5 ms·

As an Australian, every single problem you have, we also have. It sucks. I'm starting to come to the view that you should only be able to own one house, and yo

As an Australian, every single problem you have, we also have. It sucks. I'm starting to come to the view that you should only be able to own one house, and you've got to live in it otherwise you pay full market rent on the vacancy. I think about the housing situation as an almost existential economic threat. With the scale 'money' sitting in housing the banking sector is acting like a parasite starving potential capitol from growth opportunities. It's really grim.

DeBraid 6y ago
Not saying what is / isn't a bubble, but enjoyed this discussion here on Aussie / Canadian RE bubble. https://youtu.be/2MLZxJuzT5E?t=2802 https://youtu.be/2MLZxJuzT5E?t=2802 Joe Walker: "Sydney and Melbourne are 2 of the most expensive cities in the world..." Tyler Cowen: "AND THEY SHOULD BE! Great food, great views, relatively competent government. Are there 2 nicer places to live on Earth? Maybe these places are actually undervalued?" Turns out really great places to live are extremely rare (Toronto, Vancouver) and expensive for good reason.
- Clewza313 6y ago
  Toronto isn't exactly a match for Sydney when it comes to climate or scenery though, and while Australian politics has its warts, the mayor of Sydney has yet to be caught on camera smoking crack.
- gonzo41 6y ago
  I got a day trip on Sydney harbour on a yacht a few years back. It was really nice. I can imagine a very expensive day for the host. I wish it was my yacht, because it was a real indulgence. Personally, I would have been pretty happy to just take the manly ferry a few times and have a sandwich. Anyway, as we were boating about the proper harbour side mansions that sit close to the water. I noticed a few things. A lot of them were empty. I asked about this and the finance guys with us mentioned that most of them were land banking assets for Chinese money which isn't safe in CCP banks. I'm not sure how real this is, but if I owned a home on the waterfront in Sydney, I'd never leave the balcony. Anyway, the effect is that rich foreigners own the places where our rich countrymen used to live. So now they've moved a street back and pushed all the upper middle class into the inner suburbs and now the regular professional folk our on the outer rim. And if you aren't rich, then your over mortgaged and live in a flood plain. Which just flooded. Sydney is nice, but it's getting less nice, we generally need more cities in Australia. But what we really need is people to treat the family home as that. A place for families to grow and not some asset class.
- 34679 6y ago
  I've been saying for years that there should be a tiered system of property taxation based on the number of properties owned by an individual or entity. It could be a simple as using a multiplier. Own 3 taxable properties? Your rate for each is 3x the base rate. Unsustainable? Great, lower the base rate.
- dv_dt 6y ago
  That Cowen view is a very blasé view of inequality. So the great city to live ends up prices for the wealthy served by an underclass that lives in servitude, unable to ever own their own home. And worse it’s that way for a super rich elite that buys assets and leaves them unused for most of the year.
- neilparikh 6y ago
  > Great food, great views, relatively competent government. The thing is, none of these things are a function of previous owner or landlord, so why should I be paying them for these great things? Put another way, I'm honestly glad to pay lots of money to live in Toronto, because what I get for that is amazing. But I'd rather just pay that directly to the people who made the city great (the community as a whole), rather than someone who simply had the luck to buy at the right time.
eloff 6y ago
We have a very high vacant home tax in Vancouver. There are also taxes on foreigners buying real estate. The pandemic has put a serious dent in foreign buyers as well. None of it made much difference. Homes are selling after just days on the market, and as much as half a million above asking. Putting a for sale sign on your lawn is akin to chumming shark infested waters. It begins a bidding frenzy. I don't know what the solution is, but I'm ready to throw in the towel and leave the country for more affordable locales as soon as my lease is up. I don't work a local job, there's no reason for me to be here aside from the fact that I love the city and the country.
- balfirevic 6y ago
  > I don't know what the solution is Build more homes.
  - eloff 6y ago
    I don't think it's possible to build enough homes in Vancouver. It's part of a solution, but a shift to higher density housing is also required.
    - balfirevic 6y ago
      I certainly didn't mean "build more homes, but only the low density kind".
- hhjinks 6y ago
  Vacancy tax isn't enough. Any residential property you own that is not your primary dwelling needs to be highly taxed. With how low western interest rates are currently, it's way too profitable to own property you don't ever plan to use yourself. Housing is essential. It's bordering on a human right. When only the people who already own property can afford the prices, you've effectively created an insurmoutable barrier between the haves and the have-nots. The solution is to build more homes in the areas with jobs, and to make it unprofitable for private actors to own rental properties.

