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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 nei

• tqi 5y 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 5y ago
    It's low interest rates to blame
    • VincentEvans 5y 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?
      • chollida1 5y 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? This is false if you think about it. What drives the price of a house is what people can pay on their monthly payments. As rates go down prices go up as people can afford to pay more. Unfortunately for home buyers this means the downpayment goes up. What you end up with is a bunch of first time home buyers who can in theory afford the mortgage payments but can't build up the $200,000 nest egg required as a 20% downpayment on a $1,000,000 home. When rates go back up home prices will drop and so will the size of the downpayment required, even though the person will pay about the same monthly on their mortgage. Lower rate help those with existing homes and therefor existing equity more than those without homes.
        • ethor 5y ago
          It would have been true if the supply side of the market was working. Low interest rates have increased demand but the market has not been apply to increase the number of available homes to meet the demand, hence existing properties have increased in price.
    • lucidguppy 5y ago
      Its zoning and nimbyism.
      • jachee 5y ago
        It’s treating basic human needs as financial instruments.
        • ryan93 5y ago
          How does your theory explain the difference in housing prices between San Francisco and Lubbock?
          • bdcravens 5y ago
            The "theory" relates to increase over time for a single location, not differences between 2 locations at a single point in time. But to stick to your example, investors are more likely to flock to a location with greater returns. At the same time, Lubbock hasn't exactly remained stagnant. https://learn.roofstock.com/blog/lubbock-real-estate-market https://learn.roofstock.com/blog/lubbock-real-estate-market
            • ryan93 5y ago
              Why are you so sure the outsized returns don't have anything to do with zoning?
        • chii 5y ago
          Plenty of basic human needs are financialized - crops and water and electricity - and they don't have any problems. Why is financializing land and real estate a cause for the problem? I argue it's not financializing, but the lack of allowance for production of more, when the price signals a demand for more. When crop prices are high, farmers grow more, or make use of more land to grow. Ditto with electricity or water. Why isn't more land opened up for development, when price of real estate is high?
    • gunfighthacksaw 5y ago
      Nah, it’s the animal sprits
    • tqi 5y ago
      Interest rates just went over 5% so I guess we'll test this hypothesis soon?
    • honkdaddy 5y ago
      It's a lack of supply caused by costly and overzealous environmental assessments which strangle the process of land development in Canada, particularly Ontario. If you want a convenient scapegoat, blame the McGuinty government of the early 2000s. When the 2005 Greenbelt Act was passed, developers across the country warned of a housing crisis in the future due to the effect the bill would have on the price and timelines for new construction. 17 years later we'd prefer to blame China or NIMBYs, but the reality is Canadians, and especially Ontarians, did this to themselves when they allowed politicians and environmentalists to ignore the concerns of land developers and engineers.
  • Spivak 5y ago
    Weird, I know the left likes to blame the rich, but I’ve never seen specifically rich foreigners. Also for real how can the voters (ie the average citizen) be the problem? The average citizen has no money and no political or regulatory power. The average citizen just exists in a system they have no control over and responds to incentives. Hoping that en mass people won’t do that is like politely asking a river to move.
    • bin_bash 5y ago
      This is definitely a thing in Vancouver: https://www.npr.org/2019/06/05/726531803/vancouver-has-been-transformed-by-chinese-immigrants https://www.npr.org/2019/06/05/726531803/vancouver-has-been-...
      • johndfsgdgdfg 5y ago
        This is refreshing to see a left wing media writing on China. After COVID I pretty much lost trust in left wing media when it comes to China.
    • giobox 5y ago
      Attacking rich foreigners for not paying enough <insert tax or contribution> to their adopted homes is fairly common throughout the world, no? America does make it harder to avoid paying tax with a system that taxes income regardless of which country you earned it in, but most of the rest of the world does not work this way. To use the UK as an example, attacking rich foreigners for their "non-domiciled" tax status is extremely common. This is where you live in the UK, but for tax purposes hide your wealth in another system with lower tax rates, effectively paying no income taxes at all in the UK. Variations of this concept exist throughout the world in many countries and routinely draw politically ire. Just this week: https://www.bbc.com/news/uk-politics-61017993 https://www.bbc.com/news/uk-politics-61017993 Wealth coupled with a collection of passports often creates far more opportunities to avoid tax than being stuck under the rules of one single State, rightly or wrongly.
