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A quick look at the data suggests only about 2% of properties in Toronto and Vancouver are owned by overseas investors. Yes, housing is priced at the margin, bu

A quick look at the data suggests only about 2% of properties in Toronto and Vancouver are owned by overseas investors. Yes, housing is priced at the margin, but this won't do anything at all to prices over the long term. I'm sure this will be wildly popular politically, because people LOVE the idea that some foreign boogieman is the reason their children can't afford homes anymore. It's much easier to outsource your problems to some outside "other" then deal with the much harder task of introspection over the poor housing policy that you and your neighbors have voted for over the last 60 years. Like all cities in areas with heavy-handed zoning regulations, abuse of historic preservation clauses, and filibuster-style city council meetings blocking new construction...the issue is one of supply. It's the same problem in literally every developed country on earth right now. The industrious, forward-looking people who originally built the cities during the major growth phase died...and then their kids grew up believing that the way things ended up was somehow divinely ordained. Never to be changed or built upon again.

peepop6 5y ago
- pembrook 5y ago
  Instead of attacking me personally and appealing to an undisclosed authority, I would love to hear a well-reasoned argument against the idea of it being a supply issue. Combine this with the backdrop of 40 years of falling interest rates. Do you really think the foreign boogieman is having a larger effect than the simple explanation of restricted supply and falling interest rates? Prices per sq. foot in Toronto recently surpassed Vancouver. There's no way Toronto has more foreign property investors than Vancouver.
willnonya 5y ago
In the end what is a home that you own if not a public commodity best used in the service of the state... The foreign boogiemen help deflect attention from this element of the argument.
sofixa 5y ago
> Like all cities in areas with heavy-handed zoning regulations, abuse of historic preservation clauses, and filibuster-style city council meetings blocking new construction...the issue is one of supply. > It's the same problem in literally every developed country on earth right now. The problem with making generalisations is that you're often wrong. The French real estate market has problems, with prices rising in some city cores ( mostly Paris), but it's not nearly as bad as many other places due to a myriad of factor and policies, like decent to good public transit ( which is undergoing massive upgrades) to nearby dense "suburbs", multiple programmes encouraging newbuilt homeownership and buy-to-let (at fixes prices) through lower taxes or cheaper loans. Paris is expensive, but you can get a much cheaper appartement or house within train distance. Of course, for newbuilt waiting lists are at ~2 years due to demand, but there's a lot of supply being built constantly, in Paris and around it - entire neighborhoods or former industrial areas are getting razed to the ground and rebuilt as decently dense (5-6 floor) appartement buildings. And that's just Paris, most other cities are better. All that while there's very strict zoning, high building standards, lots of protections for tenants and buyers, including rent controls, hard rules around eviction and absolutely crazy preservation rules. I know people who can't cut the dangerous trees in their yard because their yard is visible ( less than 1km) from the roof of a church which is a national monument, and they need approval from the Architects of France.
- pembrook 5y ago
  In the case of Paris, it could also just be that the population of metro-Paris isn't actually growing much. Toronto's population is growing at double the rate of Paris. And London, Stockholm, and Sydney's populations are growing even faster than Toronto. No surprise that faster growing populations lead to worse housing supply issues.
- wbsss4412 5y ago
  I’m not sure that you’ve made the case that they are wrong strongly enough. Does France have heavy handed zoning and historic preservation policies? Sure. But you aren’t getting 5-6 story multi family buildings constructed at a face pace in major metro areas. In many places, such construction in prohibited entirely by also how family zoning. And while France may protect historic monuments like an old church. “Historic preservation” in North America often implies restrictions on building in a single family residential area that was built in the 1920s. Your post does show, however, that restrictions don’t have to be eased all that much, but unfortunately it’s a lot easier in North America to lay the blame all on foreigner and other greedy people, than regular homeowners who show up to city council and lose it over a multi story senior center from going into their neighborhood.
justaman 5y ago
2%. But how much of that 2% has been in the last 5 years? I heard it was up to 1/3rd of all properties sold.
- pembrook 5y ago
  Canadian MLS says 600,000 properties sold each year. Over 5 years that'd be roughly 3,000,000 homes. 1/3rd of that would be 1 million homes sold to foreign investors. There's only 1 million people globally (including Canadians) with a net worth over $10 million. That means every single one of them would have bought a Canadian home in the last 5 years. I mean Canada is nice and all, but does that seem plausible?
  - chucksta 5y ago
    seems very plausible individuals or small groups are buying multiples, especially if the purpose is to store or move money.
    - pembrook 5y ago
