4 ms·

Seems like the era of these sort of visa schemes is ending and hand in hand the notion of luring foreign wealth being a good idea. Not just Portugal but Irelan

Seems like the era of these sort of visa schemes is ending and hand in hand the notion of luring foreign wealth being a good idea. Not just Portugal but Ireland, and of course Canada ended its wealthy visa class (Quebec pausing theirs) and BC brought in its foreign buyer and empty homes taxes. For a while there it was clear that policy makers seemed to think that foreigners buying real estate was somehow a quick and easy way to turn around the economy. Somehow thinking foreign wealth merely being around would induce more wealth to appear as if by magic. 1. bring in a bunch of wealthy people to buy real estate 2. ??? 3. Tide lifts all boats and economy does great! Unfortunately what actually seems to happen is that you end up with a bunch of mostly empty pied-a-terres, the rich foreigners leverage the opportunity purely for a passport and don't invest or start new businesses, and the home building industry pivots increasingly toward building turn key pied-a-terres that are useless and expensive for locals. It all results in a situation that's worse for the economy, a spiking cost of housing and living. What policy makers should really be striving for here is an extremely low cost of renting which keeps money in peoples pockets that they spend and invest in creating their own local busineses.

rcarr 4y ago
The world needs more comments like this. Nail meets head.
KptMarchewa 4y ago
100% agree. The fact that giant majority of the last X years of economic progress have ended solely in the pockets of the landowners and landlords is a tragedy of our times.
cactusplant7374 4y ago
Why not keep the visa but let them build homes in economically depressed areas? The golden visa did have recent restrictions that are similar to what I am advocating for but they didn’t go far enough.
- Tiktaalik 4y ago
  I think they actually did this a little while ago, changing the rules such that Golden Visa only applied to home buying in inland rural areas. No longer applying to the main coastal cities. Hopefully a Portuguese person who knows more can chime in here because I'm not really that familiar with the issue beyond the high level.
  - cactusplant7374 4y ago
    Yes, that’s what was I was referencing.
girvo 4y ago
Now I’m praying Australian states will do similar, but the political push-back on limits for AirBnB’s has been huge sadly, while rents skyrocket and house prices are beyond ridiculous.
- toomuchtodo 4y ago
  Would you be willing to expound on this? A friend lives in Sydney and they say the rents and house prices are very high. Is this a matter of excessive speculation, a lack of supply and no will to build, or a combination of factors?
  - ObviousHumanGPT 4y ago
    Supply alone. Due to it's climate, national parks and beaches, Sydney is one of the most desirable cities on the planet. As a result this has lead to sustained and very high (3% year on year) internal (rural/regional to city) and external migration. In response to this migration, local governments close to the city center have done everything in their power for the last half century to oppose high density construction in any form, and to ensure that construction that does occur is not paired with adequate parks, walking/cycling routes, schools, transit, or external parking garages. Eastern suburb train stations in the 70's were protested and cancelled mid construction, and several new rail lines in the 80's and 90's have been cancelled due to thinly veiled race politics. This has resulted in suburban sprawl and some of the worlds worst road congestion and gridlock that extends all the way to Sydney's periphery, and for 12+ hours per day during weekdays.
  - BFLpL0QNek 4y ago