      • seanmcdirmid 5y ago
  • ameminator 5y ago
    There are many likely reasons for the explosion in housing prices - but we can't pretend that immigration isn't one of them. A solution will likely need to be multi-factored, but reducing demand by reducing immigration will probably have to be part of that solution. To ignore that is to limit how effective your measures in reducing the cost of housing can be.
    • bogota 5y ago
      Or we could have seen this coming a mile away and built more houses and reduced the idiocy of city zoning. But yeah it’s the immigrants fault. Lets reduce immigration while we are facing a labor shortage.
      • ameminator 5y ago
        Well, it's not the immigrants' fault - it's the government's fault. At the end of the day, this confluence of circumstances is its responsibility. The combination of low interest rates, no expansive public transport projects, no action on money-laundering, hurdles in supply (as you mentioned) - and yes, expansive immigration policies (Canada had the highest population growth in the G7, mostly due to immigration [0]). The truth is, this problem has been growing for many years and public servants have allowed the issue to grow beyond any control (and actually profiting off it in some cases). Now, the rest of the population will suffer and it's become a hard problem to solve. Finally, yes we have a labor shortage - but it may actually be a labor correction. Wages have been stagnant for years and inflation is running wild. Wages need to rise to catch up - artificially depressing wages with immigration is a recipe for disaster. [0] https://www.cicnews.com/2022/02/canada-fastest-growing-country-in-g7-thanks-to-immigration-0221964.html https://www.cicnews.com/2022/02/canada-fastest-growing-count...
        • deleted 5y ago
          [deleted]
        • davidw 5y ago
          Here where I live, the people who show up at hearings to stop homes from being built are all wealthy-ish local people. Not immigrants, not some faceless government, not BlackRock, but our neighbors.
  • mistermann 5y 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. Generally speaking I think you're mostly correct, but there are exceptions, and nuances. I am one of the odd outliers who believes that much of the blame lies with voters, but at the same time it is a bit of a chicken and egg problem. It's ~true that voters "should" "vote for better politicians", but consider: - what if the particular flavour of democracy that we practice does not make this possible? - what if the public's ability to make optimal decisions is a function of the quality of education they received, which is largely a consequence of government policy (and other things, like culture)? Take HN for example: observe how many comments there are in this subthread (or the overall thread) asserting that "The problem is X", as if the causality behind the situation is due to a single variable. Might this error be to some degree (perhaps even a large degree) a consequence of causality (philosophy, epistemology, logic, etc) not being first class subjects in school (and culture/society), on par with science, math, and language? And if one's answer to this question is something along the lines of "Oh, they didn't mean that literally, they were just speaking loosely, or expressing their opinion, etc", then I ask: why is it that we have ~culturally normalized (if not worse) speaking (and I would say: thinking) so inaccurately and imprecisely about so many matters that are extremely important, be it housing prices, immigration, war, politics, you name it? Might it be possible that we (~everyone) are "doing it wrong", at massive scale? If I was forced to nominate a single variable that lies behind not just this problem, but perhaps ~all problems (mostly excluding natural disasters), it would be the inability of the population of this planet to think and speak/listen/conceptualize/understand at a level that is adequate to rise above the local optima we find ourselves stuck in (note: there's substantial unaddressed complexity here: some things are improving on a relative basis, etc - I am speaking in an absolute sense, which includes that which is beyond our current knowledge, or ability to know).
    • ceeplusplus 5y ago
      We can't even get people to consistently pass basic mathematics at a college 101 level, what you're asking is impossible. There is fundamentally a culture of anti-intellectualism in many American subcultures and the left tries to paper over it by shouting about racism and the right straight up supports it.
• woah 5y ago
  > massive investments made by hedge funds, private capital, REITs which does not appear to be addressed at all? If corporations buying houses was actually affecting the purchase market prices, then we'd see an equal effect on rental prices going down. A corporation can't live in a house, so they'd be renting it out. If these evvvill corporations were keeping houses vacant just to screw over regular hard working folks, resulting in no effect on the rental market prices, then we'd see it in the vacancy stats. But that's never actually mentioned by housing conspiracy theorists because the vacancy stats show that the areas with highest prices have extremely low vacancy rates, because demand for housing is so much higher than supply, because not enough housing has been built.
  • the_optimist 5y ago
    This is a total and complete non sequitur. No reason rental prices would go down. I just looked at materials of one such company touting 50% increases.
