4 ms·

I can't speak for Canada, but in the USA; all a foreigner needs to buy a home is cash, and a phone call. I'll get hammered for saying this, but I feel it's wro

I can't speak for Canada, but in the USA; all a foreigner needs to buy a home is cash, and a phone call. I'll get hammered for saying this, but I feel it's wrong on so many levels.

jackcosgrove 10y ago
Especially when that cash can come from dodgy loans in the home country.
vivekd 10y ago
I agree with you that there should be restrictions on foreign investors looking to housing as investment. . . at the same time, I am worried that they are being used as scapegoats to avoid addressing much larger structural economic and legislative problems behind the inflationary price increase. In fact I think these foreign investors are more being attracted by the already inflating prices than actually the culprit in the inflation.
- a_bonobo 10y ago
  >Being used as scapegoats That's what it looks like for me with the Australian housing market where the Chinese are being blamed for increasing prices. China is the biggest foreign investor in the Australian housing market followed by the US with $12 billion out of $34 billion foreign investment in 2013-14 [1], but it can't be the only explanation. As a non-permanent resident you can only buy from the plan, no 'used' houses at all: 'If the FIRB feels that the residential real estate in question is only being purchased by a foreign citizen or company just for the purpose of renting it out, or because the purchaser wants to speculate on the property’s future value, permission to purchase will be refused.' [2] The reasons for the extreme prices are more complex and subsequent Australian governments refuse to change this: banks have been giving out record-low mortgages leading to massive debt and rising houseprices [3], and there's negative gearing, which allows people to overinvest because they can claim later and causes people to hold onto their property, thereby inflating prices [4]. Changing this broken system is detrimental to the parties parties as it would directly cut into income for the rich and the old, and so many blue-collar jobs in Australia depend on building houses. It will only change after the whole bubble implodes. [1] http://www.globalpropertyguide.com/Pacific/Australia/Price-History http://www.globalpropertyguide.com/Pacific/Australia/Price-H... [2] http://www.australia-migration.com/page/Foreign_Investors_Buying_property_as_a_foreigner_or_Temporary_Resident_in_Australia/178 http://www.australia-migration.com/page/Foreign_Investors_Bu... [3] http://www.abc.net.au/news/2016-02-29/verrender-housing-bubble-is-building/7206678 http://www.abc.net.au/news/2016-02-29/verrender-housing-bubb... [4] https://en.wikipedia.org/wiki/Negative_gearing#Australia https://en.wikipedia.org/wiki/Negative_gearing#Australia
  - Khaine 10y ago
    Except, the FIRB does not collect adequate data to truely monitor the acquisition of housing by non-Residents, and these regulations are easily to get around and are often flaunted.
    - a_bonobo 10y ago
      Do you have any proof for either statement? All I could find is the 2014 report on the FIRB which said they would never initiate court proceedings; http://www.abc.net.au/news/2014-11-27/foreign-buyer-rule-enforcement-needs-to-be-strengthened/5921518 http://www.abc.net.au/news/2014-11-27/foreign-buyer-rule-enf... I have no clue how much has changed there since then, and I don't assume anything will change. This still doesn't mean that any of my original points are wrong, the entire system is bad and IMHO Chinese foreign investment is just a scapegoat (if you look at the report, at that time Chinese investment was already the highest but back then very close ($5.9 billion) to US ($4.4 billion) and Canadian ($4.9 billion) investment: Why did no-one complain about either?)
      - Khaine 10y ago
        Seriously? The government held an inquiry into it, and this is the first key thing in the report: "First, there is no accurate or timely data that tracks foreign investment in residential real estate. No-one really knows how much foreign investment there is in residential real estate, nor where that investment comes from." See http://www.aph.gov.au/Parliamentary_Business/Committees/House/Economics/Foreign_investment_in_real_estate/Tabled_Reports http://www.aph.gov.au/Parliamentary_Business/Committees/Hous... http://www.rba.gov.au/publications/submissions/housing-and-housing-finance/pdf/inquiry-foreign-investment-in-residential-real-estate.pdf http://www.rba.gov.au/publications/submissions/housing-and-h... http://www.canberratimes.com.au/federal-politics/political-news/abs-has-patchy-figures-on-foreign-investment-in-homes-20140625-3atp4.html http://www.canberratimes.com.au/federal-politics/political-n... http://theconversation.com/little-hard-data-in-the-hard-area-of-foreign-investment-28893 http://theconversation.com/little-hard-data-in-the-hard-area... Secondly 4 Corners did an investigation into it http://www.abc.net.au/4corners/stories/2015/10/12/4327525.htm http://www.abc.net.au/4corners/stories/2015/10/12/4327525.ht... and https://www.crikey.com.au/2015/10/14/why-are-chinese-buyers-snapping-up-so-much-australian-property/ https://www.crikey.com.au/2015/10/14/why-are-chinese-buyers-...
OneNoteIsFree 10y ago
I didn't know that. What if they are denied visa after that?

