat!
| Melatonic wrote:
| So.......built up in big cities? Isn't that what a big city
| is supposed to have in the first place?
| legulere wrote:
| No it's just classic abuse of power what's described.
| Information asymmetry is one of the classic reasons for
| market failure.
| sonicggg wrote:
| I live in Canada, and the real estate business is such a mafia.
| They are leeches, and I'm not sure how much value these real
| estate agents are providing.
|
| It baffles me how this industry has not yet been disrupted by
| an outsider, like Uber did with taxis. I still remember when
| taxi licenses costed a fortune, and you had the exact same
| leeches exploiting it. They were seen as an investment in some
| cities, like NYC.
|
| I know there are useless regulations that keep these agents
| being needed, but so there were with taxis as well, and Uber
| did not give a crap.
| ethbr0 wrote:
| In the case of real estate, the entrenched transaction
| businesses control both supply and demand, and hence are more
| able to block new entrants.
|
| In the case of Uber, supply (people who own vehicles) was
| effectively unlimited and independent.
| boplicity wrote:
| Uber is an interesting comparison, because their primary
| competitive strategy was to ignore existing government
| regulations. Regulations, of course, are a huge issue in
| the real estate industry. Maybe someone can step in and
| invest a many billions of dollars in real estate -- while
| ignoring the red-tape regulations that often prevent
| building? This seems unlikely, but could certainly be a
| path towards disruption.
|
| The difference, with Uber, of course, is their cost of
| capital was relatively low. They didn't have to buy
| vehicles, for example. (Imagine having to tear down a few
| multi-billion dollar real estate developments. Yikes.)
| Spooky23 wrote:
| Uber was just an obvious con that demonstrated the danger
| of unrestrained capital and an era of ineffective
| government.
|
| Real Estate isn't a regulatory trap; it's an information
| trap. You can buy and sell property direct. All of the
| legal stuff is (nominally) done by attorneys. But the
| association of realtors controls the listing service and
| makes discovery easy.
|
| Like all salespeople, realtors add "value". When you've
| been in 2,000 houses, you pick up insights that are
| useful and learn about neighborhoods. The information is
| used for both good and bad purposes.
|
| Most of the disruptors do stupid shit with stupid
| investor money or integrate with the existing players and
| add some value.
| ethbr0 wrote:
| > _or integrate with the existing players and add some
| value_
|
| Since 1973. https://en.m.wikipedia.org/wiki/RE/MAX
| InitialBP wrote:
| I would add that Uber has traditionally operated at a loss,
| and on top of that they don't provide the same level of
| benefits and payment to their "contractors".(whether or not
| they should is a different question)
|
| While they did disrupt the taxi market, they are also
| setting false expectations about what sort of model is
| viable in the space since _Eventually_ they will need to
| bring in revenue or could potentially be forced to pay
| their drivers more which would lead to a big hike in prices
| and would probably have an impact on how it functions now.
| tejohnso wrote:
| You can list and sell on mls yourself through a low cost
| "mere posting" agent agreement. A few hundred bucks.
|
| Why sellers want to pay tens of thousands in commission in a
| bidding war environment is a mystery to me.
| Spooky23 wrote:
| Easy. Buildings have problems. It's in your interest to have
| some clueless salesman talk to buyers and represent whatever
| they represent than to do it yourself.
| dfas23 wrote:
| I'm not so sure.
|
| We're currently hunting for houses, and lost out on a few
| listings because we didn't want to overbid. When the sold price
| was revealed, SO many times we'd think DAMN, we'd prob pay
| $10-$25K on top of that to get it had we known..
| [deleted]
| jl2718 wrote:
| There's also the possibility of using homomorphic encryption to
| make it blind on both sides.
| ethbr0 wrote:
| As someone who recently bid in a hot property market, I'm a
| huge fan of common sense bans and unwaivable rights.
|
| In a competitive market, filled with buyers of questionable
| sophistication, i.e. residential real estate, everyone gets to
| the bottom of maximally-waived, minimal-safeguards pretty
| quickly to make a competitive offer. And ultimately, that isn't
| good for anyone, sellers included.
|
| Better to explicitly prohibit the stupidest behavior and
| require some safeguards. E.g. non-waivable 72 hour cooling off
| period. Then everyone can compete within those bounds however
| they want.
| blip54321 wrote:
| It's complex. There are two sides to every equation. Buyer
| and seller. Sellers aren't necessarily sophisticated either.
| If I sell my home, and the roof is leaking and I don't know
| about it, I don't want to be liable down-the-road.
|
| Peace-of-mind is worth a lot. Especially if the buyer is
| sophisticated, I might take a lower offer if it has the right
| waivers.
| AzzieElbab wrote:
| I think people are missing the fact that for many Canadians
| values of their homes represent their live savings. So while
| homeownership remains high in Canada doing something
| substantial about re prices would ruin peoples lives.
| arcticbull wrote:
| Yeah, about 70% of Canadians are homeowners (almost 15%
| higher homeownership rate than in the US). Ideally, they find
| a way to keep home price growth at/below inflation for a few
| years rather than actually pulling prices down directly.
| There's very little appetite for reducing the notional price
| since that 70% is broadly "most voters."
| glouwbug wrote:
| Doesn't the 70% ownership stat include those living with
| their parents? I have friends at 30 who still live with
| their parents.
| ipaddr wrote:
| Those kids will get that house passed down to them.
| heyitsanewacco wrote:
| Literally my brother's retirement plan. Good luck to
| anyone who doesn't have a well off family!
| empressplay wrote:
| Actually no, because you still need a place to live. So it
| doesn't really matter if your home is worth $!M or $100K
| because it would cost you the same to move somewhere else. As
| such reducing home prices across the board isn't that
| problematic, because there's no loss in 'value'. You can
| still sell your apartment in Vancouver and buy a 5-bedroom in
| Saskatoon.
|
| The issue becomes people with existing outstanding mortgages.
| If we considerably reduce house values, would outstanding
| mortgages need to be reduced pro-rata? Who would 'eat' that
| cost? The government? The bank?
| [deleted]
| AzzieElbab wrote:
| Most common scenario is to sell your Toronto home for 2m
| and retire to a 500k condo in Florida. And no, neither
| banks nor government would absorb the delta between
| mortgage value and current property evaluation. Banks are
| probably covered by some form of government insurance which
| people would have to pay up through taxes
| heyitsanewacco wrote:
| There is another option. I believe Japan went through it
| in the 90s. So lets follow their example and do nothing
| about the real estate bubble too.
| ryan93 wrote:
| It wouldn't ruin lives to reduce wealth that was stolen from
| people unable to buy homes. It would also help their kids.
| Something lots of modern homeowners don't give a shit about
| at all.
| ipaddr wrote:
| Stolen from people unable to buy homes? Someone else's
| house that you wish to own does not make it stolen property
| from you.
|
| If you purchased a home that someone who had less money
| wanted is that stolen property?
|
| Can I have your computer, phone and your car. I don't have
| any money but you having something I want means you stole
| it.
| ryan93 wrote:
| Stolen as in you literally cant build a home on your own
| property because the government with guns wont allow you
| to. The price of homes is not remotely the product of
| fairness or any kind of free market.
| smcin wrote:
| Can you please explain to all non-Canadians why you
| "can't build a home on your own property"?? Are you
| complaining about permitting, or what? Please explain the
| context.
| Ensorceled wrote:
| We are at the point where foreign and Canadian speculation in
| housing is making housing totally unaffordable for the vast
| majority of Canadians. In a country of less than 40 million,
| it's pretty easy to swamp our markets.
|
| We need to take speculation out of the marketplace.
|
| I'd also like to see a ban on corporations purchasing private
| homes and significant tax increases on non principle
| residences.
| imtringued wrote:
| How about you introduce a land value tax, primarily for
| corporate owned properties and a tax break for owner
| occupied properties and a small tax break for small private
| land lords with less than 5 properties. Like a 50%
| reduction for the first 500m^2 of land that a person owns.
| manbackharry wrote:
| Your last line is pretty much my exact opinion. I'm an
| idiot, but I struggle to see how significant taxes (and I
| mean SIGNIFICANT - something like having all rental income
| and cap gains on secondary residences taxed at the highest
| rate ~54%) in these cases wouldn't have extremely broad
| appeal. Make the sector unappealing as an investment class
| and you should stop seeing unfettered speculation. The idea
| of housing being an investment in general is warped.
|
| The principal residence tax exemption is also a joke but I
| also understand it's political suicide to try and get rid
| of it and at this point, since so many people have their
| life savings tied up in real estate, you'd probably be
| causing more problems by removing it.
| imtringued wrote:
| Rent control doesn't work because of liquidity
| preference. Rental income must exceed the liquidity
| premium of land or else it will be kept empty. Liquidity
| preference is effectively the concept that people prefer
| keeping assets exchangeable for other assets.
|
| For real estate this means keeping the property ready to
| sell at any time. It is easier to exchange an empty
| apartment and even easier to exchange an empty plot than
| a rented out apartment.
|
| The downsides of renting out, i.e. the inability of being
| able to quickly sell the property must be compensated and
| that compensation is part of your rent. If you cap rent,
| that compensation will be insufficient to "bait" the
| property owner into renting his property out. They would
| rather keep it liquid and wait for a better offer. To
| keep it simple, the owner has options, the renter
| doesn't, so the renter must go out of his way to attract
| the owner's attention by paying higher rent than if he
| had outright owned the property himself.
|
| Eliminating the liquidity preference of land would
| require all land to be leased or a sufficiently high tax
| on owned land (so that waiting and doing nothing has
| opportunity costs).
| Ensorceled wrote:
| > I'm an idiot, but I struggle to see how significant
| taxes in these cases wouldn't have extremely broad
| appeal.
|
| It would have broad appeal, but not to the developers
| etc. that are buying 10K plates at fundraising dinners
| ...