      Even if 2% of global HNW individuals bought a home in Canada in the last 5 years (and 2% sounds high to me), they'd each have to buy 50 Canadian houses per person to reach that 1,000,000 number.
      - chucksta 5y ago
        So 10 houses a year per person of the %2? That still sounds very plausible for high net worth investors, again especially if the purpose is to move/wash/hide cash, which my understanding is, generally is one of those 3 for overseas investments. If they are washing or hiding, they don't care as much about the profit, so it makes sense they would be buying in larger numbers if they can.
        msie 5y ago
        Oh brother.
wnolens 5y ago
I'd love to see what the numbers are when you follow the capital and not just 'ownership'. There's a lot of ways around this ban. I don't think it's a boogieman. But I also don't think it will change much when these cities are primarily 2-story houses. If this stops some amount of cash offers 20+% over asking by foreign investors who have no intention of living in it - great. There's a hundred factors affecting this real estate crisis, it might need a hundred solutions.
car_analogy 5y ago
> only about 2% of properties in Toronto and Vancouver are owned by overseas investors. Yes, housing is priced at the margin, but this won't do anything at all to prices over the long term. I'm sure this will be wildly popular politically, because people LOVE the idea that some foreign boogieman is the reason their children can't afford homes anymore. Overseas investors may own only 2%, but Canada has 23% foreign-born population. That's a lot of demand. Granted this law does nothing to address that, but it plays perfectly into the foreign boogieman you dismiss. Source: https://www.statcan.gc.ca/en/dai/btd/othervisuals/other006 https://www.statcan.gc.ca/en/dai/btd/othervisuals/other006
- eldaisfish 5y ago
  this is textbook xenophobia and you should be ashamed. Implying that the foreign born population in Canada are somehow less canadian or more foreign is not what anyone should be saying.
  - car_analogy 5y ago
    Yes yes xenophobia - but is it true? Did Canada's past immigration policy contribute to current home prices? And more importantly - will the current immigration policy contribute to future high prices? If the goal is affordable housing, why is immigration the one policy that must not be adjusted to meet that goal?
    - FredPret 5y ago
      Whether those new Canadians arrived by birth or immigration, they are here now. We should build enough houses for them. If Canada cut it’s immigration targets, it would have to somehow produce a lot more babies to pay for everything. More houses needed either way.
      - car_analogy 5y ago
        Population cannot grow without limit, no matter what "everything" Canadians have to pay for. Sooner or later, we will have to learn to live with a stable population. Many industrialized countries have already done so - Japan, China, South Korea, eastern Europe.. By any sane environmental standard, there is already too many of us*, so sooner would be better. *Yes, if we changed our lifestyles to reduce consumption, we could fit more people in - but until we do so, we should stop adding to the population.
mzs 5y ago
It's not about what percentage is foreign owned, but by how much said foreign investment has raised median prices.
- nickff 5y ago
  The parent you're responding to is saying that Vancouver has a massive supply issue caused by zoning, and these measures are targeting a relatively small source of demand.
  - mzs 5y ago
    I know, but this 1) is a moratorium across all of Canada and 2) places with better ROI like those with more limited supply are more attractive to foreign investors and will cause the median price to increase to an even greater degree.
acchow 5y ago
Toronto has a different issue - the purchase price for a home has been rising far faster than rental rates. This is a bubble.
- liketochill 5y ago
  It depends on what value you assign to owning instead of renting. No landlord to deal with and being certain you don’t have to move for as long as you want are benefits to owning that are worth a premium over renting.
  - acchow 5y ago
    > No landlord to deal with and being certain you don’t have to move for as long as you want are benefits to owning that are worth a premium over renting. The premiums you listed have always existed, there's no reason for them to grow now. What's grown now is that, because home prices are rising, people look at the rising prices and want to take advantage of it. And the primary residence in Canada has infinite tax-free gains - so as long as prices rise, it seems like it makes total sense to pour as much as possible into housing. This is a bubble. Canadians think of housing as the best possible investment because housing prices are going up and its a tax-advantaged vehicle. Once prices start falling, we'll see this leveraged investment unravel quickly
chrishemsworth 5y ago
Better Dwelling paints a bleaker picture when you isolate certain relevant categories of homes For example, in BC (as of 2020), 9% of new condos (built after 2016) were owned by foreign interests, which is down from 2019, but probably holds steady for a number of years. https://betterdwelling.com/foreign-buyers-own-1-in-10-recently-built-condos-in-canada-1-in-20-homes-in-total/ https://betterdwelling.com/foreign-buyers-own-1-in-10-recent...
- digianarchist 5y ago
  Pales in comparison to amateur domestic investors (25% in Ontario 2021) [0], "mom and pop" landlords that the federal government have chosen to protect. [0] - https://betterdwelling.com/over-a-quarter-of-toronto-real-estate-is-bought-by-investors-with-multiple-properties/ https://betterdwelling.com/over-a-quarter-of-toronto-real-es...

