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Canada to ban foreigners from buying homes

• bawolff 4y ago
  I'm really doubtful. Foreigners are an easy group to blame, and they don't vote. I think the real problem is a supply crunch being exasperated by domestic speculators looking to invest money and not having a whole lot of good places to put it.
• nly 4y ago
  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.
• andrewstuart 4y ago
  My anger about housing prices led me to create Real Estate Rebellion: https://www.reddit.com/r/realestaterebellion/ https://www.reddit.com/r/realestaterebellion/
  • Dracophoenix 4y ago
    Why do you think real estate shouldn't be an investment? Time, money, and effort to secure land, materials, labor in order to build real estate. This is the same economic principle for any other commodity.
  • deleted 4y ago
    [deleted]
• msie 4y ago
  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/Price-History https://www.globalpropertyguide.com/Pacific/New-Zealand/Pric...
• 3qz 4y ago
  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 4y ago
    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.
    • OJFord 4y ago
      And force couples to buy in one (the citizen)'s name, etc.
    • 3qz 4y ago
      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.
• GoOnThenDoTell 4y ago
  What about companies?
  • annoyingnoob 4y ago
    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.
• RandyRanderson 4y ago
  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_industries https://en.wikipedia.org/wiki/Economy_of_Canada#Key_industri... [1] https://betterdwelling.com/canadas-economy-hits-a-new-record-for-dependency-on-real-estate-investment/ https://betterdwelling.com/canadas-economy-hits-a-new-record...
  • trinovantes 4y ago
    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-manitoba-lead-the-provinces-in-canadas-chronic-housing-shortage-says-scotiabank https://financialpost.com/news/economy/ontario-alberta-and-m... https://www.livabl.com/2021/05/canada-housing-market-most-undersupplied-g7.html 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_from_lake_ontario_to_lake_simcoe/ https://www.reddit.com/r/toronto/comments/twj89s/yonge_st_fr...
    • zukzuk 4y ago
      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.
• VincentEvans 4y ago
  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/real-estate-investing/reit/ https://www.fool.com/investing/stock-market/market-sectors/r...
  • tqi 4y ago
    > 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.
    • hengri 4y ago
      It's low interest rates to blame
      • VincentEvans 4y ago
        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?
• loceng 4y ago
  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.
  • peepop6 4y ago
    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.
    • loceng 4y ago
      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 4y ago
      Cause we don't build homes.
    • Tiktaalik 4y ago
      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.
• tqi 4y ago
  Why not just have occupancy requirements / vacancy tax?
  • hemreldop 4y ago
    That’s a ridiculous amount of regulation to enforce and frankly is very restrictive. Why shouldn’t people have two homes.
    • sublimefire 4y ago
      Because there is not enough for everyone and the property should not be treated as an investment.
  • Spivak 4y ago
    They do! This is in addition to that.
  • Tiktaalik 4y ago
    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.
• stephenhuey 4y ago
  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.
  • gareth_untether 4y ago
    There's pretty tight rules about leaving properties empty. Daily fines in the thousands.
    • barbazoo 4y ago
      https://vancouver.ca/home-property-development/empty-homes-tax.aspx 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.
  • msie 4y ago
    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.
    • neonate 4y ago
      20% is a lot in a tight market.
    • robonerd 4y ago
      > 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.
• throwawaymanbot 4y ago
• Joakal 4y ago
  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.
• mperham 4y ago
  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.
  • barbazoo 4y ago
    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-housing-development/ https://globalnews.ca/news/8641905/bc-local-governments-hous...
  • dsnr 4y ago
    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.
    • hemreldop 4y ago
      Well investment companies buy to resell. If there is a glut of new houses prices will definitely go down in the medium term.
      • dsnr 4y ago
        In Germany they mostly buy to rent out and I’m sure it’s happening in other places as well.
      • ClumsyPilot 4y ago
        > 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
• the_optimist 4y ago
  Do this in the US too, please. Also farmland.
  • Spivak 4y ago
    Would this solve anything except to make current farmland owners essentially landlords to the same huge corporations working the land?
  • bogota 4y ago
    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 4y ago
      Housing in the US is already relatively cheap outside of coastal urban centers, there’s just far less demand.