|
| > The principal residence tax exemption is also a joke
|
| The problem is that without that exemption, you literally
| can't afford to move. The 6% "tax" for real estate fees
| are already painful if you are trying to move to a house
| of the same value in another city, but if 40-50% of your
| sale value was considered a capital gain ...
|
| The real problem is people "moving into" rentals for 6
| months and then declaring that their principle residence
| and selling the property. Once you start renting it
| should be forever be a business property.
| manbackharry wrote:
| > It would have broad appeal, but not to the developers
| etc. that are buying 10K plates at fundraising dinners
| ...
|
| Definitely true and thought it would go without saying
| haha
|
| The rest of your post is totally fair and I can't really
| disagree.
| qball wrote:
| >I'd also like to see a ban on corporations purchasing
| private homes and significant tax increases on non
| principle residences.
|
| This would actually solve the problem (the calls are coming
| from inside the house- foreign investment is merely a
| scapegoat), and as such it won't be done.
| Ensorceled wrote:
| Foreign ownership is _a_ problem, especially in some
| markets, but I agree it 's not the only problem, nor the
| biggest problem.
|
| But any step forward is a win.
|
| Thank your MP and ask them to solve the next problem:
| Canadian corporate ownership.
| gregable wrote:
| Not doing something about it eventually ruins the community
| and then takes the life savings away in an even more dramatic
| crash.
|
| Canadian Real Estate is pretty clearly in bubble territory.
| Something can happen now or later, but it only gets worse
| with time.
| imtringued wrote:
| >I think people are missing the fact that for many Canadians
| values of their homes represent their live savings.
|
| Let's ignore the property itself, which is a depreciating
| asset which was built and can be improved through manual
| labor.
|
| That land is going to stay the same no matter how much you
| pay. Paying more for the same plot of land doesn't make it
| better. You don't get a bigger plot or a plot of better
| quality by spending more on the land. The land isn't wealth,
| it's the community around the land that gives it value. If
| you have demographic problems, your land is going to be
| worthless because the community is too old and shrinking.
|
| Betting on ever growing populations is a pyramid scheme by
| the way.
| FpUser wrote:
| And ruin lives for everyone who did not manage to buy house
| when it was affordable. Fuck that.
|
| Just in case, I do own the house.
| AzzieElbab wrote:
| Do you have a mortgage too? Would you be happy owing the
| bank more than your property is worth?
| imtringued wrote:
| That wouldn't be a big deal if the house was affordable
| to begin with.
| CogitoCogito wrote:
| Who would be happy with that? And who is happy with not
| being able to afford a house? What does happiness gave to
| do with it? You made a financial bet on buying your house
| for certain price. There's always a risk in that price
| going down after you buy it. Sucks for you but the price
| going up for you just sucks for someone else.
| AzzieElbab wrote:
| Unhappy voters matter
| FpUser wrote:
| Government with their policies and regulations has
| brought us into this mess and it is up to them to figure
| out graceful exit. Somebody is going to get hurt either
| way. But if you leave things untouched you will end with
| two castes eventually. If this what happens what is the
| fucking point of our "advanced" system where everyone can
| pursue a "happiness".
| VincentEvans wrote:
| 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, private capital, REITs which
| does not appear to be addressed at all?
|
| Thought I do agree that a non-primary-resident investment,
| whether from citizens, foreigners, or capital should be greatly
| limited overall and these rules should only loosen to direct
| investment towards areas that are in dire need of an influx of
| capital for redevelopment. That is - if it's not distressed, and
| it's not going to be your primary residence - GTFO, you should be
| last in line to buy.
|
| And I say that as former landlord. I just believe that if I was
| looking to make some money - I could probably do just fine under
| these conditions. I don't see an issue of buying a distressed
| property needing a rehab, and I think doing so benefits everyone.
|
| I am getting real tired of society getting ever more dystopian
| just so that someone can make a buck.
|
| https://www.fool.com/investing/stock-market/market-sectors/r...
| temp8964 wrote:
| Apparently you don't understand economics. Without the massive
| investments, housing will be even more expensive.
| VincentEvans wrote:
| Others who have replied offered their point of view. Some
| agreed, some disagreed. You, though, shouldn't have even
| bothered. Next time hit that downvote button and move on.
| temp8964 wrote:
| Your this reply is even worse, don't you see it?
| davidw wrote:
| > massive investments made by hedge funds, private capital,
| REITs
|
| I can't recommend this article enough on that subject:
|
| https://www.vox.com/22524829/wall-street-housing-market-blac...
|
| "The role of institutional investors is still being studied,
| but the popularity of the narrative strikes at something
| dangerous: People want a convenient boogeyman and when they get
| it, they often ignore the structural problems that are harder
| to combat. Housing undersupply is the result of decades of
| locals opposing new home building. It's not something that can
| be blamed on Wall Street greed and the nefarious tinkering of a
| private equity firm. And that's a much harder truth to
| stomach."
| llbeansandrice wrote:
| I feel like both of these things can be problems.
|
| If you view housing and ownership of your domicile as
| something that should be accessible to people, then housing
| necessarily cannot be viewed as an investment vehicle and
| large corporations, REITs, wallstreet, etc. need to be
| excluded so that more supply can be available to "correct"
| buyers.
|
| Limiting these groups does help on the supply-side. While it
| may not be the root cause, it's far better than showering the
| demand-side with cash like tax breaks for first-time home
| buyers.
|
| Perfect is the enemy of good.
| dionidium wrote:
| Yes, but one thing causes the other and it's not in the
| causal direction people intuitively think. Foreign
| speculators and investment firms like Blackrock are only
| entering the SFH market because supply constraints mean
| ever-higher prices. It's not like nobody thought to buy up
| houses 40 years ago. You don't have to be a genius to think
| of it. I can remember being a teenager and thinking, why
| don't big firms buy up all the housing and rent it back?
| The answer is that in _most_ markets homes aren 't
| naturally a good investment. It's a capital-intensive
| business and you end up with a depreciating asset, small
| margins, and lots of hassle.
|
| But if supply gets constrained enough that prices complete
| detach from those fundamentals, then, sure, why not jump
| in? These investors are only in this market in the first
| place because of supply constraints, so it's not just that
| low supply is a more important factor than the investors --
| the investors wouldn't even exist if not for the low
| supply!
| llbeansandrice wrote:
| I'm not contending that supply isn't the real issue, just
| that there's no way you're going to be able to change the
| culture around individual home ownership, nimbyism, and
| zoning laws on any reasonable time-frame. A better
| current solution that likely has wide-spread support
| would be to limit the demand rather than throw more money
| into the demand side.
|
| Limiting large investors does not solve the problem, but
| it could help alleviate some acute symptoms.
| davidw wrote:
| I'm not so sure it's not possible. There are _large_
| numbers of people getting priced out, and YIMBY groups
| are springing up all over. Here in Oregon, we passed
| HB2001, which re-legalizes up to 4-plexes in our cities.
| One of the city councilors where I live is a huge YIMBY.
|
| https://www.brookings.edu/blog/the-
| avenue/2022/03/31/where-p...
|
| https://noahpinion.substack.com/p/the-yimbys-are-
| starting-to...
| dionidium wrote:
| Yeah, you'd never get it done on a local level, but when
| people are forced to think about the issue holistically
| -- that is, when they can get outside of their immediate
| neighborhood and think about the fact that it's illegal
| to build enough housing on a state or even national level
| -- it looks like they can actually be swayed. These
| changes have to be made at the state/province level.
| ceeplusplus wrote:
| REITs are not buying million dollar homes in Vancouver to
| rent out. None of the real estate hotspots where you
| literally can't buy a home on a normal salary are caused by
| REITs, because those homes have terrible yields. Most REITs
| focus on either large, 10+ unit apartment buildings, or on
| cheaper houses in less appealing locations with good
| yields.
|
| The real issue is that there is not enough supply in
| desirable locations.
| davidw wrote:
| I don't think many people are really in favor of big
| investors getting into housing because no, it sure does not
| help, but the root cause is "not enough homes", and the
| solution is "build more homes of all shapes and sizes".
| That's also the solution to keeping big investors out! Big
| investors aren't piling into used cars despite the recent
| scarcity because they know that sooner or later the car
| companies are going to go back to churning out a bunch of
| new cars.
|
| You're quite correct that more money chasing after the same
| limited number of homes is just going to drive up prices.
| imtringued wrote:
| It's the real estate equivalent of blaming immigrants for
| stealing jobs.
| ericmay wrote:
| > 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,
| private capital, REITs which does not appear to be addressed at
| all?
|
| Can you not do this and _also_ seek to identify hedge funds,
| private capital, REITs, and other entities which may be more
| difficult to regulate at a later time? Maybe this first piece
| of legislation is the quick win?
|
| Are you saying that foreigners who do not reside at all in
| Canada should be able to buy a primary home in Canada? Because
| that's what this bill is preventing. If you're a "foreigner"
| it's not relevant so long as you're actually a resident of
| Canada.
| VincentEvans wrote:
| > Can you not do this and also seek to identify hedge funds,
| private capital, REITs, and other entities which may be more
| difficult to regulate at a later time? Maybe this first piece
| of legislation is the quick win?
|
| You can, and I specifically pointed out that I generally
| agree with what is being proposed, and certainly hope that it
| isn't an attempt at diversion by throwing out the usual
| scapegoat.
| tomatowurst wrote:
| You nailed it. You don't need to be in the Canadian real estate
| to realize that the most people coming to open houses are in
| fact local Canadians (also from other provinces) looking to
| move to the warmest part of the country or add another property
| or two to their portfolio.
|
| The landlords that run the real estate holdings companies are
| mostly White. They buy up the properties, apartments, condos
| when they are cheap with the sole purpose of renting them out.
| Guess who influences local media and politicians. It's not some
| rich Chinese communist _fu er dai_ they could care less.
|
| The fact is that Canada isn't the all shining socialist
| paradise that outsiders make out to be. In fact places like
| Vancouver almost gets a pass when race issues are mentioned
| because its automatically chalked up as a "social liberal
| progressive city" compared to other American cities that often
| get thrown into the "shithole conservative counties"
| ipaddr wrote:
| In Canada the landlords are of many colours. Many are
| Jewish.. would you hold that against them because they are
| white?