    Australians treat property as pension funds. Pretty much every middle class person will have an investment property or holiday house. Airbnbs are popular, less requirements (no tenant rights)/more flexibility from a land lords point of view while also significantly more rent. This removes stock from local workers in favour of tourists. There’s some tax rules than incentivises investing in property, negative gearing, capital gains. With Australians holding there wealth in property the government and their core voters don’t want to see property prices reduce, Australia also has high immigration but not building despite population growth. Australia is otherwise known as the “Lucky country”, its holding to its reputation. https://en.m.wikipedia.org/wiki/The_Lucky_Country https://en.m.wikipedia.org/wiki/The_Lucky_Country
908B64B197 4y ago
> For a while there it was clear that policy makers seemed to think that foreigners buying real estate was somehow a quick and easy way to turn around the economy. Somehow thinking foreign wealth merely being around would induce more wealth to appear as if by magic. No. These schemes were mostly pandering to certain communities for votes.
moralestapia 4y ago
>Seems like the era of these sort of visa schemes is ending [...] Oh boy, you have no idea. That niche is about to explode in possibilities.
pm90 4y ago
What percentage of housing is built this way? Is the effects of foreign buyers enough to distort the market?
- voisin 4y ago
  > Is the effects of foreign buyers enough to distort the market? Yes. Look at Vancouver, Canada for a prime example.
- Tiktaalik 4y ago
  Not a lot of real clear data on this so it's always up for debate. I can't speak for the situation in Portugal as I don't live there. Maybe they have heaps of data, but when British Columbia was wrestling with a feeling that foreign buying was impacting the market, they literally were not collecting any data and so had nothing beyond vibes and anecdotes to go on. The impact of foreign buyers was seemingly enough though for a major developer in Vancouver, Westbank, to start opening up sales offices in major Asian cities and was explicitly citing its condos as being ideal as pied-à-terres in their marketing materials. With that in mind, if entire major developers are shifting their entire business model, I have to imagine that the foreign buyer market was real and substantial.
Gimpei 4y ago
My impression was always that the main attraction of wealthy foreigners was the increased tax take. The higher rents could be solved by encouraging more housing construction, but why do that when you can just blame foreigners?
- ergocoder 4y ago
  I'm always amazed that people bringing in tons of money into your city is a problem, and the root cause is the people bringing in money... What the fuck is going on?
  - bobthepanda 4y ago
    If the money doesn’t spread around, it’s a net negative for existing residents.
    - ergocoder 4y ago
      And it isn't spread around because the local government is incompetent. There are tons of other better solutions to manage the "too much income" problem. The cities are fucked regardless with that level of incompetency. Imagine your startup's problem is having too much money, and your CEO decides to fire the paying customers because it is too much money.
      - rr808 4y ago
        That's the problem though the people with golden visas usually aren't paying customers they're just rentiers who aren't contributing anything. The visas should be given to people who start companies and hire people and pay taxes, buying some real estate for a few years helps no one.
        ergocoder 4y ago
        What do you mean? They pay rent. They pay for food. They shop locally. They are basically tourist. They are the easiest money to earn.
from 4y ago
There are ways to design the program to minimize the kind of problem you describe. Vanuatu give passports in return for a donation to some government owned fund.
PaywallBuster 4y ago
Portugal ends Golden Visas (GV) "attracted 6.8B euros in investment since its launch in 2012" 6.8B / 11Y = 618M/y Min inv = 280k 618M / 280k = 2207 GV houses sold/y Avg amt sold/y = 150k https://foreignbuyerswatch.com/2021/05/11/total-home-sales-in-portugal-2009-2020/ https://foreignbuyerswatch.com/2021/05/11/total-home-sales-i... Golden visa share = 2k/150k = only 1% https://twitter.com/levelsio/status/1626534923619434497 https://twitter.com/levelsio/status/1626534923619434497
deleted 4y ago
[deleted]