peepop6 5y ago

pembrook 5y ago
Instead of attacking me personally and appealing to an undisclosed authority, I would love to hear a well-reasoned argument against the idea of it being a supply issue. Combine this with the backdrop of 40 years of falling interest rates. Do you really think the foreign boogieman is having a larger effect than the simple explanation of restricted supply and falling interest rates? Prices per sq. foot in Toronto recently surpassed Vancouver. There's no way Toronto has more foreign property investors than Vancouver.

willnonya 5y ago

In the end what is a home that you own if not a public commodity best used in the service of the state... The foreign boogiemen help deflect attention from this element of the argument.

sofixa 5y ago

> Like all cities in areas with heavy-handed zoning regulations, abuse of historic preservation clauses, and filibuster-style city council meetings blocking new construction...the issue is one of supply. > It's the same problem in literally every developed country on earth right now. The problem with making generalisations is that you're often wrong. The French real estate market has problems, with prices rising in some city cores ( mostly Paris), but it's not nearly as bad as many other places due to a myriad of factor and policies, like decent to good public transit ( which is undergoing massive upgrades) to nearby dense "suburbs", multiple programmes encouraging newbuilt homeownership and buy-to-let (at fixes prices) through lower taxes or cheaper loans. Paris is expensive, but you can get a much cheaper appartement or house within train distance. Of course, for newbuilt waiting lists are at ~2 years due to demand, but there's a lot of supply being built constantly, in Paris and around it - entire neighborhoods or former industrial areas are getting razed to the ground and rebuilt as decently dense (5-6 floor) appartement buildings. And that's just Paris, most other cities are better. All that while there's very strict zoning, high building standards, lots of protections for tenants and buyers, including rent controls, hard rules around eviction and absolutely crazy preservation rules. I know people who can't cut the dangerous trees in their yard because their yard is visible ( less than 1km) from the roof of a church which is a national monument, and they need approval from the Architects of France.

pembrook 5y ago
In the case of Paris, it could also just be that the population of metro-Paris isn't actually growing much. Toronto's population is growing at double the rate of Paris. And London, Stockholm, and Sydney's populations are growing even faster than Toronto. No surprise that faster growing populations lead to worse housing supply issues.
wbsss4412 5y ago
I’m not sure that you’ve made the case that they are wrong strongly enough. Does France have heavy handed zoning and historic preservation policies? Sure. But you aren’t getting 5-6 story multi family buildings constructed at a face pace in major metro areas. In many places, such construction in prohibited entirely by also how family zoning. And while France may protect historic monuments like an old church. “Historic preservation” in North America often implies restrictions on building in a single family residential area that was built in the 1920s. Your post does show, however, that restrictions don’t have to be eased all that much, but unfortunately it’s a lot easier in North America to lay the blame all on foreigner and other greedy people, than regular homeowners who show up to city council and lose it over a multi story senior center from going into their neighborhood.

justaman 5y ago

2%. But how much of that 2% has been in the last 5 years? I heard it was up to 1/3rd of all properties sold.

pembrook 5y ago
Canadian MLS says 600,000 properties sold each year. Over 5 years that'd be roughly 3,000,000 homes. 1/3rd of that would be 1 million homes sold to foreign investors. There's only 1 million people globally (including Canadians) with a net worth over $10 million. That means every single one of them would have bought a Canadian home in the last 5 years. I mean Canada is nice and all, but does that seem plausible?
- chucksta 5y ago
  seems very plausible individuals or small groups are buying multiples, especially if the purpose is to store or move money.
  - pembrook 5y ago
    Even if 2% of global HNW individuals bought a home in Canada in the last 5 years (and 2% sounds high to me), they'd each have to buy 50 Canadian houses per person to reach that 1,000,000 number.
    - chucksta 5y ago
      So 10 houses a year per person of the %2? That still sounds very plausible for high net worth investors, again especially if the purpose is to move/wash/hide cash, which my understanding is, generally is one of those 3 for overseas investments. If they are washing or hiding, they don't care as much about the profit, so it makes sense they would be buying in larger numbers if they can.
      - msie 5y ago
        Oh brother.