| tomatowurst wrote:
| Why are you mentioning Jewish community here?
| tqi wrote:
| > 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)
|
| Yeah the Right loves to blame poor foreigners while the Left
| prefers to blame rich foreigners but at the end of the day they
| at least agree that it is never the voters themselves who are
| to blame.
| Spivak wrote:
| Weird, I know the left likes to blame the rich, but I've
| never seen specifically rich foreigners.
|
| Also for real how can the voters (ie the average citizen) be
| the problem? The average citizen has no money and no
| political or regulatory power. The average citizen just
| exists in a system they have no control over and responds to
| incentives. Hoping that en mass people won't do that is like
| politely asking a river to move.
| balaji1 wrote:
| it is a good observation, I think you mean most immigrants
| are not rich. If you didn't mean immigrants, immigrants are
| not rich until 10+ years later. Definitely don't spend like
| the rich. But they are willing to commit years to buy into
| real-estate.
|
| > The foreign-buyer ban won't apply to students, foreign
| workers or foreign citizens who are permanent residents of
| Canada, the person said.
|
| The article says some of those foreigners will be exempt. I
| will say this, the country needs the immigrants' money (ie
| spend in that country, on top of taxes paid)
| bin_bash wrote:
| This is definitely a thing in Vancouver:
| https://www.npr.org/2019/06/05/726531803/vancouver-has-
| been-...
| johndfsgdgdfg wrote:
| This is refreshing to see a left wing media writing on
| China. After COVID I pretty much lost trust in left wing
| media when it comes to China.
| tqi wrote:
| Well for housing in particular, average voters are the ones
| supporting restrictive zoning and stalling new housing.
|
| While I agree that getting people to change their mind is
| pretty hopeless, I dislike the framing that they are just
| "responding to incentives" and therefore not only off the
| hook for the shitty outcomes of their choices, but also not
| responsible for the choices themselves.
| giobox wrote:
| Attacking rich foreigners for not paying enough <insert tax
| or contribution> to their adopted homes is fairly common
| throughout the world, no? America does make it harder to
| avoid paying tax with a system that taxes income regardless
| of which country you earned it in, but most of the rest of
| the world does not work this way.
|
| To use the UK as an example, attacking rich foreigners for
| their "non-domiciled" tax status is extremely common. This
| is where you live in the UK, but for tax purposes hide your
| wealth in another system with lower tax rates, effectively
| paying no income taxes at all in the UK. Variations of this
| concept exist throughout the world in many countries and
| routinely draw politically ire.
|
| Just this week: https://www.bbc.com/news/uk-
| politics-61017993
|
| Wealth coupled with a collection of passports often creates
| far more opportunities to avoid tax than being stuck under
| the rules of one single State, rightly or wrongly.
| seanmcdirmid wrote:
| But at least in the USA, the left treats the rich pretty
| uniformly (no distinction is made between rich born-here
| citizen, rich citizen immigrant, or rich foreigner). Many
| don't even know Elon Musk was born in South Africa, nor
| do they really care.
|
| Tax evasion is seen as a moral problem no matter how you
| accomplish (so hiding it with your other citizenship is
| just as bad as using a shell company).
| ipaddr wrote:
| People were being taxed 90% income tax when this shift
| happened in the 70s.
| [deleted]
| ameminator wrote:
| There are many likely reasons for the explosion in housing
| prices - but we can't pretend that immigration isn't one of
| them. A solution will likely need to be multi-factored, but
| reducing demand by reducing immigration will probably have to
| be part of that solution. To ignore that is to limit how
| effective your measures in reducing the cost of housing can
| be.
| bogota wrote:
| Or we could have seen this coming a mile away and built
| more houses and reduced the idiocy of city zoning.
|
| But yeah it's the immigrants fault. Lets reduce immigration
| while we are facing a labor shortage.
| ipaddr wrote:
| The level of immigration is over 1%. Pretending people
| are just blaming foreigners misses the reality.
| bogota wrote:
| What do you mean by the level of immigration is over 1%?
| (Genuine question) and why does that matter?
| ameminator wrote:
| Well, it's not the immigrants' fault - it's the
| government's fault. At the end of the day, this
| confluence of circumstances is its responsibility. The
| combination of low interest rates, no expansive public
| transport projects, no action on money-laundering,
| hurdles in supply (as you mentioned) - and yes, expansive
| immigration policies (Canada had the highest population
| growth in the G7, mostly due to immigration [0]).
|
| The truth is, this problem has been growing for many
| years and public servants have allowed the issue to grow
| beyond any control (and actually profiting off it in some
| cases). Now, the rest of the population will suffer and
| it's become a _hard_ problem to solve.
|
| Finally, yes we have a labor shortage - but it may
| actually be a labor correction. Wages have been stagnant
| for years and inflation is running wild. Wages _need_ to
| rise to catch up - artificially depressing wages with
| immigration is a recipe for disaster.
|
| [0] https://www.cicnews.com/2022/02/canada-fastest-
| growing-count...
| davidw wrote:
| Here where I live, the people who show up at hearings to
| stop homes from being built are all wealthy-ish local
| people. Not immigrants, not some faceless government, not
| BlackRock, but our neighbors.
| [deleted]
| [deleted]
| mistermann wrote:
| >> 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)
|
| > Yeah the Right loves to blame poor foreigners while the
| Left prefers to blame rich foreigners but at the end of the
| day they at least agree that it is never the voters
| themselves who are to blame.
|
| _Generally speaking_ I think you 're mostly correct, but
| there are exceptions, and nuances.
|
| I am one of the odd outliers who believes that _much of the
| blame_ lies with voters, but at the same time it is a bit of
| a chicken and egg problem. It 's ~true that voters "should"
| "vote for better politicians", but consider:
|
| - what if the particular flavour of democracy that we
| practice does not make this possible?
|
| - what if the public's ability to make optimal decisions is a
| function of the quality of education they received, _which is
| largely a consequence of government policy_ (and other
| things, like culture)?
|
| Take HN for example: observe how many comments there are in
| this subthread (or the overall thread) asserting that "The
| problem is X", as if the causality behind the situation is
| due to a single variable. Might this error be to some degree
| (perhaps even a large degree) a consequence of causality
| (philosophy, epistemology, logic, etc) not being first class
| subjects in school (and culture/society), on par with
| science, math, and language?
|
| And if one's answer to this question is something along the
| lines of "Oh, they didn't mean that literally, they were just
| speaking loosely, or expressing their opinion, etc", then I
| ask: why is it that we have ~culturally normalized (if not
| worse) speaking (and I would say: _thinking_ ) so
| inaccurately and imprecisely about so many matters that are
| extremely important, be it housing prices, immigration, war,
| politics, you name it? Might it be possible that we
| (~everyone) are "doing it wrong", at massive scale?
|
| If I was forced to nominate a single variable that lies
| behind not just this problem, but perhaps ~all problems (
| _mostly_ excluding natural disasters), it would be the
| inability of the population of this planet to think and speak
| /listen/conceptualize/understand at a level that is adequate
| to rise above the local optima we find ourselves stuck in
| (note: there's substantial unaddressed complexity here: _some
| things_ are improving _on a relative basis_ , etc - I am
| speaking in an absolute sense, which includes that which is
| beyond our current knowledge, or ability to know).
| ceeplusplus wrote:
| We can't even get people to consistently pass basic
| mathematics at a college 101 level, what you're asking is
| impossible. There is fundamentally a culture of anti-
| intellectualism in many American subcultures and the left
| tries to paper over it by shouting about racism and the
| right straight up supports it.
| mistermann wrote:
| What of the errors in this comment section? Could the
| people here do no better? When the topic of discussion is
| related to computing, rarely do I see this many errors -
| assuming this observation is correct, is that
| interesting?
| hengri wrote:
| It's low interest rates to blame
| tqi wrote:
| Interest rates just went over 5% so I guess we'll test this
| hypothesis soon?
| honkdaddy wrote:
| It's a lack of supply caused by costly and overzealous
| environmental assessments which strangle the process of
| land development in Canada, particularly Ontario.
|
| If you want a convenient scapegoat, blame the McGuinty
| government of the early 2000s. When the 2005 Greenbelt Act
| was passed, developers across the country warned of a
| housing crisis in the future due to the effect the bill
| would have on the price and timelines for new construction.
| 17 years later we'd prefer to blame China or NIMBYs, but
| the reality is Canadians, and especially Ontarians, did
| this to themselves when they allowed politicians and
| environmentalists to ignore the concerns of land developers
| and engineers.
| VincentEvans wrote:
| Which should've helped a whole bunch of hard-working
| regular people to buy their first-time homes, but that is
| not what is happening it seems?
| chollida1 wrote:
| > Which should've helped a whole bunch of hard-working
| regular people to buy their first-time homes, but that is
| not what is happening it seems?
|
| This is false if you think about it.
|
| What drives the price of a house is what people can pay
| on their monthly payments.
|
| As rates go down prices go up as people can afford to pay
| more.
|
| Unfortunately for home buyers this means the downpayment
| goes up. What you end up with is a bunch of first time
| home buyers who can in theory afford the mortgage
| payments but can't build up the $200,000 nest egg
| required as a 20% downpayment on a $1,000,000 home.
|
| When rates go back up home prices will drop and so will
| the size of the downpayment required, even though the
| person will pay about the same monthly on their mortgage.
|
| Lower rate help those with existing homes and therefor
| existing equity more than those without homes.
| ethor wrote:
| It would have been true if the supply side of the market
| was working. Low interest rates have increased demand but
| the market has not been apply to increase the number of
| available homes to meet the demand, hence existing
| properties have increased in price.
| lucidguppy wrote:
| Its zoning and nimbyism.
| jachee wrote:
| It's treating basic human needs as financial instruments.