I can't speak for Canada, but in the USA; all a foreigner needs to buy a home is cash, and a phone call. I'll get hammered for saying this, but I feel it's wrong on so many levels.

jackcosgrove 10y ago

Especially when that cash can come from dodgy loans in the home country.

vivekd 10y ago

I agree with you that there should be restrictions on foreign investors looking to housing as investment. . . at the same time, I am worried that they are being used as scapegoats to avoid addressing much larger structural economic and legislative problems behind the inflationary price increase. In fact I think these foreign investors are more being attracted by the already inflating prices than actually the culprit in the inflation.

a_bonobo 10y ago
>Being used as scapegoats That's what it looks like for me with the Australian housing market where the Chinese are being blamed for increasing prices. China is the biggest foreign investor in the Australian housing market followed by the US with $12 billion out of $34 billion foreign investment in 2013-14 [1], but it can't be the only explanation. As a non-permanent resident you can only buy from the plan, no 'used' houses at all: 'If the FIRB feels that the residential real estate in question is only being purchased by a foreign citizen or company just for the purpose of renting it out, or because the purchaser wants to speculate on the property’s future value, permission to purchase will be refused.' [2] The reasons for the extreme prices are more complex and subsequent Australian governments refuse to change this: banks have been giving out record-low mortgages leading to massive debt and rising houseprices [3], and there's negative gearing, which allows people to overinvest because they can claim later and causes people to hold onto their property, thereby inflating prices [4]. Changing this broken system is detrimental to the parties parties as it would directly cut into income for the rich and the old, and so many blue-collar jobs in Australia depend on building houses. It will only change after the whole bubble implodes. [1] http://www.globalpropertyguide.com/Pacific/Australia/Price-History http://www.globalpropertyguide.com/Pacific/Australia/Price-H... [2] http://www.australia-migration.com/page/Foreign_Investors_Buying_property_as_a_foreigner_or_Temporary_Resident_in_Australia/178 http://www.australia-migration.com/page/Foreign_Investors_Bu... [3] http://www.abc.net.au/news/2016-02-29/verrender-housing-bubble-is-building/7206678 http://www.abc.net.au/news/2016-02-29/verrender-housing-bubb... [4] https://en.wikipedia.org/wiki/Negative_gearing#Australia https://en.wikipedia.org/wiki/Negative_gearing#Australia
- Khaine 10y ago
  Except, the FIRB does not collect adequate data to truely monitor the acquisition of housing by non-Residents, and these regulations are easily to get around and are often flaunted.
  - a_bonobo 10y ago
    Do you have any proof for either statement? All I could find is the 2014 report on the FIRB which said they would never initiate court proceedings; http://www.abc.net.au/news/2014-11-27/foreign-buyer-rule-enforcement-needs-to-be-strengthened/5921518 http://www.abc.net.au/news/2014-11-27/foreign-buyer-rule-enf... I have no clue how much has changed there since then, and I don't assume anything will change. This still doesn't mean that any of my original points are wrong, the entire system is bad and IMHO Chinese foreign investment is just a scapegoat (if you look at the report, at that time Chinese investment was already the highest but back then very close ($5.9 billion) to US ($4.4 billion) and Canadian ($4.9 billion) investment: Why did no-one complain about either?)
    - Khaine 10y ago
      Seriously? The government held an inquiry into it, and this is the first key thing in the report: "First, there is no accurate or timely data that tracks foreign investment in residential real estate. No-one really knows how much foreign investment there is in residential real estate, nor where that investment comes from." See http://www.aph.gov.au/Parliamentary_Business/Committees/House/Economics/Foreign_investment_in_real_estate/Tabled_Reports http://www.aph.gov.au/Parliamentary_Business/Committees/Hous... http://www.rba.gov.au/publications/submissions/housing-and-housing-finance/pdf/inquiry-foreign-investment-in-residential-real-estate.pdf http://www.rba.gov.au/publications/submissions/housing-and-h... http://www.canberratimes.com.au/federal-politics/political-news/abs-has-patchy-figures-on-foreign-investment-in-homes-20140625-3atp4.html http://www.canberratimes.com.au/federal-politics/political-n... http://theconversation.com/little-hard-data-in-the-hard-area-of-foreign-investment-28893 http://theconversation.com/little-hard-data-in-the-hard-area... Secondly 4 Corners did an investigation into it http://www.abc.net.au/4corners/stories/2015/10/12/4327525.htm http://www.abc.net.au/4corners/stories/2015/10/12/4327525.ht... and https://www.crikey.com.au/2015/10/14/why-are-chinese-buyers-snapping-up-so-much-australian-property/ https://www.crikey.com.au/2015/10/14/why-are-chinese-buyers-...

OneNoteIsFree 10y ago

I didn't know that. What if they are denied visa after that?