• jenkstom 4y ago
  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 4y ago
    [deleted]
• beebmam 4y ago
  Why can't we increase property taxes for businesses that own homes? And, for individuals who own more than, let's say, two homes?
  • __turbobrew__ 4y ago
    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 4y ago
      Singapore has a few ways to address housing crisis no? HDB and a few restrictions on who can purchase it. etc.
  • jimmydeans 4y ago
    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.
  • cwkoss 4y ago
    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.
  • bregma 4y ago
    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.
  • tempestn 4y ago
• axg11 4y ago
  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 4y ago
    [deleted]
• VirusNewbie 4y ago
  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.
  • TheCowboy 4y ago
    Tax law changes don't change zoning policies or other political obstacles to construction. People exist with money willing to invest into construction if they could. People also like to hate on politically-connected 'greedy developers' but they create an environment where that's the type of companies that are going to thrive. Maybe people here would do better to visualize it in startup terms where people are willing to put excess capital to use. Imagine you needed to get approval of neighborhood committees and so on to do a startup. Would YCominator still look the same? I don't think it would. You would have VCs that more about forming cozy relationships with politicians and poker brokers.
• incomingpain 4y ago
  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 4y ago
    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 4y ago
    I wonder how many homes are bought and sold through shell companies, family members, etc?
  • bryanlarsen 4y ago
    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.
    • appleiigs 4y ago
      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.
• daxfohl 4y ago
  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?
  • msie 4y ago
    No.
  • francisofascii 4y ago
    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.
  • daxfohl 4y ago
    My takeaway after reading all the other comments is that nobody knows, but everybody has someone to blame.
• agentultra 4y ago
  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.
• nacho2sweet 4y ago
  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 4y ago
    > 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.
  • digianarchist 4y ago
    >very low property taxes and high employment tax The US is the exception to that rule. Canada mirrors most of Europe.
• msie 4y ago
  I put this here. Tricon owns 30,000 homes. https://www.reddit.com/r/toronto/comments/tpym75/toronto_landlord_who_owns_30000_houses_explains/ https://www.reddit.com/r/toronto/comments/tpym75/toronto_lan...
• Jyaif 4y ago
  > 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.
• neonate 4y ago
  https://archive.ph/oWGMM https://archive.ph/oWGMM
• paulgb 4y ago
  > 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.
  • nly 4y ago
    We have a similar scheme in the UK, where you can save £4000/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.
    • DaedPsyker 4y ago
      You can't open a help to buy ISA any longer, the government honours existing accounts though.
      • edent 4y ago
        You can use a LISA for a first property.
      • oakesm9 4y ago
        Lifetime ISAs as a different scheme than help to buy ISAs and are still available https://www.moneysavingexpert.com/savings/lifetime-isas/ https://www.moneysavingexpert.com/savings/lifetime-isas/
    • actuator 4y ago
      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
• boplicity 4y ago
  > 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.
  • mh8h 4y ago
    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-1.6191259 https://www.cbc.ca/news/business/blind-bidding-real-estate-1... https://www.ctvnews.ca/business/study-supports-blind-bidding-on-real-estate-but-one-realtor-argues-transparency-better-for-homebuyers-1.5643383 https://www.ctvnews.ca/business/study-supports-blind-bidding...
  • richbell 4y ago
    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.
    • imposterr 4y ago
      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.
• gorjusborg 4y ago
  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.
• knownjorbist 4y ago
  Would've been better to just implement a land value tax.
  • dane-pgp 4y ago
    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-argument-for-ubi-as-a-right/ https://basicincometoday.com/thomas-paines-centuries-old-arg...
  • joshlemer 4y ago
    How would this be any different to what we have now (a property tax)?
    • francisofascii 4y ago
      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.
    • paconbork 4y ago
      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.
• raajg 4y ago
  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 4y ago
    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.
• thrwy_ywrht 4y ago
  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.
  • paulpauper 4y ago
    and also build more jobs, nicer neighborhoods and everything else that makes some areas more expensive than others
  • recursive 4y ago
    That only works if people are living in all the homes.
  • Gigachad 4y ago
    Problem is urban sprawl has reached its limit so more homes means more apartments. And millennials accustomed to freestanding houses in suburbs will continue to rent houses and ignore the new apartments while claiming there is still a housing crisis.
