5 ms·

In Australia if I recall correctly, foreign buyers are only able to buy newly built homes. Canada would benefit from a similar rule, it would stimulate more ho

In Australia if I recall correctly, foreign buyers are only able to buy newly built homes. Canada would benefit from a similar rule, it would stimulate more housing and not impact the demand for existing homes.

mths 5y ago
I'm not sure Australia should be held as an example of a healthy housing market.
- GrifMD 5y ago
  Definitely not Sydney! We just hit a record median of $1,410,133 AUD https://www.domain.com.au/news/sydney-house-prices-reach-record-median-1410133-rising-more-than-1200-in-a-day-in-just-three-months-1075735/ https://www.domain.com.au/news/sydney-house-prices-reach-rec...
- sk0g 5y ago
  The apartment I lived in before had a few hundred sold, with most sitting empty. The building managers mentioned most of the owners were Chinese, and would rather not rent it out than drop the rent prices, so they had to constantly carry out inspections on apartments that had never been lived in, for a few years now. Absolutely depressing. The bit that weirded me out most was the post boxes. They were quite big, but about half of them were overflowing, which had to have been the result of a few years of accumulation at least. If the buying price was 40-50% lower, I could save up for a deposit in a year or two, but the crazy house prices here in Australia are not getting any better at all. It also feels morally wrong to be investing at the cost of someone being able to afford a roof over their heads, so maybe renting it is for me. Of course, the city also is going to be hosting the Olympics in a while, so that solidifies my moving away plans!
  - sdenton4 5y ago
    Move into one of the flats with an overflowing box and get it by adverse possession...
  - refurb 5y ago
    Buying a house and leaving it empty is incredibly common in China and other Asian countries. You’ll see entire developments with nobody living there and most of the units unfinished inside. The reason I was told was:1) with crappy equity markets property is a safer investment, 2) not many questions about where the money comes from, 3) very low or non-existent property taxes (costs nothing to hold) and 4) as these countries get wealthier demand for housing only goes up.
exporectomy 5y ago
Isn't the problem in Australia (and New Zealand) mainly caused by first home buyers? They seem to pay the maximum the bank will lend them with no regard for being profitable or a good investment. Just get the best house possible at any cost. Once they own them, they fill them with lower occupancy than investors do, so the supply of housing effectively decreases. I'm one of those people. My house used to be a rental with 5 people in it. Now we have only 3. My neighbor owner has 1 person in a 3 bedroom house.
- spfzero 5y ago
  The prices are not being driven up by buyers with 5% down payments. They are being driven up by 100% cash buyers, people moving cash across national boundaries. Just look at the percentage of "all-cash" offers. That tells the whole story.
  - renewiltord 5y ago
    Considering that foreigners have to buy new build, how do you reconcile that with your view? What evidence would cause you to think it is not foreigners?
    - kwere 5y ago
      They still heat the resale market
    - spfzero 5y ago
      I guess I didn't know that was a law? It's not in the U.S. Foreigners can buy anything they want. But I don't think the distinction is meaningful, higher new build prices would drag up existing home prices.
- CTDOCodebases 5y ago
  The problem is caused by a whole number of factors that incentivise people to buy houses they won’t live in. Housing in Sydney is becoming a self fulfilling prophecy. The more people spend on it the more it’s value increases hence attracting more investors who drive prices up. In order for this to stop the majority of the public will need to find this whole situation unacceptable. I find it absurd that citizens from countries that disallow Australians to buy property can buy residential property here in Sydney. Apparently helping foreign citizens to avoid taxation/capital controls while propping up the construction/banking sector is more important than looking after the average citizens best interests.
fastball 5y ago
In Indonesia, only citizens or businesses with part ownership by citizens are allowed to own property, and I think this is probably the right way to go for most other countries as well. Unlike the vast majority of other human endeavors, land actually is a zero sum game, at least until we are a space-faring species.
- bookofsand 5y ago
  Even if we become a space faring species, land will still be a zero sum game. * Within the Solar System the amount of land available on bodies with not-crushing-gravity is limited to a few times the Earth surface. This includes hospitable bodies like Venus, Titan or the Moon. The entire area of Mars is slightly smaller than Earth's land area, with climate conditions significantly worse than Antarctica. Sobering map: https://brilliantmaps.com/solar-system-surface https://brilliantmaps.com/solar-system-surface * Inter-stellar travel is subject to prohibitive time and energy costs. Physically speaking there is no way for Alpha Centaurians to visit their Earth properties on a regular basis, or vice-versa. This renders the whole concept of 'property owned by foreign stellar body inhabitants' moot.
  - seanmcdirmid 5y ago
    Land will stop being a zero sum game if we can ever figure out how to create pocket spaces. But then again, speculation has hit even virtual real estate before, so what do I know?
  - Apocryphon 5y ago
    Just build orbital colonies.
- CTDOCodebases 5y ago
  If it wasn’t for this law Bali would be 100% foreign owned.
- em500 5y ago
  > Unlike the vast majority of other human endeavors, land actually is a zero sum game, at least until we are a space-faring species. Around 17% of the Netherlands is reclaimed from the sea or lakes. The largest project (the Flevopolder [1]) was 240,000 acres, reclaimed in the 1950s and 1960s. Most of the land is still just meadows/grasslands (it has 2 towns with less than 350k inhabitants in total). Meanwhile, in Amsterdam (less than 30min away by car or train) house prices keep increasing by 10%+ YoY. It seems that lack of physical land is not the main limiting factor. [1] https://en.wikipedia.org/wiki/Flevopolder https://en.wikipedia.org/wiki/Flevopolder
holografix 5y ago
I sincerely hope this is incorrect.
BelenusMordred 5y ago
> foreign buyers are only able to buy newly built homes In theory, yes, in reality the largest single residential purchase in the country was $35m and splashed all over the front page of newspapers. It took them 5 years later to realise it was an illegal purchase by a foreigner after he had a different dispute with the tax office. If that sale slips through what hope do you actually have for any others?
- CTDOCodebases 5y ago
  For wealthy individuals they can basically buy their residency by operating/investing in an Australian business. After that they apply for a Permanent Residency visa. Once they are a resident they can purchase whatever property they wish just like an Australian Citizen.
  - BelenusMordred 5y ago
    Yes but that's tangential, this person outright bought an existing property as a foreigner knowing full well he's not allowed to. Not a single agent, conveyancer or bureaucrat in the entire process ever tried to stop it from happening. The millions of people who looked at it on the front page of paper didn't think twice. You can buy citizenship or residency anywhere and get the perks, but that has nothing to do with the point I was making here. The point is that laws are useless until they are enforced.
    - CTDOCodebases 5y ago
      I agree. I was just adding that even though the laws made to appease the public were created there are still loopholes that invalidate the claim that “only new properties can be sold to foreign citizens.” It’s untrue and even if it was it still ignores the fact that the property market doesn’t distinguish old from new.
kennywinker 5y ago
That sounds like a recipe for teardowns, which are already a huge problem in vancouver. Incentivizing turning an old lower value house into a new high value house isn’t going to help people.