| ryan93 wrote:
| How does your theory explain the difference in housing
| prices between San Francisco and Lubbock?
| bdcravens wrote:
| The "theory" relates to increase over time for a single
| location, not differences between 2 locations at a single
| point in time. But to stick to your example, investors
| are more likely to flock to a location with greater
| returns. At the same time, Lubbock hasn't exactly
| remained stagnant.
|
| https://learn.roofstock.com/blog/lubbock-real-estate-
| market
| ryan93 wrote:
| Why are you so sure the outsized returns don't have
| anything to do with zoning?
| gunfighthacksaw wrote:
| Nah, it's the animal sprits
| seanmcdirmid wrote:
| > I feel like it's almost an attempt to appease citizens by
| blaming the issue on "foreigners"
|
| There is truth, however. The Wenzhou house wife property
| speculator trope has some basis in reality, and Chinese markets
| are already rife with massive speculation that has seeped into
| foreign markets popular for Chinese emigration (Toronto,
| Vancouver, and to a much lesser extent NYC and west cost
| American cities). You don't have to look hard to see the
| effects in Vancouver, where condo buildings and housing remain
| empty due to being seen as speculative assets.
|
| American and some western European housing markets (e.g. UK)
| are a bit unique in that they haven't limited foreigners from
| buying and speculating on real estate. Whereas in China, many
| tier 1 and 2 cities have strict residency requirements before
| you can buy an apartment (but these also apply to Chinese via
| their hukou residency system).
| tomatowurst wrote:
| There is a huge crowd of local Canadian landlords that own or
| seek to own more than one property. This is the group that
| benefits from the narrative that Asian foreigners are buying
| up the local estate.
|
| The really affluent immigrant groups aren't buying multiple
| properties, they already have a great deal of income, and
| their properties are well outside most of what HN can afford
| and do not impact the condo market which is the most
| competitive, accessible and volatile.
|
| They already taxed and stopped foreign buyers but the home
| prices in Vancouver keep going up as sales amongst local
| Canadians make up most of the volume.
|
| Now they announce this virtue signaling to appease the other
| Canadians who can't afford homes but the problem will not
| change.
|
| In fact, without outside capital constantly coming in, the
| Vancouver real estate market is not sustainable. It literally
| is just another game of musical chairs, it is the news of
| some Chinese communist elite member buying a mansion in West
| Vancouver that gets local Canadians eager to own properties.
|
| I'm no stranger to the anti-asian sentiments in Vancouver,
| just head over to r/vancouver to see people regularly blame
| Asians for the fact that they can't afford to live there. In
| fact in the 80s, they blamed Japanese, 90s they blamed Hong
| Kongers, 2000s they blame Taiwan, Mainlanders.
|
| It's really disgusting to see the blatant racism against one
| group that is normalized but not for others. It literally is
| the same attitude that people with anti-semitic views
| constantly deride Jews of their financial success that
| largely came out of merit.
| Tiktaalik wrote:
| Lots of bigots have latched onto Vancouver housing issues
| as a way to further their anti-immigration views. It's
| gross.
|
| This doesn't mean though that there haven't been real
| issues with the Vancouver market that involve foreign
| wealth.
|
| Prior to the foreign buyers tax we were seeing condo
| developers explicitly opening up sales offices in foreign
| cities, explicitly marketing their condos as pied-a-terres.
| I understand why people didn't like that. That sort of
| thing really doesn't help the local buyer or renter.
|
| I'm happy to see that while Canadian politicians have
| brought in these rules to deal with some distortions of the
| real estate market from foreign wealth, we really haven't
| our politicians embrace the bigoted anti-immigrant rhetoric
| around this topic of the sort that you occasionally see on
| twitter and reddit.
| tomatowurst wrote:
| seanmcdirmid wrote:
| > They already taxed and stopped foreign buyers but the
| home prices in Vancouver keep going up as sales amongst
| local Canadians make up most of the volume.
|
| These were always easy to work around: how many Chinese
| students come to Canada to study and just happen to have a
| few million dollars to spend on a house? The new proposal
| is also easy to work around, the Canadian government isn't
| serious about solving the speculation problem.
|
| > In fact, without outside capital constantly coming in,
| the Vancouver real estate market is not sustainable. It
| literally is just another game of musical chairs, it is the
| news of some Chinese communist elite member buying a
| mansion in West Vancouver that gets local Canadians eager
| to own properties.
|
| Perhaps. We already went through this in the 80s with the
| Japanese, and after the Japanese real estate bubble burst,
| Vancouver real estate was depressed for almost a decade (I
| remember the signs for condos starting at $100k in 1997!
| And no one was blaming the Hong Kongese for that at the
| time). China is just Japan 2.0 in this regard: after the
| Chinese property bubble bursts, Vancouver real estate will
| be heavily effected.
| tomatowurst wrote:
| > Perhaps. We already went through this in the 80s with
| the Japanese, and after the Japanese real estate bubble
| burst, Vancouver real estate was depressed for almost a
| decade (I remember the signs for condos starting at $100k
| in 1997! And no one was blaming the Hong Kongese for that
| at the time). China is just Japan 2.0 in this regard:
| after the Chinese property bubble bursts, Vancouver real
| estate will be heavily effected.
|
| Now this is why I love HN, its to see another fisherman!
|
| I remember the 90s were depressing time for Vancouver.
| The economy was in complete slump and NDP took the fall
| for that.
|
| Now the Chinese real estate market is incomplete
| shambles, people are in complete denial about that the
| Vancouver real estate market lags behind. Already the
| bubble has started to burst in Montreal, which I remember
| were the last to join the party!
| seanmcdirmid wrote:
| > Now the Chinese real estate market is incomplete
| shambles
|
| Chinese real estate prices are still pretty high. The
| government keeps things from bursting by controlling the
| real estate agents and their companies (owned mostly by
| red families, they just taper off on sales volume instead
| of letting prices fall). We will see how long they can
| keep juggling that. Which is why rich Chinese like to
| invest in western property markets in the first place:
| there is more liquidity in Vancouver and Toronto vs.
| Shanghai or Beijing.
|
| BTW, I'm not from Vancouver, I just visited a lot in the
| 90s (when I was going to school in Seattle).
| tomatowurst wrote:
| the Chinese communist party elites send money abroad is
| to put it out of reach. Very tough for the CCP to auction
| off your property in Canada or United States.
|
| For the Japanese it was cheap debt that exported property
| inflation which led to an immediate drop in liquidity
| however currently there is cheap debt locally and its the
| locals participating in the real estate speculation.
|
| the actual foreign ownership is like less than 5% in
| Vancouver yet the media and establishment constantly
| loves to shift attention away from REIT and institutional
| money, rich Canadians and against scapegoat groups.
|
| unlike the melting pot system you have in America,
| Canadians fall into ethnic tribalism, safety in
| similarity. There's an idea that everyone can be
| Canadian/American but its implicit understanding that it
| is false. Canadians have this sort of superiority complex
| and see themselves holier than thou, it is far more
| broken than America in some ways and just in my personal
| interactions, Americans by large, were far more
| "Canadian" than real Canadians.
|
| The country honestly feels very much broken and the more
| dystopian and divided it becomes, the more it will push
| people on the fringes away to isolation. Ethnic enclaves
| aren't by choice, they are a byproduct of an unwelcoming
| and implicitly hostile incumbent establishment.
| seanmcdirmid wrote:
| > the actual foreign ownership is like less than 5% in
| Vancouver
|
| It is probably much higher than that, 5% is just what
| ownership can clearly be traced to a non-resident foreign
| owner. But you have a lot of property owned by Chinese
| students. The government is really conservative when they
| measure these numbers. Heck, I think the empty Seattle
| townhome next to mine, which I know is owned by an old
| retired couple in Beijing (the daughter told us as much
| before she left), is not counted as foreign owned even
| though it for all practical purposes is (and was bought
| with money from China...but then again, I bought my
| townhome largely with money I earned in Beijing as well).
|
| I'm sure plenty of resident Chinese and Indians own
| property in Vancouver also (since there are so many of
| them), but I wouldn't count those as foreign owners
| either. At that point, it is mostly Canadian money
| chasing after Canadian assets, rather than Chinese or
| Indian money. Here in Seattle, it is rich techies driving
| the market, and many of those just happen to be Chinese
| or Indian (citizens, permanent residents, and H1s). That
| is a different problem (rich techies like us bidding up
| the market, not that many techies are Chinese and
| Indian).
| woah wrote:
| > 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, resulting in no effect on the rental market prices, then
| we'd see it in the vacancy stats. But that's never actually
| mentioned by housing conspiracy theorists because the vacancy
| stats show that the areas with highest prices have extremely
| low vacancy rates, because demand for housing is so much higher
| than supply, because not enough housing has been built.
| quickthrowman wrote:
| How on earth would higher home sale prices by corporations
| bidding housing up push rent down? It has the exact opposite
| effect, rents go up if a property costs more..
| woah wrote:
| Seriously? What's the mechanism of this magical connection?
| Rental prices go up if there is more demand in the rental
| market.
| nawgz wrote:
| bogota wrote:
| Pleased refrain from personal attacks and instead focus on
| debating what was actually written.
|
| I have downvoted you because this goes against the general
| spirit of discussion on HN.
| nawgz wrote:
| You're right, let me make a good faith response to right-
| wing late-stage-capitalism propaganda, that's worth my
| time.
| the_optimist wrote:
| Doesn't have anything to do with wings. This is just
| economic nonsense.
| the_optimist wrote:
| This is a total and complete non sequitur. No reason rental
| prices would go down. I just looked at materials of one such
| company touting 50% increases.
| notsrg wrote:
| 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.
| bryanlarsen wrote:
| Given that pretty much everybody in Toronto rents because
| nobody can afford to buy, it's pretty circular. If they
| weren't buying to rent them out, then the people who can't
| afford to buy would have nothing to rent.