wnolens 5y ago

I'd love to see what the numbers are when you follow the capital and not just 'ownership'. There's a lot of ways around this ban. I don't think it's a boogieman. But I also don't think it will change much when these cities are primarily 2-story houses. If this stops some amount of cash offers 20+% over asking by foreign investors who have no intention of living in it - great. There's a hundred factors affecting this real estate crisis, it might need a hundred solutions.

car_analogy 5y ago

> only about 2% of properties in Toronto and Vancouver are owned by overseas investors. Yes, housing is priced at the margin, but this won't do anything at all to prices over the long term. I'm sure this will be wildly popular politically, because people LOVE the idea that some foreign boogieman is the reason their children can't afford homes anymore. Overseas investors may own only 2%, but Canada has 23% foreign-born population. That's a lot of demand. Granted this law does nothing to address that, but it plays perfectly into the foreign boogieman you dismiss. Source: https://www.statcan.gc.ca/en/dai/btd/othervisuals/other006 https://www.statcan.gc.ca/en/dai/btd/othervisuals/other006

eldaisfish 5y ago
this is textbook xenophobia and you should be ashamed. Implying that the foreign born population in Canada are somehow less canadian or more foreign is not what anyone should be saying.
- car_analogy 5y ago
  Yes yes xenophobia - but is it true? Did Canada's past immigration policy contribute to current home prices? And more importantly - will the current immigration policy contribute to future high prices? If the goal is affordable housing, why is immigration the one policy that must not be adjusted to meet that goal?
  - FredPret 5y ago
    Whether those new Canadians arrived by birth or immigration, they are here now. We should build enough houses for them. If Canada cut it’s immigration targets, it would have to somehow produce a lot more babies to pay for everything. More houses needed either way.
    - car_analogy 5y ago
      Population cannot grow without limit, no matter what "everything" Canadians have to pay for. Sooner or later, we will have to learn to live with a stable population. Many industrialized countries have already done so - Japan, China, South Korea, eastern Europe.. By any sane environmental standard, there is already too many of us*, so sooner would be better. *Yes, if we changed our lifestyles to reduce consumption, we could fit more people in - but until we do so, we should stop adding to the population.

mzs 5y ago

It's not about what percentage is foreign owned, but by how much said foreign investment has raised median prices.

nickff 5y ago
The parent you're responding to is saying that Vancouver has a massive supply issue caused by zoning, and these measures are targeting a relatively small source of demand.
- mzs 5y ago
  I know, but this 1) is a moratorium across all of Canada and 2) places with better ROI like those with more limited supply are more attractive to foreign investors and will cause the median price to increase to an even greater degree.

acchow 5y ago

Toronto has a different issue - the purchase price for a home has been rising far faster than rental rates. This is a bubble.

liketochill 5y ago
It depends on what value you assign to owning instead of renting. No landlord to deal with and being certain you don’t have to move for as long as you want are benefits to owning that are worth a premium over renting.
- acchow 5y ago
  > No landlord to deal with and being certain you don’t have to move for as long as you want are benefits to owning that are worth a premium over renting. The premiums you listed have always existed, there's no reason for them to grow now. What's grown now is that, because home prices are rising, people look at the rising prices and want to take advantage of it. And the primary residence in Canada has infinite tax-free gains - so as long as prices rise, it seems like it makes total sense to pour as much as possible into housing. This is a bubble. Canadians think of housing as the best possible investment because housing prices are going up and its a tax-advantaged vehicle. Once prices start falling, we'll see this leveraged investment unravel quickly

chrishemsworth 5y ago

Better Dwelling paints a bleaker picture when you isolate certain relevant categories of homes For example, in BC (as of 2020), 9% of new condos (built after 2016) were owned by foreign interests, which is down from 2019, but probably holds steady for a number of years. https://betterdwelling.com/foreign-buyers-own-1-in-10-recently-built-condos-in-canada-1-in-20-homes-in-total/ https://betterdwelling.com/foreign-buyers-own-1-in-10-recent...

digianarchist 5y ago
Pales in comparison to amateur domestic investors (25% in Ontario 2021) [0], "mom and pop" landlords that the federal government have chosen to protect. [0] - https://betterdwelling.com/over-a-quarter-of-toronto-real-estate-is-bought-by-investors-with-multiple-properties/ https://betterdwelling.com/over-a-quarter-of-toronto-real-es...