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Why is Canada banning foreign investment to reduce home prices? I'm either misunderstanding your claim, or it doesn't make superficial sense. If every home mu
by smt88 4y ago
Why is Canada banning foreign investment to reduce home prices?
I'm either misunderstanding your claim, or it doesn't make superficial sense.
If every home must be a primary residence, you have reduced demand because investors (who are often able to spend more than a resident/owner) can't buy there.
Talk to anyone who has tried to buy a house in a developed country in the last 5 years. They were very likely competing with cash offers from investors, often at an insane (I would say speculative) premium.
I have observed this locally while looking at condos and vacation homes, but it also makes theoretical sense and is supported by data:
https://www.sandiego.edu/business/documents/centers-and-institutes/burnham-moores-real-estate/AirBNB%2520Blog%2520Miller%2520Sklarz.pdf https://www.sandiego.edu/business/documents/centers-and-inst...
- lelag 4y agoI sympathise with the locals woes but you need it to apply to existing and old homes to have the intended effect. They want the ruling to only apply to new buildings which feels more like a get rich quick scheme for homeowners than a change that will help young people which presumably will have to compete on the old house market against investors.
- smt88 4y ago> I sympathise with the locals woes Just to be clear, I don't. I'm a homeowner whose home value would be hurt by measures like these, but I support them anyway. I think it would be hard to pull off, but the country would be better off if landlordship/non-primary homes were heavily taxed or banned altogether. In that vein, I see Airbnb as a cancer on society that is among the most evil and harmful companies that no one realizes is having the effect that it's having.