    • joshlemer 4y ago
      I think millennials would happily adjust to condo living if they were affordable and large enough to comfortably live in with room to spare like in a house (1400+ Square feet, 3+ bedrooms)
  • digianarchist 4y ago
    The feds don't really get a say in home building, it's up to the provinces like Ontario who aren't really feeling the pressure to do anything, after rejecting the most impactful recommendations from a recent task force on affordability [1]. The NIMBY mayors of cities such as Mississauga pushed back [2] and the province has effectively backed down. [1] - https://www.cbc.ca/news/canada/toronto/ontario-doug-ford-housing-affordability-plan-1.6395946 https://www.cbc.ca/news/canada/toronto/ontario-doug-ford-hou... [2] - https://twitter.com/BonnieCrombie/status/1507080290602299392 https://twitter.com/BonnieCrombie/status/1507080290602299392
• jimmydeans 4y ago
  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 4y ago
    > 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).
    • jimmydeans 4y ago
• jmyeet 4y ago
  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 4y ago
    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.
• hello_popppet 4y ago
  I posted this earlier - https://news.ycombinator.com/item?id=30945227 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.
• RspecMAuthortah 4y ago
  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-market-1.4413882 https://www.cbc.ca/news/business/housing-canada-policy-marke... https://www.thestar.com/politics/federal-election/2021/08/24/experts-shrug-at-liberal-housing-proposals-saying-they-wont-do-much-to-fix-crisis.html https://www.thestar.com/politics/federal-election/2021/08/24...
  • tomatowurst 4y ago
    When the going gets tough the ruling party just scapegoats a minority group who they perceive to be socioeconomically advantaged. ex) Jews in Europe
  • dfas23 4y ago
    Capital gains on primary residence is a non-starter. 65% of households in Canada own their homes. It would be political suicide.
• akyu 4y ago
• FpUser 4y ago
  It is about time. With today's the majority can not hope to ever own their place.
• 1270018080 4y ago
  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.
• paulpauper 4y ago
  "fuck!!" - someone who just bought a home before this was announced.
  • joshlemer 4y ago
    Don't worry, you'll be well taken care of. No government will ever mess with the wealthy homeowner class.
  • dfas23 4y ago
    vote.
• lbrito 4y ago
  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_ 4y ago
    https://shapeyourcity.ca/vancouver-plan 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.
• _aavaa_ 4y ago
  "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 4y ago
    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 4y ago
    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.
• joshlemer 4y ago
  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.
  • seanc 4y ago
    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 4y ago
      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".
    • tempestn 4y ago
• twa999 4y ago
  good first step, but now ban corporate landlords if you're really serious.
  • dane-pgp 4y ago
    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.
• rs999gti 4y ago
  Where will Chinese/Russian/Saudi millionaires and billionaires now offshore their wealth if they can't do it in Canadian real estate?
  • tomatowurst 4y ago
    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.
• gunfighthacksaw 4y ago
  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…
• Tiktaalik 4y ago
  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 4y ago
    Notable in Toronto is 3%
• hello_popppet 4y ago
  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.
  • joshlemer 4y ago
    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 4y ago
      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.”
  • timbit42 4y ago
    Pressure will go down as the baby boomers die off.
  • ryeights 4y ago
    > 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.
• LAC-Tech 4y ago
  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.
  • philliphaydon 4y ago
    They couldn’t exclude Australia and Singapore due to existing trade agreements. Having lived in singapore for 10 years tho people there seem far more interested in moving to australia to live.
    • LAC-Tech 4y ago
      I'm not talking about what the justifications are. I'm talking about how the media decided it was a 'foreign buyer ban' despite very obviously not being one.
      • philliphaydon 4y ago
        I don’t see how it’s not? Just because 2 countries couldn’t be included in the ban due to trade agreements doesn’t change the fact people can no longer go on a website and buy a house in nz without ever setting foot in the country.
        • LAC-Tech 4y ago
          I guess it depends on what your definition of foreign is. For me, clearing customs doesn't make you a local. My wife is a permanent resident, FWIW.
• deleted 4y ago
  [deleted]
• swframe2 4y ago
  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.
• dj_mc_merlin 4y ago
  > 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.
• rsync 4y ago
  The article only speaks of small, single family properties in urban areas. What about farmland or ranch property or commercial buildings?