  • nawgz 5y ago
    [flagged]
    • bogota 5y ago
      Pleased refrain from personal attacks and instead focus on debating what was actually written. I have downvoted you because this goes against the general spirit of discussion on HN.
      • nawgz 5y ago
        You're right, let me make a good faith response to right-wing late-stage-capitalism propaganda, that's worth my time.
        • the_optimist 5y ago
          Doesn’t have anything to do with wings. This is just economic nonsense.
• ericmay 5y 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? Can you not do this and also seek to identify hedge funds, private capital, REITs, and other entities which may be more difficult to regulate at a later time? Maybe this first piece of legislation is the quick win? Are you saying that foreigners who do not reside at all in Canada should be able to buy a primary home in Canada? Because that's what this bill is preventing. If you're a "foreigner" it's not relevant so long as you're actually a resident of Canada.
  • VincentEvans 5y ago
    > Can you not do this and also seek to identify hedge funds, private capital, REITs, and other entities which may be more difficult to regulate at a later time? Maybe this first piece of legislation is the quick win? You can, and I specifically pointed out that I generally agree with what is being proposed, and certainly hope that it isn’t an attempt at diversion by throwing out the usual scapegoat.
• eptcyka 5y ago
  Real estate is always a good investment (unfortunately), and capital flight from Asia is not a joke. It's happening in Europe too. Personally, I think governments in well developed countries should do their best to dissuade investment in housing as a financial instrument. Why should I compete with a millionaire, be it local or foreign, for a decent house to live in a city I've lived in for years?
  • tomatowurst 5y ago
    • ryan93 5y ago
      There is no law against Canadian Asians buying houses. The law applies to foreign Arabs too. Most people who don’t want foreign buying have never wanted foreign buying from anywhere!
    • dirtybird04 5y ago
      The comment you're referring to blamed "capital flight from Asia" and "local or foreign millionaires". How did you get to "literally blaming Asians"? That's a pretty big jump there bud. Also, capital from China must be at least an order greater than capital from all of Middle East combined. Not defending their decision not to do anything when your Arabs and Iranians were buying up real estate, just that it was a drop in the bucket and pretty easy to ignore. Chinese capital, on the other hand, is becoming cumbersome for quite a few countries now
      • chaostheory 5y ago
        As an Asian, I agree that embezzled money from China was a big problem, even in the big US metros, though I’m not sure it’s still a problem anymore even before this law passes. Why? China has been preventing capital flight for about two years or more now. I know several millionaires (USD) living in China either as citizens or expats and they all have the problem of not being able to legally get their money transferred out of China.
    • 5y ago
• davidw 5y ago
  > massive investments made by hedge funds, private capital, REITs I can't recommend this article enough on that subject: https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble https://www.vox.com/22524829/wall-street-housing-market-blac... "The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that are harder to combat. Housing undersupply is the result of decades of locals opposing new home building. It’s not something that can be blamed on Wall Street greed and the nefarious tinkering of a private equity firm. And that’s a much harder truth to stomach."
  • llbeansandrice 5y ago
    I feel like both of these things can be problems. If you view housing and ownership of your domicile as something that should be accessible to people, then housing necessarily cannot be viewed as an investment vehicle and large corporations, REITs, wallstreet, etc. need to be excluded so that more supply can be available to "correct" buyers. Limiting these groups does help on the supply-side. While it may not be the root cause, it's far better than showering the demand-side with cash like tax breaks for first-time home buyers. Perfect is the enemy of good.
    • davidw 5y ago
      I don't think many people are really in favor of big investors getting into housing because no, it sure does not help, but the root cause is "not enough homes", and the solution is "build more homes of all shapes and sizes". That's also the solution to keeping big investors out! Big investors aren't piling into used cars despite the recent scarcity because they know that sooner or later the car companies are going to go back to churning out a bunch of new cars. You're quite correct that more money chasing after the same limited number of homes is just going to drive up prices.
    • dionidium 5y ago
      Yes, but one thing causes the other and it's not in the causal direction people intuitively think. Foreign speculators and investment firms like Blackrock are only entering the SFH market because supply constraints mean ever-higher prices. It's not like nobody thought to buy up houses 40 years ago. You don't have to be a genius to think of it. I can remember being a teenager and thinking, why don't big firms buy up all the housing and rent it back? The answer is that in most markets homes aren't naturally a good investment. It's a capital-intensive business and you end up with a depreciating asset, small margins, and lots of hassle. But if supply gets constrained enough that prices complete detach from those fundamentals, then, sure, why not jump in? These investors are only in this market in the first place because of supply constraints, so it's not just that low supply is a more important factor than the investors -- the investors wouldn't even exist if not for the low supply!