| eptcyka wrote:
| Real estate is always a good investment (unfortunately), and
| capital flight from Asia is not a joke. It's happening in
| Europe too. Personally, I think governments in well developed
| countries should do their best to dissuade investment in
| housing as a financial instrument. Why should I compete with a
| millionaire, be it local or foreign, for a decent house to live
| in a city I've lived in for years?
| tomatowurst wrote:
| Tiktaalik wrote:
| The issue is foreign capital in general.
|
| Due to history and geography, in Vancouver's case it's
| largely money from Hong Kong, Mainland China and the United
| States.
|
| For London for example, it's from Russia and other places.
|
| Money from Asia is being referenced because it's a concrete
| example.
| ryan93 wrote:
| There is no law against Canadian Asians buying houses. The
| law applies to foreign Arabs too. Most people who don't
| want foreign buying have never wanted foreign buying from
| anywhere!
| dirtybird04 wrote:
| The comment you're referring to blamed "capital flight from
| Asia" and "local or foreign millionaires". How did you get
| to "literally blaming Asians"? That's a pretty big jump
| there bud.
|
| Also, capital from China must be at least an order greater
| than capital from all of Middle East combined. Not
| defending their decision not to do anything when your Arabs
| and Iranians were buying up real estate, just that it was a
| drop in the bucket and pretty easy to ignore. Chinese
| capital, on the other hand, is becoming cumbersome for
| quite a few countries now
| bdcravens wrote:
| I didn't read it that way, but simply, that as a buyer in a
| popular city, it's frustrating to have to compete literally
| with the entire world. Criticizing a problem that has
| existed in the past doesn't make the criticism any less
| legit. In saying that the commenter should "blame
| themselves", as well as the other examples you provided, it
| sounds like you support their position that foreign real
| estate investment should be restricted. Selfishness isn't
| always bigotry.
| workaccount21 wrote:
| "foreigners" make up 50% of Canadas largest cities - where all
| the money is. The richest of the world can afford to move there
| but farmboy from Peterborough is SOL if he ever wants to make
| real money. Im fine with putting your own citizens interests
| before the rest of the world.
| VincentEvans wrote:
| Even if those "citizens" are massively capitalized corps
| seeking returns on their investments? Who cares if they are
| domestic or foreign (and if foreign becomes difficult -
| they'll just open a subsidiary).
|
| I don't really know whether you have read the rest of what I
| wrote or just got triggered by me seemingly defending
| "foreigners" and hit the Reply button.
|
| I don't mean to single you out specifically, there other
| posts that seem oddly similar.
|
| Anyway, I think there's a big distinction between immigrants
| (who cease to be immigrants at some point, how many years
| does it take in your opinion by the way? Who is more worthy
| of being helped to buy a home - a immigrant who came to the
| country 30 years ago, or a natural-born 25 year-old
| citizen?... but I digress.) and investment real estate that
| requires an intervention.
|
| Let's say we put a huge tax on all real estate that isn't a
| primary residence, I am all for making it super unprofitable
| to hold so that rents cannot cover the expense - to force all
| these REITs having to fire-sale their holdings to people who
| want to live in them.
| workaccount21 wrote:
| I refuse to get into an argument that I know will turn out
| to be emotional so I'm just going to skip to the last
| point.
|
| >Let's say we put a huge tax on all real estate that isn't
| a primary residence
|
| Because cottages are a traditional part of life here and
| real estate is one of the only ways to make real money for
| someone with some capital in the middle class.
| johndfsgdgdfg wrote:
| I live in Canada. In Canada foreign investment is a massive
| problem. This is NOT the only problem. But it is a big part of
| the problem.
|
| And arguably housing crisis in Canada started with foreign
| investment. Now domestic players and instituitional investors
| are also involved in housing market. Together there are enough
| parties involved not to let housing prices go down.
| ipaddr wrote:
| Did you know only 3% of Toronto properties are foreign owned.
| Are you sure it's a real problem or media invented cause?
| VincentEvans wrote:
| The problem with "capital" vs "foreign individuals looking to
| buy a home" in my mind - is that capital will find a way to
| camouflage as domestic capital if foreign capital is no
| longer allowed. It will move the money, register a subsidiary
| etc and buy a billion worth of housing while we are
| celebrating that a foreign family couldn't buy a vacation
| home.
|
| I am sure banning that wealthy family from China will do
| "something" to help alleviate the crisis, but I think putting
| restrictions on capital being used to buy up homes that
| aren't primary-residence should be a priority and will have
| much larger effect.
|
| And to be clear - as it stands with the situation in real
| estate being what it is right now, I am in favor of massive
| taxes on real estate investments that are to be used to
| finance affordable housing to be made available exclusively
| to first-time buyers and primary residents.
| cuddlybacon wrote:
| > I feel like it's almost an attempt to appease citizens by
| blaming the issue on "foreigners"
|
| As a Canadian, I agree with this.
|
| Part of the problem is that the federal govt doesn't have
| jurisdiction over the actually issues causing the problem. I
| _think_ the provinces own it but delegate it to the cities. But
| for some reason, this isn't an issue in those elections. BC had
| an election less than a year ago and housing wasn't an issue
| outside of Reddit. And BC has the second worse housing market
| in the country (Vancouver).
|
| EDIT: Actually, that BC election was a year and a half ago. I
| even looked that up before posting and got it wrong. The covid
| time warp strikes again.
| rsync wrote:
| The article only speaks of small, single family properties in
| urban areas.
|
| What about farmland or ranch property or commercial buildings?
| palijer wrote:
| The day cities start starving and devolve into anarchy is the
| day we see more serious legislation introduced to improve life
| for farmers.
| the_optimist wrote:
| Do this in the US too, please. Also farmland.
| Spivak wrote:
| Would this solve anything except to make current farmland
| owners essentially landlords to the same huge corporations
| working the land?
| bogota wrote:
| How about we just make it easier to build more houses on the
| vast amount of land we have in the US?
|
| Do you have data that makes you think banning foreign buyers
| would actually make a significant impact? I haven't seen any
| indications that this is the case in the city I live in.
| kevinventullo wrote:
| Housing in the US is already relatively cheap outside of
| coastal urban centers, there's just far less demand.
| [deleted]
| andrewstuart wrote:
| My anger about housing prices led me to create Real Estate
| Rebellion:
|
| https://www.reddit.com/r/realestaterebellion/
| [deleted]
| swframe2 wrote:
| I don't think companies buying up homes are acting in the
| public's best interests. I think we should require companies like
| zillow to build the homes they sell. They shouldn't be allowed to
| buy existing homes unless it is to repair low income homes for
| low income buyers.
| jenkstom wrote:
| 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 something similar here.
| [deleted]
| gorjusborg wrote:
| This ban will not fix the issue by itself, but it should reduce
| some pricing pressure.
|
| I bet that the short-term rental market is also somewhat
| involved.
|
| With any legislative approach to solving a problem, I wonder if
| enforcement is possible and likely to happen.
| irrational wrote:
| I expect Canada to become prime real estate as climate change
| worsens. This is smart to start getting in front of it now.
| incomingpain wrote:
| The data is public, less than 5% of homes are going to
| foreigners. Don't see how they even accomplish banning foreigners
| when there are free trade and free investment agreements. The
| problem is that bonds have negative yields. Retirement funds are
| forced into buying real estate, because housing is a safe
| investment right?
|
| The federal government knows this and knows they can't do
| anything. If they targeted retirement funds like they should...
| what happens? Housing bubble pops, retirement funds lose tons of
| money. They are busy attacking the oil industry because they know
| they cant extract anything out of Finance, Real Estate, or
| insurance.
| CPLX wrote:
| In a real estate market (ie slow moving, most inventory turns
| over after several years) changing the demand of 5% of the
| buyers could have a massive impact.
| tmp_anon_22 wrote:
| I wonder how many homes are bought and sold through shell
| companies, family members, etc?
| bryanlarsen wrote:
| Price is set at the margin, especially in such an inelastic
| market as housing.
|
| "supply 100, demand 99, price goes down. Supply 100, deman 101,
| price goes up."
|
| 5% isn't a lot, but it could have a disproportionate impact.
|
| Housing isn't a federal responsibility, so the provinces are
| more to blame for the crisis. Ontario just totally whiffed
| implementing a report on how to reduce housing costs, so I
| expect the problem to continue.
| pseudo0 wrote:
| The bigger issue is the multitude of exceptions. A ban on
| foreign buyers except for permanent residents, students, and
| recreational properties isn't much of a ban at all. Canadian
| permanent residency is incredibly easy to obtain, and
| students are frequently used as straw purchasers for their
| foreign parents (just look at the number of UBC students who
| own multimillion dollar homes despite having zero income). It
| also doesn't address foreign citizens buying through Canadian
| shell companies, a strategy used in Vancouver to avoid their
| foreign buyer tax.
| bryanlarsen wrote:
| The loopholes are well known, so we'll see the sincerity of
| the government by looking into the details of the
| implementation, which we might not get today.
| appleiigs wrote:
| I was about to post the same comment: price is set at the
| margin.
|
| Also, if you look at the 5% in different ways, it becomes
| more significant. In your neighbourhood across Canada, 1 in
| 20 of the houses is owned by a foreigner. Now if you
| concentrate that in to Vancouver and Toronto... lets say 1 in
| 10 is owned by a foreigner... really starting to have an
| impact.
| gregable wrote:
| The demand for the housing drives the price, modulo short-
| term speculation. The investor buys it with an eye towards
| the cash-flow from renting, and by definition, it's rented to
| someone living there.
| sonicggg wrote:
| 5% can do a lot of damage considering how prices are set based
| on "comps", and the fact that a lot of this foreign capital
| comes from illicit sources, and they are more than willing to
| pay above market rate to secure the purchase.
|
| Canada has always been a paradise for rich crooks worldwide,
| and government has always chosen to turn a blind eye.
| msie wrote:
| It's amazing to me how some people are so entrenched in
| believing that foreigners are to blame that they will perform
| such mental gymnastics.