  • palijer 4y ago
    The day cities start starving and devolve into anarchy is the day we see more serious legislation introduced to improve life for farmers.
• noasaservice 4y ago
  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.
• corpMaverick 4y ago
  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-Neighborhood https://www.eugene-or.gov/1216/What-is-a-20-Minute-Neighborh... It will also help to keep the prices lower.
• gregable 4y ago
  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 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/news/2021/12/canada-welcomes-the-most-immigrants-in-a-single-year-in-its-history.html 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 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 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://en.m.wikipedia.org/wiki/Canadian_property_bubble - https://www.bloomberg.com/news/articles/2021-06-15/world-s-most-bubbly-housing-markets-flash-2008-style-warnings https://www.bloomberg.com/news/articles/2021-06-15/world-s-m... - https://betterdwelling.com/the-toronto-real-estate-bubble-now-has-1-in-59-workers-selling-homes/ https://betterdwelling.com/the-toronto-real-estate-bubble-no... - https://seekingalpha.com/article/4477223-canadian-housing-market-party-is-over https://seekingalpha.com/article/4477223-canadian-housing-ma... - https://financialpost.com/executive/executive-summary/posthaste-canadas-housing-boom-has-been-unprecedented-the-fallout-will-be-too-say-these-economists https://financialpost.com/executive/executive-summary/postha...
• eljimmy 4y ago
  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.
• georgeburdell 4y ago
  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 4y ago
    Limit ownership to only 1 property for international students and foreign workers.
• rekabis 4y ago
  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.
  • hello_moto 4y ago
    > 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 4y ago
• exdsq 4y ago
  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 4y ago
    This is called “Blockbusting”. Wonderful.
    • exdsq 4y ago
      I think it was a little more altruistic than that - he just found people with criminal backgrounds were struggling to find places and on the whole were just as reliable to pay rent on time because they appreciated the opportunity
      • jl2718 4y ago
        Altruism might be believable if: 1. He lived in the same neighborhood as his renters, and not 1000s of miles away in the UK 2. He didn’t kick them out after a few years by flipping it. 3. It was a slow, long-term acquisition of rentals for income rather than flipping profit. Sorry; the facts indicate a scheme. I don’t begrudge him personally; there is always some government program that makes this chicanery profitable at the expense of the working class, and somebody else would have done it.
• irrational 4y ago
  I expect Canada to become prime real estate as climate change worsens. This is smart to start getting in front of it now.
• _smmt 4y ago
  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.
• Element_ 4y ago
  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.
• resalisbury 4y ago
  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 4y ago
    "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.
    • thehappypm 4y ago
      Why do you think this? Is housing immune from Econ 101 supply and demand?
• saos 4y ago
  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
• givemeethekeys 4y ago
  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.
• cmrdporcupine 4y ago
  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.
• jedberg 4y ago
  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.
• halfjoking 4y ago
  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?”
• TeeMassive 4y ago
  This won't change much. They'll just send their children instead. It's already happening anyway.
• jimmaswell 4y ago
  Awesome, when can we get that in the US?
• jrobbins 4y ago
  I see a lot of possible root causes being mentioned, e.g., blind bidding, zoning, foreign buyers, corporate buyers, and the vested interests of existing home owners. Here's two more: income inequality, and the construction skills crisis. Income inequality: You might think "prices are crazy, no one can afford this", but the fact is that some people are affording it, even repeatedly. Depending on your family and circle of friends, you may know someone who owns 2, 3 or 4 homes or one over-sized home. It is not uncommon, just not usually discussed openly. They buy or retain homes and then rent them rather than selling. Why horde houses? Some people just like to see a tangible asset. Most upper middle class people have most of their assets in stocks. But with stocks up significantly in 2020 and 2021, a lot of people are ready to diversify into real estate. And those who own homes can watch them appreciate even if the home sits empty. Construction skills crisis: At least in the US, there just aren't enough construction workers to fill construction jobs. You could open up zoning rules, but that won't make housing starts instantly increase, because there are not enough workers. A generation of people has been taught that knowledge worker jobs are the best. I think that is a largely correct. Even with construction salaries up, I think that it is tough to have a long career doing physical labor in the trades.