• seanmcdirmid 5y ago
  > I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” There is truth, however. The Wenzhou house wife property speculator trope has some basis in reality, and Chinese markets are already rife with massive speculation that has seeped into foreign markets popular for Chinese emigration (Toronto, Vancouver, and to a much lesser extent NYC and west cost American cities). You don't have to look hard to see the effects in Vancouver, where condo buildings and housing remain empty due to being seen as speculative assets. American and some western European housing markets (e.g. UK) are a bit unique in that they haven't limited foreigners from buying and speculating on real estate. Whereas in China, many tier 1 and 2 cities have strict residency requirements before you can buy an apartment (but these also apply to Chinese via their hukou residency system).
  • tomatowurst 5y ago
    There is a huge crowd of local Canadian landlords that own or seek to own more than one property. This is the group that benefits from the narrative that Asian foreigners are buying up the local estate. The really affluent immigrant groups aren't buying multiple properties, they already have a great deal of income, and their properties are well outside most of what HN can afford and do not impact the condo market which is the most competitive, accessible and volatile. They already taxed and stopped foreign buyers but the home prices in Vancouver keep going up as sales amongst local Canadians make up most of the volume. Now they announce this virtue signaling to appease the other Canadians who can't afford homes but the problem will not change. In fact, without outside capital constantly coming in, the Vancouver real estate market is not sustainable. It literally is just another game of musical chairs, it is the news of some Chinese communist elite member buying a mansion in West Vancouver that gets local Canadians eager to own properties. I'm no stranger to the anti-asian sentiments in Vancouver, just head over to r/vancouver to see people regularly blame Asians for the fact that they can't afford to live there. In fact in the 80s, they blamed Japanese, 90s they blamed Hong Kongers, 2000s they blame Taiwan, Mainlanders. It's really disgusting to see the blatant racism against one group that is normalized but not for others. It literally is the same attitude that people with anti-semitic views constantly deride Jews of their financial success that largely came out of merit.
• johndfsgdgdfg 5y ago
  I live in Canada. In Canada foreign investment is a massive problem. This is NOT the only problem. But it is a big part of the problem. And arguably housing crisis in Canada started with foreign investment. Now domestic players and instituitional investors are also involved in housing market. Together there are enough parties involved not to let housing prices go down.
  • VincentEvans 5y ago
    The problem with “capital” vs “foreign individuals looking to buy a home” in my mind - is that capital will find a way to camouflage as domestic capital if foreign capital is no longer allowed. It will move the money, register a subsidiary etc and buy a billion worth of housing while we are celebrating that a foreign family couldn’t buy a vacation home. I am sure banning that wealthy family from China will do “something” to help alleviate the crisis, but I think putting restrictions on capital being used to buy up homes that aren’t primary-residence should be a priority and will have much larger effect. And to be clear - as it stands with the situation in real estate being what it is right now, I am in favor of massive taxes on real estate investments that are to be used to finance affordable housing to be made available exclusively to first-time buyers and primary residents.
  • ipaddr 5y ago
    Did you know only 3% of Toronto properties are foreign owned. Are you sure it's a real problem or media invented cause?
  • refurb 5y ago
    I mean it's a few percent in some cities. Is it a factor? Sure. Is the fact that housing debt is higher than it's ever been for Canadians themselves more important? Yes. I hear about people pulling out equity in the form of HELOC's to put a downpayment on another home. That's a pretty big chunk of Canadian "investors". And that should scare the shit out of anyone considering that was a major problem in 2008 in the US. People vastly over-leveraging themselves under the assumption that housing only goes up.
• tomatowurst 5y ago
  You nailed it. You don't need to be in the Canadian real estate to realize that the most people coming to open houses are in fact local Canadians (also from other provinces) looking to move to the warmest part of the country or add another property or two to their portfolio. The landlords that run the real estate holdings companies are mostly White. They buy up the properties, apartments, condos when they are cheap with the sole purpose of renting them out. Guess who influences local media and politicians. It's not some rich Chinese communist fu er dai they could care less. The fact is that Canada isn't the all shining socialist paradise that outsiders make out to be. In fact places like Vancouver almost gets a pass when race issues are mentioned because its automatically chalked up as a "social liberal progressive city" compared to other American cities that often get thrown into the "shithole conservative counties"
  • ipaddr 5y ago
    In Canada the landlords are of many colours. Many are Jewish.. would you hold that against them because they are white?