mths 5y ago

I'm not sure Australia should be held as an example of a healthy housing market.

GrifMD 5y ago
Definitely not Sydney! We just hit a record median of $1,410,133 AUD https://www.domain.com.au/news/sydney-house-prices-reach-record-median-1410133-rising-more-than-1200-in-a-day-in-just-three-months-1075735/ https://www.domain.com.au/news/sydney-house-prices-reach-rec...
sk0g 5y ago
The apartment I lived in before had a few hundred sold, with most sitting empty. The building managers mentioned most of the owners were Chinese, and would rather not rent it out than drop the rent prices, so they had to constantly carry out inspections on apartments that had never been lived in, for a few years now. Absolutely depressing. The bit that weirded me out most was the post boxes. They were quite big, but about half of them were overflowing, which had to have been the result of a few years of accumulation at least. If the buying price was 40-50% lower, I could save up for a deposit in a year or two, but the crazy house prices here in Australia are not getting any better at all. It also feels morally wrong to be investing at the cost of someone being able to afford a roof over their heads, so maybe renting it is for me. Of course, the city also is going to be hosting the Olympics in a while, so that solidifies my moving away plans!
- sdenton4 5y ago
  Move into one of the flats with an overflowing box and get it by adverse possession...
- refurb 5y ago
  Buying a house and leaving it empty is incredibly common in China and other Asian countries. You’ll see entire developments with nobody living there and most of the units unfinished inside. The reason I was told was:1) with crappy equity markets property is a safer investment, 2) not many questions about where the money comes from, 3) very low or non-existent property taxes (costs nothing to hold) and 4) as these countries get wealthier demand for housing only goes up.

exporectomy 5y ago

Isn't the problem in Australia (and New Zealand) mainly caused by first home buyers? They seem to pay the maximum the bank will lend them with no regard for being profitable or a good investment. Just get the best house possible at any cost. Once they own them, they fill them with lower occupancy than investors do, so the supply of housing effectively decreases. I'm one of those people. My house used to be a rental with 5 people in it. Now we have only 3. My neighbor owner has 1 person in a 3 bedroom house.