  • polarbeer 4y ago
    https://www.dictionary.com/e/hoard-vs-horde/ https://www.dictionary.com/e/hoard-vs-horde/
• zanethomas 4y ago
  That's a start. Next we need to ban the Chinese from buying more than the $2B worth of farmland they already own in the US.
  • thehappypm 4y ago
    $2B of farmland doesn’t sound like much for a continent.
    • zanethomas 4y ago
      maybe but it's more than enough :)
• Waterluvian 4y ago
  Short anecdote to give a quick feel for things here: I grew up in Waterloo. The home my parents bought in 1989 went up by about 2000% since then. I make more than both combined then, inflation adjusted, and can’t afford that home. I bought a home down the road in a small blue collar city for 525k. It took 24 months for it to _double_ in value. I hate this. It needs to stop. The bubble need to be popped.
• mrtri 4y ago
• diebeforei485 4y ago
  I don't expect prices to go down, but it gets rid of one of the boogeymen that the NIMBYs can point to.
• sacrosancty 4y ago
  New Zealand did that years ago. It did nothing for price increases but at least it shut up some of the populist screeching. Price increases seem to have finally stopped and you know how? The government tightened the lending rules so regular first home buyers and owner-occupiers can't get such a big loan anymore. Those people were the problem all along but nobody wanted to blame them. They were supposed to be the victims.
  • philliphaydon 4y ago
    Because there’s no reason for prices to drop yet. There’s 3 issues. Foreigners buying houses. Locals buying multiple properties. And supply. 1 of those issues is resolved. The government promised 10k houses. It’s done something like 500? There’s no houses on the cheap for people to buy to push prices down. But many people trying to buy and rent that sellers and landlords are upping prices. Atleast locals will haggle a price. The foreigners buying were paying above market prices despite never setting foot in the country.
    • sacrosancty 4y ago
      No, it really was locals buying a house. Of course there are now more locals than before, and I think our lifestyle has us less willing to share houses, and construction and relaxed zoning lagged, but it's still locals pushing up prices. If we weren't so obsessed with having our own little castle, we would buy apartments or rent instead. Everyone does still live somewhere, it's just often not as luxury as they desire so they want to pay more for more luxury. No cheap houses to push prices down? That doesn't make sense. Prices are falling now, so houses are getting cheaper.
  • phkahler 4y ago
    >> The government tightened the lending rules so regular first home buyers and owner-occupiers can't get such a big loan anymore. Agree, but don't single out first time buyers. Easy money is what causes the prices to rise regardless of who is buying. In the US lower interest rates lead to tons of ads for refinancing, and some people refi AND take out some cash to spend. Home prices vary inversely to interest rates.
• jeanlou 4y ago
  Well then,talk about free market. It looks like the world is just circling back
• stepmr 4y ago
  This won't do anything. Dr Andy Yan (https://twitter.com/Ayan604 https://twitter.com/Ayan604) has a pretty interesting take on all of this: "It still leaks. It may make a bit of a difference, but at the same time it doesn’t deal with the issue at hand, which is foreign capital, not foreign people" https://archive.ph/OcSYX https://archive.ph/OcSYX For those interested in how crazy this is in Canada, journalist Sam Cooper (https://twitter.com/scoopercooper https://twitter.com/scoopercooper) has done some awesome reporting.
• xmly 4y ago
  This hurts a lot to the homeowners willing to sell the house.
• not2b 4y ago
  The Beaverton's take on this story: "Canada to ban foreign homebuyers who refuse to set up dummy corporations" https://www.thebeaverton.com/2022/04/canada-to-ban-foreign-homebuyers-who-refuse-to-set-up-dummy-corporations/ https://www.thebeaverton.com/2022/04/canada-to-ban-foreign-h...
• adammcnamara 4y ago
  This is window dressing: 1. Many foreign buyers buy through a child studying in Canada or numbered company. 2. Canada’s immigration (~400,000/year) far outpaces housing completions (~200,000/year, of which only 50,000 are single family homes). Many of these are replacing existing housing stock, too.
• CocoCount 4y ago
  Would it ever make sense to have a tiered purchasing system? First prioritize first time homebuyers then if no first time homebuyers are bidding then open the net wider and wider. It's probably a very socialist idea and would never be given a serious though in Canada.
• barfingclouds 4y ago
  About time