rcarr 4y ago

The world needs more comments like this. Nail meets head.

KptMarchewa 4y ago

100% agree. The fact that giant majority of the last X years of economic progress have ended solely in the pockets of the landowners and landlords is a tragedy of our times.

cactusplant7374 4y ago

Why not keep the visa but let them build homes in economically depressed areas? The golden visa did have recent restrictions that are similar to what I am advocating for but they didn’t go far enough.

Tiktaalik 4y ago
I think they actually did this a little while ago, changing the rules such that Golden Visa only applied to home buying in inland rural areas. No longer applying to the main coastal cities. Hopefully a Portuguese person who knows more can chime in here because I'm not really that familiar with the issue beyond the high level.
- cactusplant7374 4y ago
  Yes, that’s what was I was referencing.

girvo 4y ago

Now I’m praying Australian states will do similar, but the political push-back on limits for AirBnB’s has been huge sadly, while rents skyrocket and house prices are beyond ridiculous.

toomuchtodo 4y ago
Would you be willing to expound on this? A friend lives in Sydney and they say the rents and house prices are very high. Is this a matter of excessive speculation, a lack of supply and no will to build, or a combination of factors?
- ObviousHumanGPT 4y ago
  Supply alone. Due to it's climate, national parks and beaches, Sydney is one of the most desirable cities on the planet. As a result this has lead to sustained and very high (3% year on year) internal (rural/regional to city) and external migration. In response to this migration, local governments close to the city center have done everything in their power for the last half century to oppose high density construction in any form, and to ensure that construction that does occur is not paired with adequate parks, walking/cycling routes, schools, transit, or external parking garages. Eastern suburb train stations in the 70's were protested and cancelled mid construction, and several new rail lines in the 80's and 90's have been cancelled due to thinly veiled race politics. This has resulted in suburban sprawl and some of the worlds worst road congestion and gridlock that extends all the way to Sydney's periphery, and for 12+ hours per day during weekdays.
- BFLpL0QNek 4y ago
  Australians treat property as pension funds. Pretty much every middle class person will have an investment property or holiday house. Airbnbs are popular, less requirements (no tenant rights)/more flexibility from a land lords point of view while also significantly more rent. This removes stock from local workers in favour of tourists. There’s some tax rules than incentivises investing in property, negative gearing, capital gains. With Australians holding there wealth in property the government and their core voters don’t want to see property prices reduce, Australia also has high immigration but not building despite population growth. Australia is otherwise known as the “Lucky country”, its holding to its reputation. https://en.m.wikipedia.org/wiki/The_Lucky_Country https://en.m.wikipedia.org/wiki/The_Lucky_Country

908B64B197 4y ago

> For a while there it was clear that policy makers seemed to think that foreigners buying real estate was somehow a quick and easy way to turn around the economy. Somehow thinking foreign wealth merely being around would induce more wealth to appear as if by magic. No. These schemes were mostly pandering to certain communities for votes.

moralestapia 4y ago

>Seems like the era of these sort of visa schemes is ending [...] Oh boy, you have no idea. That niche is about to explode in possibilities.

pm90 4y ago

What percentage of housing is built this way? Is the effects of foreign buyers enough to distort the market?

voisin 4y ago
> Is the effects of foreign buyers enough to distort the market? Yes. Look at Vancouver, Canada for a prime example.
Tiktaalik 4y ago
Not a lot of real clear data on this so it's always up for debate. I can't speak for the situation in Portugal as I don't live there. Maybe they have heaps of data, but when British Columbia was wrestling with a feeling that foreign buying was impacting the market, they literally were not collecting any data and so had nothing beyond vibes and anecdotes to go on. The impact of foreign buyers was seemingly enough though for a major developer in Vancouver, Westbank, to start opening up sales offices in major Asian cities and was explicitly citing its condos as being ideal as pied-à-terres in their marketing materials. With that in mind, if entire major developers are shifting their entire business model, I have to imagine that the foreign buyer market was real and substantial.

Gimpei 4y ago

My impression was always that the main attraction of wealthy foreigners was the increased tax take. The higher rents could be solved by encouraging more housing construction, but why do that when you can just blame foreigners?

ergocoder 4y ago
I'm always amazed that people bringing in tons of money into your city is a problem, and the root cause is the people bringing in money... What the fuck is going on?
- bobthepanda 4y ago
  If the money doesn’t spread around, it’s a net negative for existing residents.
  - ergocoder 4y ago
    And it isn't spread around because the local government is incompetent. There are tons of other better solutions to manage the "too much income" problem. The cities are fucked regardless with that level of incompetency. Imagine your startup's problem is having too much money, and your CEO decides to fire the paying customers because it is too much money.
    - rr808 4y ago
      That's the problem though the people with golden visas usually aren't paying customers they're just rentiers who aren't contributing anything. The visas should be given to people who start companies and hire people and pay taxes, buying some real estate for a few years helps no one.
      - ergocoder 4y ago
        What do you mean? They pay rent. They pay for food. They shop locally. They are basically tourist. They are the easiest money to earn.

from 4y ago

There are ways to design the program to minimize the kind of problem you describe. Vanuatu give passports in return for a donation to some government owned fund.

PaywallBuster 4y ago

Portugal ends Golden Visas (GV) "attracted 6.8B euros in investment since its launch in 2012" 6.8B / 11Y = 618M/y Min inv = 280k 618M / 280k = 2207 GV houses sold/y Avg amt sold/y = 150k https://foreignbuyerswatch.com/2021/05/11/total-home-sales-in-portugal-2009-2020/ https://foreignbuyerswatch.com/2021/05/11/total-home-sales-i... Golden visa share = 2k/150k = only 1% https://twitter.com/levelsio/status/1626534923619434497 https://twitter.com/levelsio/status/1626534923619434497

deleted 4y ago

[deleted]