spfzero 5y ago
The prices are not being driven up by buyers with 5% down payments. They are being driven up by 100% cash buyers, people moving cash across national boundaries. Just look at the percentage of "all-cash" offers. That tells the whole story.
- renewiltord 5y ago
  Considering that foreigners have to buy new build, how do you reconcile that with your view? What evidence would cause you to think it is not foreigners?
  - kwere 5y ago
    They still heat the resale market
  - spfzero 5y ago
    I guess I didn't know that was a law? It's not in the U.S. Foreigners can buy anything they want. But I don't think the distinction is meaningful, higher new build prices would drag up existing home prices.
CTDOCodebases 5y ago
The problem is caused by a whole number of factors that incentivise people to buy houses they won’t live in. Housing in Sydney is becoming a self fulfilling prophecy. The more people spend on it the more it’s value increases hence attracting more investors who drive prices up. In order for this to stop the majority of the public will need to find this whole situation unacceptable. I find it absurd that citizens from countries that disallow Australians to buy property can buy residential property here in Sydney. Apparently helping foreign citizens to avoid taxation/capital controls while propping up the construction/banking sector is more important than looking after the average citizens best interests.

fastball 5y ago

In Indonesia, only citizens or businesses with part ownership by citizens are allowed to own property, and I think this is probably the right way to go for most other countries as well. Unlike the vast majority of other human endeavors, land actually is a zero sum game, at least until we are a space-faring species.

bookofsand 5y ago
Even if we become a space faring species, land will still be a zero sum game. * Within the Solar System the amount of land available on bodies with not-crushing-gravity is limited to a few times the Earth surface. This includes hospitable bodies like Venus, Titan or the Moon. The entire area of Mars is slightly smaller than Earth's land area, with climate conditions significantly worse than Antarctica. Sobering map: https://brilliantmaps.com/solar-system-surface https://brilliantmaps.com/solar-system-surface * Inter-stellar travel is subject to prohibitive time and energy costs. Physically speaking there is no way for Alpha Centaurians to visit their Earth properties on a regular basis, or vice-versa. This renders the whole concept of 'property owned by foreign stellar body inhabitants' moot.
- seanmcdirmid 5y ago
  Land will stop being a zero sum game if we can ever figure out how to create pocket spaces. But then again, speculation has hit even virtual real estate before, so what do I know?
- Apocryphon 5y ago
  Just build orbital colonies.
CTDOCodebases 5y ago
If it wasn’t for this law Bali would be 100% foreign owned.
em500 5y ago
> Unlike the vast majority of other human endeavors, land actually is a zero sum game, at least until we are a space-faring species. Around 17% of the Netherlands is reclaimed from the sea or lakes. The largest project (the Flevopolder [1]) was 240,000 acres, reclaimed in the 1950s and 1960s. Most of the land is still just meadows/grasslands (it has 2 towns with less than 350k inhabitants in total). Meanwhile, in Amsterdam (less than 30min away by car or train) house prices keep increasing by 10%+ YoY. It seems that lack of physical land is not the main limiting factor. [1] https://en.wikipedia.org/wiki/Flevopolder https://en.wikipedia.org/wiki/Flevopolder

holografix 5y ago

I sincerely hope this is incorrect.

BelenusMordred 5y ago

> foreign buyers are only able to buy newly built homes In theory, yes, in reality the largest single residential purchase in the country was $35m and splashed all over the front page of newspapers. It took them 5 years later to realise it was an illegal purchase by a foreigner after he had a different dispute with the tax office. If that sale slips through what hope do you actually have for any others?

CTDOCodebases 5y ago
For wealthy individuals they can basically buy their residency by operating/investing in an Australian business. After that they apply for a Permanent Residency visa. Once they are a resident they can purchase whatever property they wish just like an Australian Citizen.
- BelenusMordred 5y ago
  Yes but that's tangential, this person outright bought an existing property as a foreigner knowing full well he's not allowed to. Not a single agent, conveyancer or bureaucrat in the entire process ever tried to stop it from happening. The millions of people who looked at it on the front page of paper didn't think twice. You can buy citizenship or residency anywhere and get the perks, but that has nothing to do with the point I was making here. The point is that laws are useless until they are enforced.
  - CTDOCodebases 5y ago
    I agree. I was just adding that even though the laws made to appease the public were created there are still loopholes that invalidate the claim that “only new properties can be sold to foreign citizens.” It’s untrue and even if it was it still ignores the fact that the property market doesn’t distinguish old from new.

kennywinker 5y ago

That sounds like a recipe for teardowns, which are already a huge problem in vancouver. Incentivizing turning an old lower value house into a new high value house isn’t going to help people.