|
| The Myth of 1.3 Million Vacant Investor Homes in Canada:
|
| https://www.youtube.com/watch?v=evYOhpjMql0&t=6s
| gorjusborg wrote:
| I don't know how real estate market works in Canada, but I can
| totally see how 5% of buyers could mess up the market in the
| U.S..
|
| House pricing is set based on 'comps' (comparable homes and the
| price they sold for). That means that a small percentage of
| buyers can essentially bump (initial) pricing for all homes.
| unsupp0rted wrote:
| As far as I know, that oft-cited 5% number does not include
| "students" whose parents abroad suddenly gift them > $1 million
| in cash to buy one, two, or more properties.
|
| Does the 5% stat include those kinds of situations, in which on
| paper it's not a "foreign investor" buying the property, but in
| reality it's just that?
| noasaservice wrote:
| Landlords are the biggest issue.
|
| Where else can you buy a house for $x/mo , slap a rental on it
| for $1.5x/mo , and keep .5x/mo AND get equity?
|
| That's a fucking scam no matter how you look at it. And they're
| adding in NOTHING to the economy. They're parasites that inject
| themselves on reasonable costing houses and arbitrarily inflate
| them for their own profit.
|
| And who's predominantly doing this scam? Boomers are. They're the
| ones who have access to this kind of money and equity.
|
| And who's getting screwed? Millenials and GenZ are.
| Joakal wrote:
| Are foreigners responsible for house price increases? Is it
| companies? Is it locals?
|
| Who make up the buyers? Is there a breakdown? Ie foreign
| companies?
|
| I would also like to know for Australia too.
| daxfohl wrote:
| Why is foreign investment in Canada real estate so big vs the US?
| Is it just a pyramid scheme or something, or are investors
| actually making use of the properties?
| francisofascii wrote:
| My guess is the property tax rates are lower. If you have tons
| of money and want to store it in property, you will naturally
| pick the place that offers the lowest % fee.
| msie wrote:
| No.
| mperham wrote:
| 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.
| jl2718 wrote:
| Maybe stop government mortgage insurance. It's nothing but
| public liability for private gains.
| gregable wrote:
| Folks here lean Bay Area, but I don't think Canada has the same
| issue of preventing construction.
|
| For example, in Toronto, you get about 30-40k new housing
| starts a year in a city of 3M.
| https://ycharts.com/indicators/toronto_on_housing_starts. >1% /
| year isn't terrible.
|
| Your statement isn't wrong, but I don't know how much it
| applies to Canada Real Estate particularly.
| paconbork wrote:
| Isn't Toronto a pretty unique case in North America? If I
| understand this [1] correctly, then they're 4x the next
| largest city in terms of construction cranes. I thought I
| remembered reading that part of the reason why is that
| there's a regulation that developers use that let's them
| construct condo towers with substantially less regulatory
| overhead, but I can't seem to find it.
|
| [1] https://www.rlb.com/americas/insight/rlb-crane-index-
| north-a...
| ars wrote:
| Just like building roads can't reduce traffic, building houses
| can't either. It will just cause induced demand as more people
| will go to that area to live. Instead we should encourage
| people to carpool - live as roommates, or have small
| apartments, instead of each person getting their own single
| family home.
|
| /s (sort of)
| rs999gti wrote:
| > Just like building roads can't reduce traffic, building
| houses can't either.
|
| Mega tower condos could solve housing issues, but the NIMBY
| folks and local governments need to get out of the way -
| https://citylimits.org/2018/10/26/cityviews-proposed-mega-
| to...
| SECProto wrote:
| > 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)
| barbazoo wrote:
| Not sure if you mean "liberal" or "Liberal" but in BC for
| instance the provincial government is considering overriding
| municipalities that are not approving enough residential
| development. I don't know how much the federal government can
| do here? I'd appreciate any insight.
|
| https://globalnews.ca/news/8641905/bc-local-governments-hous...
| [deleted]
| dsnr wrote:
| 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.
| thrwy_ywrht wrote:
| >In many countries, including Europe, new properties are
| quickly snatched by investment
|
| Demand for housing is not infinite, and supply of capital is
| not infinite. Building more units will always help. The
| quantity of units which are bought and then kept empty long
| term is tiny in relative terms.
| tablespoon wrote:
| >> In many countries, including Europe, new properties are
| quickly snatched by investment
|
| > Demand for housing is not infinite, and supply of capital
| is not infinite. Building more units will always help. The
| quantity of units which are bought and then kept empty long
| term is tiny in relative terms.
|
| I think it's kind of pointless to argue over which _one_
| policy to pursue to fix this problem, why not try a multi-
| pronged approach?
|
| 1. Implement some policy to ban large investors from home-
| ownership (say no corporate ownership and a small cap on
| how many an individual/family can own). There are more
| reasons to do this than just supply.
|
| 2. Put an onerous tax on housing that is not occupied full-
| time.
|
| 3. Build more housing.
|
| 1 & 2 would help ease some (but not all) pressure that
| makes 3 less desirable.
| graeme wrote:
| Show me a country you're talking about, and show me their
| housing starts per capita relative to Japan, a country which
| allows building
|
| If well below, you haven't an argument.
| CPLX wrote:
| It shouldn't matter all that much. Rented homes are an
| excellent (not perfect but very close) substitute for
| purchased homes.
|
| People don't like to rent because of instability or
| unpredictability of pricing. But a large and growing long
| term rental market where it's straightforward to find a new
| place and nobody has an incentive to kick you out or raise
| your rent is really just fine.
|
| You might be thinking, right but if you rent you'd be giving
| up the ability to make all that money from appreciation that
| homebuyers get BUT THAT IS ACTUALLY THE PROBLEM WITH THE
| ENTIRE SYSTEM because you can't have affordable housing and
| also have housing as a guaranteed investment that always
| builds wealth the two concepts are fundamentally incompatible
| with each other and when you get that you're really starting
| to understand the problem.
| wnolens wrote:
| I like the conclusion, but I've created some elaborate
| financial models to compare buying versus renting (+
| investing the difference in S&P500). And so have a few very
| intelligent friends.
|
| It almost NEVER works out in favor of buying except for
| some crazy flukes like pandemic accelerating prices in
| Toronto.
|
| I think it's largely cultural? Canadian's (more than any of
| my American friends) are fed the idea that owning a home is
| the best financial decision and the holy grail of life. It
| may happen to be the best financial decision for them, but
| because they lack the information that it's not and
| wouldn't otherwise invest very well.
|
| Even in spite of that information, I still want to spend
| money and buy a house. I've been asked for vacate my apt
| for property sale more than once, and faced +800/mo rent
| spike (NYC...), and I'm over it.
| cmrdporcupine wrote:
| Many Europeans (including my aunt&uncle in Germany) rent
| for decades without any similar concerns about stability
| because the landlording laws are written better. And
| tenants can and do have their own kitchens and other
| improvements that are typically "perks" reserved for
| homeowners here.
|
| Renting has a bad name in North America because it is
| associated with insecurity, low-income situation,
| exploitation, etc.
|
| But in reality most people here are just paying rent to
| the bank. Housing prices in southern Ontario are so high
| that there's no way most of these people will ever truly
| "own" their home outright.
| Sohcahtoa82 wrote:
| > I've created some elaborate financial models to compare
| buying versus renting (+ investing the difference in
| S&P500) [...] It almost NEVER works out in favor of
| buying
|
| I can't see how that's possible.
|
| Rent is pissing away money, and from the rates I've seen,
| the monthly rent on a house is often very close to the
| monthly mortgage payment, so the "investing the
| difference ins S&P500" ends up being moot.
|
| For my house, Zillow estimates the monthly rent value at
| $2,400/month, which is almost exactly what my mortgage
| payment (including property tax) is. And in 10 years,
| that payment will become ~$570 once the mortgage is paid
| off and all that's left is property tax. Meanwhile, if I
| chose to rent instead, after 10 years, my rent would
| probably be well $3,500/month.
|
| Yeah, owning means I'm paying maintenance and repair
| costs, but those _certainly_ don 't add up to anywhere
| near what the rental payment would be.
|
| I fully reject any claims that in the long term, renting
| could ever possibly be better than buying from a purely
| financial perspective. A mortgage is constant (Unless you
| fell for the scam that is an ARM) and eventually goes
| away. Rents perpetually go up and don't leave you with an
| asset.
| wnolens wrote:
| Houses in the GTA are about 1.6M, resulting in about
| 7k/mo all-in. Chances are you're not paying 7k/mo as a
| renter, so it's a bit of apples-oranges. The house costs
| more, but you get more. You'd have to rent out part of
| your home and be a landlord to trade that extra space for
| cash flow. I value my time and privacy at a non-zero
| dollar amount :)
|
| This source [0] states annual appreciation to be about
| 6.11% for real estate. In my models I use 6.5% as a safe
| return rate for the S&P500. In the long term, you are no
| longer leveraged so that's a fair comparison I believe.
|
| anecdote: My parents bought a house 35 years ago in a
| suburb of the GTA. Purchase price was around 250K I
| think. It was a lot for the time, too! And now it's
| probably worth 1.8-2M. Amazing! Except 250k @ 6.5% over
| 35 years is just over 2.2M.
|
| [0] https://precondo.ca/canada-real-estate-
| statistics/#:~:text=T...
| CPLX wrote:
| Your models are almost certainly missing something.
|
| In a perfect world that would be true but in the actual
| world where lending is subsidized and tax-preferenced and
| the supply of housing is artificially constrained buying
| is just clearly a better scenario if you can do it.
|
| Some people do this by comparing a 5:1 leveraged
| portfolio of the S&P 500 against a home purchase or
| something but that's not a real comparison that exists as
| a choice in the real world.
| cmrdporcupine wrote:
| Mortgage lending is not tax-preferenced in Canada like it
| is in the US.
|
| But our housing market is ridiculously overheated for
| other reasons.
| wnolens wrote:
| I would love to find out what I'm missing (honestly, I
| spend a lot of time thinking about it). I'm working on
| publishing it as an interactive page. ETA soon.