    • tomatowurst 5y ago
      Why are you mentioning Jewish community here?
      • ipaddr 5y ago
        Because if you filter for only colour you miss diversity.
  • _3u10 5y ago
    Lots of us are indigenous and Latino but often mistaken for white by people who judge race based on skin color. I wouldn’t call it a paradise but it’s definitely communist
• temp8964 5y ago
  Apparently you don't understand economics. Without the massive investments, housing will be even more expensive.
  • VincentEvans 5y ago
    Others who have replied offered their point of view. Some agreed, some disagreed. You, though, shouldn’t have even bothered. Next time hit that downvote button and move on.
    • temp8964 5y ago
      Your this reply is even worse, don’t you see it?
• cuddlybacon 5y ago
  > I feel like it’s almost an attempt to appease citizens by blaming the issue on “foreigners” As a Canadian, I agree with this. Part of the problem is that the federal govt doesn't have jurisdiction over the actually issues causing the problem. I _think_ the provinces own it but delegate it to the cities. But for some reason, this isn't an issue in those elections. BC had an election less than a year ago and housing wasn't an issue outside of Reddit. And BC has the second worse housing market in the country (Vancouver). EDIT: Actually, that BC election was a year and a half ago. I even looked that up before posting and got it wrong. The covid time warp strikes again.
• workaccount21 5y ago
  "foreigners" make up 50% of Canadas largest cities - where all the money is. The richest of the world can afford to move there but farmboy from Peterborough is SOL if he ever wants to make real money. Im fine with putting your own citizens interests before the rest of the world.
  • VincentEvans 5y ago
    Even if those “citizens” are massively capitalized corps seeking returns on their investments? Who cares if they are domestic or foreign (and if foreign becomes difficult - they’ll just open a subsidiary). I don’t really know whether you have read the rest of what I wrote or just got triggered by me seemingly defending “foreigners” and hit the Reply button. I don’t mean to single you out specifically, there other posts that seem oddly similar. Anyway, I think there’s a big distinction between immigrants (who cease to be immigrants at some point, how many years does it take in your opinion by the way? Who is more worthy of being helped to buy a home - a immigrant who came to the country 30 years ago, or a natural-born 25 year-old citizen?… but I digress.) and investment real estate that requires an intervention. Let’s say we put a huge tax on all real estate that isn’t a primary residence, I am all for making it super unprofitable to hold so that rents cannot cover the expense - to force all these REITs having to fire-sale their holdings to people who want to live in them.
    • workaccount21 5y ago
      I refuse to get into an argument that I know will turn out to be emotional so I'm just going to skip to the last point. >Let’s say we put a huge tax on all real estate that isn’t a primary residence Because cottages are a traditional part of life here and real estate is one of the only ways to make real money for someone with some capital in the middle class.
      • VincentEvans 5y ago
        I am not sure what you are afraid of since every reply seems to narrow the gap in our differences of opinion. At what point cottages cease to be “way to make real money with some capital in the middle class” and we firmly enter the territory of “make a buck while fuck everyone else”? One or two is probably the former. 80,000 properties we all probably agree is the latter.
• hluska 5y 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) 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? Sorry friend, but you're wrong. First, the issue of foreign ownership in the real estate market has already been studied. So, they have evidence supporting the moratorium. And second, this budget also announced that they are going to investigate the role of hedge funds, private capital, REITs, etc. Early actions could be announced before the end of the year.
  • amscanne 5y ago
    You need to provide evidence for this assertion. I've never seen any kind of analysis of this problem produce a clear signal that supports the idea that foreign ownership is a primary factor.
• johnwalkr 5y ago
  Action for home affordability needs to be taken, but I’m always weary of simply blaming foreigners, especially in Vancouver where there was always (since the 1800s) a lot of ethnically Chinese people. Way too many people use “foreigners” as a dog whistle term for “Chinese” and include Chinese Canadian ownership but exclude American foreign ownership (which is quite high if I remember correctly). I recall one controversial article from about 5 years ago that investigated “foreign ownership” by checking records for Chinese-sounding names since at the time citizenship wasn’t publicly available in real estate records. Clearly the wrong way to check, given that there are hundreds of thousands of ethnically Chinese Canadian people in the Vancouver area.