DeBraid 6y ago

Not saying what is / isn't a bubble, but enjoyed this discussion here on Aussie / Canadian RE bubble. https://youtu.be/2MLZxJuzT5E?t=2802 https://youtu.be/2MLZxJuzT5E?t=2802 Joe Walker: "Sydney and Melbourne are 2 of the most expensive cities in the world..." Tyler Cowen: "AND THEY SHOULD BE! Great food, great views, relatively competent government. Are there 2 nicer places to live on Earth? Maybe these places are actually undervalued?" Turns out really great places to live are extremely rare (Toronto, Vancouver) and expensive for good reason.

Clewza313 6y ago
Toronto isn't exactly a match for Sydney when it comes to climate or scenery though, and while Australian politics has its warts, the mayor of Sydney has yet to be caught on camera smoking crack.
gonzo41 6y ago
I got a day trip on Sydney harbour on a yacht a few years back. It was really nice. I can imagine a very expensive day for the host. I wish it was my yacht, because it was a real indulgence. Personally, I would have been pretty happy to just take the manly ferry a few times and have a sandwich. Anyway, as we were boating about the proper harbour side mansions that sit close to the water. I noticed a few things. A lot of them were empty. I asked about this and the finance guys with us mentioned that most of them were land banking assets for Chinese money which isn't safe in CCP banks. I'm not sure how real this is, but if I owned a home on the waterfront in Sydney, I'd never leave the balcony. Anyway, the effect is that rich foreigners own the places where our rich countrymen used to live. So now they've moved a street back and pushed all the upper middle class into the inner suburbs and now the regular professional folk our on the outer rim. And if you aren't rich, then your over mortgaged and live in a flood plain. Which just flooded. Sydney is nice, but it's getting less nice, we generally need more cities in Australia. But what we really need is people to treat the family home as that. A place for families to grow and not some asset class.
34679 6y ago
I've been saying for years that there should be a tiered system of property taxation based on the number of properties owned by an individual or entity. It could be a simple as using a multiplier. Own 3 taxable properties? Your rate for each is 3x the base rate. Unsustainable? Great, lower the base rate.
dv_dt 6y ago
That Cowen view is a very blasé view of inequality. So the great city to live ends up prices for the wealthy served by an underclass that lives in servitude, unable to ever own their own home. And worse it’s that way for a super rich elite that buys assets and leaves them unused for most of the year.
neilparikh 6y ago
> Great food, great views, relatively competent government. The thing is, none of these things are a function of previous owner or landlord, so why should I be paying them for these great things? Put another way, I'm honestly glad to pay lots of money to live in Toronto, because what I get for that is amazing. But I'd rather just pay that directly to the people who made the city great (the community as a whole), rather than someone who simply had the luck to buy at the right time.

eloff 6y ago

We have a very high vacant home tax in Vancouver. There are also taxes on foreigners buying real estate. The pandemic has put a serious dent in foreign buyers as well. None of it made much difference. Homes are selling after just days on the market, and as much as half a million above asking. Putting a for sale sign on your lawn is akin to chumming shark infested waters. It begins a bidding frenzy. I don't know what the solution is, but I'm ready to throw in the towel and leave the country for more affordable locales as soon as my lease is up. I don't work a local job, there's no reason for me to be here aside from the fact that I love the city and the country.

balfirevic 6y ago
> I don't know what the solution is Build more homes.
- eloff 6y ago
  I don't think it's possible to build enough homes in Vancouver. It's part of a solution, but a shift to higher density housing is also required.
  - balfirevic 6y ago
    I certainly didn't mean "build more homes, but only the low density kind".
hhjinks 6y ago
Vacancy tax isn't enough. Any residential property you own that is not your primary dwelling needs to be highly taxed. With how low western interest rates are currently, it's way too profitable to own property you don't ever plan to use yourself. Housing is essential. It's bordering on a human right. When only the people who already own property can afford the prices, you've effectively created an insurmoutable barrier between the haves and the have-nots. The solution is to build more homes in the areas with jobs, and to make it unprofitable for private actors to own rental properties.