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How is the Canadian government allowing this to happen? They should ban Chinese from buying and driving up prices, it's quite obvious what's going on.

by apta 6y ago

gruez 6y ago
Because not everyone's a loser in this case. Homeowners (typically boomers) benefit from this in the form of higher valuations for their home, which means $$$ when the decide to sell, or decide to take out a HELOC.
- apta 6y ago
  That's a very short sighted approach. They're going to pay for it in the long term.
  - gruez 6y ago
    You're right, it's just that the people who are going to pay for it in the long term is not as politically active/connected as the people who's going to benefit from it in the short term (and possibly will die before the consequences appear).
epistasis 6y ago
This is only a small part of the story. Seattle, San Francisco, and Los Angeles all have housing costs far in excess of local wages, and are pushing poorer people out of the cities. These other cities only have a tiny fraction of external money coming in, yet have very similar problems. One common thing, however: building far less housing than the population is growing in the US. This is the primary effect, decades of downzoning and decreasing housing production, without taking into account the needs of the population, just the desires of landlords and homeowners. What this does is push up what percentile of wealth sets the market price. And if at the top of the wealth percentiles there are 10%-20% foreign money, then it seems like a tiny number of people are having a much bigger effect than they are. Cutting out the purchases of those 10-20% wont have a huge effect on prices, but they make a great scapegoat, and let homeowners and landlords continue their profit-seeking schemes for a few more years. Vancouver has both vacancy taxes and foreign purchase taxes. They do not solve the real problem, but are good window dressing and help a tiny fraction of the population.
agilebyte 6y ago
It drives up the price of real estate, all of it. Which means that for those Canadians that bought - it's a huge segment of their net worth. And they vote.

How is the Canadian government allowing this to happen? They should ban Chinese from buying and driving up prices, it's quite obvious what's going on.

by apta 6y ago

How is the Canadian government allowing this to happen? They should ban Chinese from buying and driving up prices, it's quite obvious what's going on.

gruez 6y ago

Because not everyone's a loser in this case. Homeowners (typically boomers) benefit from this in the form of higher valuations for their home, which means $$$ when the decide to sell, or decide to take out a HELOC.

apta 6y ago
That's a very short sighted approach. They're going to pay for it in the long term.
- gruez 6y ago
  You're right, it's just that the people who are going to pay for it in the long term is not as politically active/connected as the people who's going to benefit from it in the short term (and possibly will die before the consequences appear).

epistasis 6y ago

This is only a small part of the story. Seattle, San Francisco, and Los Angeles all have housing costs far in excess of local wages, and are pushing poorer people out of the cities. These other cities only have a tiny fraction of external money coming in, yet have very similar problems. One common thing, however: building far less housing than the population is growing in the US. This is the primary effect, decades of downzoning and decreasing housing production, without taking into account the needs of the population, just the desires of landlords and homeowners. What this does is push up what percentile of wealth sets the market price. And if at the top of the wealth percentiles there are 10%-20% foreign money, then it seems like a tiny number of people are having a much bigger effect than they are. Cutting out the purchases of those 10-20% wont have a huge effect on prices, but they make a great scapegoat, and let homeowners and landlords continue their profit-seeking schemes for a few more years. Vancouver has both vacancy taxes and foreign purchase taxes. They do not solve the real problem, but are good window dressing and help a tiny fraction of the population.

agilebyte 6y ago

It drives up the price of real estate, all of it. Which means that for those Canadians that bought - it's a huge segment of their net worth. And they vote.