|
| The principal residence sale tax free thing is a huge
| deal in Canada, so as an individual I can see it in many
| cases (though you need to sell to access it).
|
| That still doesn't help investors at all - which is
| confusing to me. It doesn't seem worth it to me to be a
| landlord of a standard duplex/triplex in Toronto.
|
| The comparison against a leveraged portfolio is only true
| at day one. You are continually de-leveraging yourself.
| At the end of the mortgage term, it's comparable 1:1, no?
| paconbork wrote:
| Yeah that's basically where I'm at. The ability to not
| have to move and the ability to improve the place and
| keep the value of my improvements are worth a large
| premium to me.
| JoshTriplett wrote:
| Investors in real estate make money by either selling or
| renting; either way, more homes still means lower prices.
| Keep providing more supply until it meets demand.
| hemreldop wrote:
| Well investment companies buy to resell. If there is a glut
| of new houses prices will definitely go down in the medium
| term.
| ClumsyPilot wrote:
| > If there is a glut of new houses prices will definitely
| go down
|
| Given the billion of investment dollars and cheap loans
| avaliable, it might be physically impossible to build
| enough homes fast enougg for the prices to go down
| dsnr wrote:
| In Germany they mostly buy to rent out and I'm sure it's
| happening in other places as well.
| givemeethekeys wrote:
| > This is not really guaranteed to solve the problem. In
| Europe, new properties are not readily snatched up. Just look
| at Italy. A growing supply that outpaces demand is literally
| the only solution. Every other solution will cause a black
| market.
| ______-_-______ wrote:
| I mean... it has to eventually. If my country has a
| population of 50 million and I build 800 million homes, will
| investors keep buying them all at above market rates (read:
| more than I spent building them)? Then I can build 100
| million more and keep collecting infinite money?
| boplicity wrote:
| This can go on longer than you think; it leads to "ghost
| cities" -- huge areas full of empty housing bought by
| speculators.
|
| https://allthatsinteresting.com/chinese-ghost-cities
| toast0 wrote:
| It's a lot easier to build housing in the middle of
| nowhere USA; but there's not a large problem of ghost
| cities. There's certainly a lot of sprawl, but not large
| new construction ghost cities; although there was some
| overbuilding in some areas into the 2008 housing crash,
| and some areas where construction stalled or stopped mid-
| build as a result, since either the builder could no
| longer finance finishing or it didn't make economic sense
| to do so at that time. China has a lot of disconnected
| incentives that help it make economic sense for the
| participants to build and buy into a ghost city that I
| don't think are present in the US and Canada.
|
| If ghost cities are a real concern, you could punitively
| tax vacant housing that's not offered for lease or sale,
| and limit housing starts when housing offered for sale or
| lease was above some threshold price. Or you could do
| something like a deposit per housing start, paid back
| over time to the owner or occupant while occupied.
| joshlemer wrote:
| But I bet rent is pretty cheap in those cities no?
| crooked-v wrote:
| Those "ghost cities" have been fairly consistently been
| filling in over time. Some of the originally-reported
| ones are by now more or less completely populated and are
| now just... cities.
| a_shovel wrote:
| That sounds interesting. Do you have an article or
| something about that?
| rwmj wrote:
| The other part should be a supertax on properties which
| are empty for more than 6 months.
| b3morales wrote:
| Yes, because they can keep shifting their imaginary money
| around and hedging their risk on paper until someone
| notices the music has stopped and the govt/rest of us are
| left holding the bag of turds again. (Cf. 2008)
| ryan93 wrote:
| Are you claiming Blackstone would continue to buy houses
| at current prices even with a 16fold increase in supply?
| In 2008 the government artificially backstopped loans not
| a free market fwiw
| MisterTea wrote:
| I'm sure the conservatives are equally responsible NIMBY's as
| well.
| bryanlarsen wrote:
| Federal Liberals can't do anything about that, it's a
| provincial responsibility.
|
| The Ontario provincial Conservatives commissioned a report into
| how to make housing affordable, and then completely ignored
| almost everything it said.
|
| This summer, I'm voting for whoever promises to actually
| implement the Housing Affordability Task Force report.
| Tiktaalik wrote:
| It's only considered a provincial responsibility now because
| the Fed Liberals of the 1990s completely got out of housing
| involvement with their big austerity budgets of the era.
|
| The Federal government was deeply involved in funding both
| for-profit and non-profit housing in the 1970s, the last era
| where Canada built a lot of housing.
| bryanlarsen wrote:
| The comment I was referring to was talking about red tape
| and zoning, though.
| dboreham wrote:
| It's very easy to build housing here in Montana but that hasn't
| stopped property prices from rising significantly.
| RandallBrown wrote:
| Is it really easy to build more housing in a place like
| downtown Bozeman? Like if a developer wants to buy up a block
| of single family homes and replace it with a large condo
| building, can they do that?
| mperham wrote:
| Sure it's easy to build. As long as it's a single family
| home. The least efficient form of housing.
| chasebank wrote:
| Idaho is the same way.
| sct202 wrote:
| The 100 year old building I live in would never have been
| approved under current requirements; the approval meetings
| would be going in circles about how it has too many units, not
| enough parking, not enough green space etc.
| impostervt wrote:
| 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.
| jimmydeans wrote:
| No one wants to talk about the elephant in the room.
|
| Canada has 'housing' but no one wants to live in anything other
| than a detached house close to the city.
|
| Lots of condos, semi-detached, and townhouse, however no one
| wants them because you have to have a detached home to have made
| it in life.
|
| I can't remember in my twenties obsessively wanting a detached
| house.
|
| GenX is buying up all the houses after selling their condos and
| townhouse they bought as first homes.
|
| Same people who's first car needs to be a 2022 BMW.
| slothtrop wrote:
| > however no one wants them
|
| This is completely made up. Look at the prices they fetch. If
| you build it, they will come; zoning heavily restricts the
| level of mixed development, hence you mostly see detached homes
| or very large condo buildings with little in between like
| triplexes. There's a reason Montreal has generally been more
| affordable for years than other large Canadian cities
| (population notwithstanding).
| MarcelOlsz wrote:
| Zero teeth. Why would it? Everyone here is a rich homeowner.
| Anyone who thinks anything will be done about housing is
| absolutely dreaming. Build more homes, housing gets cheaper,
| boomers lose their HELOC's, and we're in for a world of hurt.
| It's over.
| loceng wrote:
| This is nothing but pandering for votes before an election for
| those who don't understand this won't have any significant impact
| on affordability of houses for Canadians.
|
| There's a reason why we still also pay the highest
| telecommunications bills in the world - industrial complexes have
| captured our government, and even it's far worse that that;
| regulatory capture.
|
| Edit to add: 3 points down to 0 points; downvotes are an
| embarrassment to civil and critical conversation, and you should
| be embarrassed if you use them.
| eudoxus wrote:
| We just had a Federal election though? :/
|
| Unless you are referring to this toothless promise made prior
| to the election in question, and now they're happy to follow
| that as it won't actually change anything.
| loceng wrote:
| Only 20% of Canadians voted for Trudeau, and the majority of
| Canadians are being misled by our mass media channels - CBC
| which got $1.2 billion of government funding last year, and
| they are now being rewarded with an additional $100 million
| per year for the next 4 years.
|
| E.g. our electoral system is designed to be unfairly balanced
| towards the duopoly, so we've been stuck in a cycle of voting
| for the lesser of two evils - instead of who we actually want
| to vote for.
| dane-pgp wrote:
| I agree with you that the voting system is letting down
| Canadians, but I also think you are using an unfair framing
| with your "20%" figure which risks undermining the
| legitimacy of coalition governments (and thus efforts to
| introduce a more representative voting system where
| coalitions between smaller parties might become more
| common).
|
| In particular, I want to point out that the NDP have agreed
| to help the Liberal government to pass its legislative
| agenda, which presumably includes this ban, as the NDP had
| pushed for a tax for non-resident home purchases, which is
| a similar policy.[0]
|
| Considering the government as a two party coalition,
| therefore, and with the NDP getting close to half the
| number of votes as the Liberals, that would mean that 30%
| of Canadians voted for the current government. That's
| somewhere between Biden's numbers[1] and Boris
| Johnson's[2], to compare it to other major recent Western
| FPTP elections.
|
| [0] https://www.theglobeandmail.com/business/article-
| ottawa-face...
|
| [1] 34% = 81m / (158m / 66.2%)
|
| [2] 29% = 14.0m / 47.6m
| loceng wrote:
| And 30% making decisions for all of Canada is being
| argued as a good thing and fair, that my framing is
| unfair?
|
| Thank Goodness we have the Senate that requires passing
| these measures, these harmless ones like this one because
| it basically does nothing, but thankfully would have
| voted down the Emergency Act being extended for a month -
| which is why Trudeau the night before revoked it himself.
|
| I hope you're against Bill C-11 - the internet censorship
| bill as well? Did you hear their illogical conclusion for
| why they're doing it?
| dane-pgp wrote:
| > And 30% making decisions for all of Canada is being
| argued as a good thing and fair, that my framing is
| unfair?
|
| I'm not claiming it's a good thing, just that your
| headline figure of 20% makes it sound like coalition
| governments are somehow less good and less fair than
| single-party governments.
|
| Anyway, yes, you'll be glad to know that I'm against
| permanent "emergency" powers, and concerned about
| Canada's internet censorship bill, which seems to be an
| attempt to control social media as tightly as
| (government-approved) broadcast media[0].
|
| [0] https://reclaimthenet.org/canadas-internet-
| censorship-bill-i...
| throwaway123x2 wrote:
| I was shocked and alarmed at the cellphone bills when I moved
| to the US from a third world country, and then my classmate who
| had moved to Canada sent me his bill...
| peepop6 wrote:
| I know this is probably naive thinking but I don't understand
| how we can have so much land and still have unaffordable homes
| and concentrated populations.
| Tiktaalik wrote:
| Most of the land is useless and completely unviable for
| building anything. Seriously.
|
| Almost all of British Columbia is mountain. We flooded many
| of the river valleys for hydro power in the 1950s. Can't
| build on the side of the mountain that easy.
|
| Huge swathes of Canada are muskeg bog and tundra. etc.
| joshlemer wrote:
| IMO British Columbia is way under-developed. There is
| literally 15 or so Switzerlands worth of some of the most
| beautiful and desirable real estate North of Vancouver that
| could be developed in similar way to the cities in the
| Swiss Alps. The Okanogan is not really all that mountainous
| but is basically unpopulated, etc.
| loceng wrote:
| Exactly: it's the policy, it's captured by for-profit
| industrial complexes - and if you want to get into deeper
| conspiracy hypothesis, it's also foreign influence laundering
| $100s of billions into our real estate market, not only
| buying up/owning our most valuable land and properties, but
| at the same time making the costs of every Canadian go up and
| quality of life going down - making us weaker as a society,
| and more vulnerable to takeover; there's a whole book written
| on this called "Wilful Blindness: How a Network of Narcos,
| Tycoons and CCP Agents Infiltrated the West" by Sam Cooper;
| Canada is one of the richest countries in the world, resource
| and spring water wise with our lakes, and especially per
| capita with only 38 million population - we're a prime
| target, rich and relatively easy, and our systems are clearly
| captured.
| folkrav wrote:
| Cause we don't build homes.
| liminal wrote:
| Canada just had an election and the Liberals are secure in
| power from their deal with the NDP. This isn't pandering, it's
| them trying to advance their agenda. (Whether you agree with it
| or not)
| paulpauper wrote:
| "fuck!!" - someone who just bought a home before this was
| announced.
| dfas23 wrote:
| vote.
| joshlemer wrote:
| Don't worry, you'll be well taken care of. No government will
| ever mess with the wealthy homeowner class.
| knownjorbist wrote:
| Would've been better to just implement a land value tax.
| dane-pgp wrote:
| To avoid the problem of the tax just being passed on to
| renters, you would presumably make the tax "progressive" (i.e.
| marginal), or only apply after a certain threshold, right?
|
| I think that one mathematically appealing structure for such a
| tax is to work out what the median (inhabited, primary)
| property size is (including garden etc.) and set that as the
| tax-free threshold. Any land tax paid by the top half can then
| be distributed to those in the lower half.
|
| This would be similar to (and is based on the same logic as)
| Thomas Paine's proposal for what we would now call a Universal
| Basic Income.
|
| https://basicincometoday.com/thomas-paines-centuries-old-arg...
| joshlemer wrote:
| How would this be any different to what we have now (a property
| tax)?
| paconbork wrote:
| A land value tax targets the land only, not the structures on
| top of it, so nobody is penalized for improving their
| property. It also means that within an expensive metro vacant
| lots are taxed at the same rate as dense residential
| buildings, making land speculation unprofitable. Rather,
| landowners are incentivized to either put their land to
| productive use or sell to somebody else who can.
| francisofascii wrote:
| Well for one, it would be higher than low < 1% tax rates that
| exist now. That is just asking for foreign investors. And it
| would be based on the the land value, not the property
| (house) value.
| exdsq wrote:
| Canada used to be a really good place for foreign investment
| buying and renting/flipping houses pre-2008. My dad had around 50
| properties in the Nova Scotia region just before the crash and
| the income from that was barely taxable (as a UK citizen,
| although I don't remember specifics of how that worked). I can
| totally see why countries want to avoid foreign investment like
| that inflating local prices for citizens. Tbf he was renting them
| specifically to those with criminal records because most
| landlords used to have background checks, so there was a bit of a
| market, and it's probably a little better than the general
| flipping price inflation.
| jl2718 wrote:
| This is called "Blockbusting". Wonderful.
| gunfighthacksaw wrote:
| I'm glad it does not apply to foreign workers or PRs because I've
| met awesome people over my academic career that I 100% want to be
| my neighbours and fellow Canadians.
|
| Unfortunately none of them are loaded enough to buy a place,
| so...
| lbrito wrote:
| I live in metro Vancouver. The market is stupid right now (has
| been for years I guess). Its fairly common for houses to sell
| 200-400K over asking price, with sometimes one or two dozen
| offers.
|
| Also as the article says, this is just a bandaid, won't fix
| things.
|
| How about ending the bizarre zoning restrictions that result in a
| sea of SFHs with little islands of super highrise condos around
| transit hubs? Maybe that would untap a huge repressed demand for
| missing middle housing?
| _whiteCaps_ wrote:
| https://shapeyourcity.ca/vancouver-plan
|
| They're trying to fix it, please join in the discussions and
| open houses... too many NIMBYs with free time available are
| participating.
| jmyeet wrote:
| Good.
|
| The way countries allow the ultra-wealthy to park money in real
| estate and pay almost no taxes on it while it drives up the price
| of a necessary resource for everyone else has to stop. Period.
|
| In an ideal world, this wouldn't be a ban per se. I'd prefer to
| see that owning a property anyywhere allows that jurisdiction to
| tax your worldwide income and assets of the beneficial owner as
| if they were a resident.
|
| Double taxation treatires exist and can handle that case.
|
| New York City (as one example) should be for New Yorkers, not
| Russian oligarchs, nonresident billionaires and corrupt heads of
| state.
| tomatowurst wrote:
| They aren't buying homes where you would live, they own
| vacation homes in 8 digit figure mansions that low liquidity.
| How do ppl keep making this mental gymnastics here?
|
| You want to ban REITs, institutional money and local landlords
| with access to near 0% debt buying up and flipping homes. The
| average immigrant that buys homes from them aren't here to
| start a portfolio, they can't
|
| By your argument, New Iroquais should be owned by the original
| people that lived there.
| agentultra wrote:
| They also need to encourage provinces to change zoning laws to
| encourage mixed-use zoning and denser development. Suburban
| sprawl isn't going to be the best long-term answer to supply
| shortage.
| _aavaa_ wrote:
| "Some believe that secret bidding forces each potential buyer to
| offer as much as they can."
|
| ... Isn't that the whole point of an auction. Offer as much money
| as you can to get an thing that's worth that amount of money?
| dragonwriter wrote:
| A standard auction finds (approximately) the minimum price that
| no one else is willing to beat, a _secret bid_ auction finds
| the highest price anyone is willing to pay. The latter is
| better for sellers, the former is better for buyers.
| Ensorceled wrote:
| Secret bidding is designed to get the buyers bidding not just
| against other actual buyers and what you think they might have
| bid, but also against _imaginary_ buyers that might also be out
| there.
|
| In a hot market this is playing on the FOMO for people looking
| for a place to live.
|
| Such shenanigans should never be allowed in basic necessities:
| shelter, food, water, medical care.
| Tiktaalik wrote:
| At this point it seems largely to be a performative gesture so
| that the Feds can say they're doing something.
|
| The two biggest jurisdictions where there has been evidence of
| notable foreign investment in housing has been Vancouver and
| Toronto, and foreign buyer taxes were already introduced in those
| places years and years ago.
|
| Prices certainly haven't gone down, but these taxes have had
| substantial impact in changing the sort of products that house
| developers are making. There's been a significant pivot by
| developers toward building purpose built entirely rental
| apartments whereas prior to the taxes developers rarely built
| these, instead favouring condominiums (multi-unit buildings where
| the apts are sold).
|
| Seems like the government should provide some sort of evidence
| that foreign buying remains a problem. They haven't to date
| though perhaps they'll drop some numbers as part of the budget.
| ipaddr wrote:
| Notable in Toronto is 3%
| corpMaverick wrote:
| Increase Property Taxes and channel this money to better services
| in the community and increase infrastructure for new housing
| developments. Build 20 minute neighbors where people do not
| depend so much on their cars. https://www.eugene-
| or.gov/1216/What-is-a-20-Minute-Neighborh...
|
| It will also help to keep the prices lower.
| eljimmy wrote:
| A friend of mine recently bid on a house and came 2nd highest in
| the bids. The winning bid was $75,000 more than his...
|
| That's a good example of blind bidding driving up overall prices.
| dj_mc_merlin wrote:
| > The foreign-buyer ban won't apply to students, foreign workers
| or foreign citizens who are permanent residents of Canada, the
| person said.
|
| Not sure if HN or OP removed the "some" in the title. It is quite
| important here, since the average foreigner in Canada is unlikely
| to be impacted directly.
| cmrdporcupine wrote:
| It's just theatre. They don't want to do anything. Foreign buyers
| are not the source of the price inflation. If they did want to
| cool prices, they'd make a move to curb demand by forcing
| borrowing products to be more stringent, among other actions.
| According to plenty of analysis I've read Canada's problems are
| not primarily supply related. The price inflation is caused in
| large part by low interest rates and the ease of purchasing
| mortgage debt along with psychological willingness to pay more,
| and the dubious regulations around the real estate industry here.
|
| Canada (especially Ontario and BC) has become so addicted to real
| estate inflation, so convinced in the inevitability of "number go
| up" when it comes to housing prices that it would be a toxic pill
| for any political party or government that actually cooled this
| market.
|
| Hundreds of thousands of baby boomer upper middle class Liberal
| voters would _freak out_. People who have banked their entire
| retirement on expecting a payout on their home. And an entire
| generation of people who think this is just what housing does,
| and don 't remember the early 90s housing price slump.
|
| It's toxic, really. Get a group of adults together at a party in
| any home in Toronto etc. and the conversation veers into banal
| banter about housing prices and people live in their houses like
| they live in a _product_ not a _home_ -- what reno can I do to
| increase its value? What did the neighbour 's place sell for?
| What could I get? Blah blah. It's been like this for so long.
|
| Meanwhile, industrial / manufacturing cities like Hamilton,
| Windsor etc. have become unaffordable to the people who actually
| work in the manufacturing jobs. A poison pill for the actual,
| real, productive secondary industry on which Ontario and Quebec
| were traditionally built.
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