Topic: Housing

[OliverD]

So it's racist to be concerned about the affect that absentee foreign ownership has on a real estate market?   

No.  But their impact upon said market seems to be minimal in comparison to the true scope of the problem.

Like any complex issue there's a lot of factors at play. I think that a reasonable tax on foreign ownership isn't a bad thing even if its impact isn't that significant, as long as it is coupled with other measures.

If speculators (both domestic and foreign) is a significant part of the problem then we should also be looking at ways to disincentivize leaving units empty. Right now it sounds like investors are leaving condos empty because renting them out is too much of a hassle and they'll still make a bunch of money on the appreciation. So perhaps a tax on empty units makes sense.

[Rupert]

   If foreign ownership were banned and empty houses confiscated...the problem would be solved in the rush to sell. QED. in my opinion. Nibbling around the edges will do very little.

[PJungnitsch]

Seems like a bit of a Ponzi scheme. As long as prices keep going up, the market funds itself. We're seeing that in farmland in AB. Prices are skyrocketing, partly because of 'foreign' investors like the Ontario Teachers Pension fund who see an impressive rate of return, and partly because for many older farmers who own land, their purchasing power is inflated by the huge increase in the paper value of the land bought when things were cheap.

But there is no relation to the payment producing capacity of that land, so it seems like things could go to hell in a hurry in a bad year or if the market suddenly loses confidence in itself, and that has happened before:



https://www.grainews.ca/2017/02/03/90-years-of-saskatchewan-farmland-prices-2/

In the meantime there are some wealthy retirees coming out of this

[SKYMTL]

   If foreign ownership were banned and empty houses confiscated...the problem would be solved in the rush to sell. QED. in my opinion. Nibbling around the edges will do very little.

You are highlighting exactly why its too late for extreme measures.  Ontario and BC are already way too far down the proverbial rabbit hole to implement any outright bans or confiscation plans.  Either measure would trigger the one thing they're trying to avoid:  a market crash. 

One of the problems I see is the market itself with local real estate investors being the major hiccup in the long term.  There's a reason why new condo towers and housing developments (be they high end or on the more "affordable"end of the spectrum) sell out so quickly is due to insider selling to realtors / speculators before sales offices are even open to the public.  This artificially inflates sales numbers and then we see those same units being dumped onto the market later down the line at inflated prices.  This cyclical process over more than a decade running unchecked not only creates an environment of false supply / demand metrics but it also causes major affordability concerns.   

[mmret]

Money is too inexpensive to borrow. Too many people think in terms of monthly payment and not debt load.

Add in:
 - Banks handing out huge mortgages while taking little risk (as residential mortgages are back stopped by the cmhc)
- Sub prime lenders helping buyers make their down payment on houses over a million
- A self regulated RE industry
- Media regurgitating RE industry press releases and 'data' as fact.

Heaven help us... ;-)

Here's a fact for you: foreigners look, act, and talk funny.

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So what about people who look funny and who have parents who talk funny who think that foreigners are part of the problem?

What I'm getting at is are you thinking it's entirely (or let's even say largely) white people who think it's foreign buyers fault? Or facials scapegoating?

I'm wondering how this will all end. Will people just be unable to afford housing? Ultimately everyone needs a place to live so personally I'm not against most of the OLP's actions. Just everyone has been so slow to act. Interest rates are too low I agree.

Never made that claim .

Not getting into this. I'm being somewhat facetious. But only somewhat. It is complex and obviously race plays a material factor in multiple ways, but it is not the entirety of it. Still, way too much to get into. I could go 5 levels deep on this stuff.

I will only say that I am surprised (happily) that people on the forum are able to see that this is a complex issue with both "domestic" and "foreign" dimensions, rather than only seeing it in highly simplistic (one might say Trumpish) terms.

Rupert on the other hand is pushing the confiscation angle to go along with his oenchant for ex post facto law. Of course, confiscation is a sort of form of ex post facto law. He is not exactly what you would call a "man of principles". Yes that was a total aside. And it was a cheap shot at Rupert. But I would reckon it hit the mark.

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[BWII]

Hey, no one's moving to PEI...or here...or probably Saskatchmewan...lots of affordable housing out this way.  Compaitively anyway.  Land on the other hand...fack me.  FIL sold his 10 or so years ago, 400 acres, just over $1000/acre.  Today, you'd be lucky to get it for $3-4,000/acre.  My son's boss farms just over 2,000 acres. When he retires, if rent stays as it is, he should pull in $150-200g/yr just from the rent. Forget the number, just recall it was somewhere in there.  My real estate friend has sold some dirt as high as $6g/acre.  And if it's potato land...watch out.  Even the shittty rock land out east (MB that is) is creeping up over $1000/acre.  No use as farm land, should be $250.  Then again, they're not making more dirt.

[pi314]

Money is too inexpensive to borrow. Too many people think in terms of monthly payment and not debt load.

Add in:
 - Banks handing out huge mortgages while taking little risk (as residential mortgages are back stopped by the cmhc)
- Sub prime lenders helping buyers make their down payment on houses over a million
- A self regulated RE industry
- Media regurgitating RE industry press releases and 'data' as fact.

Heaven help us... ;-)

Here's a fact for you: foreigners look, act, and talk funny.

Sent from my SM-G930W8 using Tapatalk

So what about people who look funny and who have parents who talk funny who think that foreigners are part of the problem?

What I'm getting at is are you thinking it's entirely (or let's even say largely) white people who think it's foreign buyers fault? Or facials scapegoating?

I'm wondering how this will all end. Will people just be unable to afford housing? Ultimately everyone needs a place to live so personally I'm not against most of the OLP's actions. Just everyone has been so slow to act. Interest rates are too low I agree.

Never made that claim .

Not getting into this. I'm being somewhat facetious. But only somewhat. It is complex and obviously race plays a material factor in multiple ways, but it is not the entirety of it. Still, way too much to get into. I could go 5 levels deep on this stuff.

I will only say that I am surprised (happily) that people on the forum are able to see that this is a complex issue with both "domestic" and "foreign" dimensions, rather than only seeing it in highly simplistic (one might say Trumpish) terms.

Rupert on the other hand is pushing the confiscation angle to go along with his oenchant for ex post facto law. Of course, confiscation is a sort of form of ex post facto law. He is not exactly what you would call a "man of principles". Yes that was a total aside. And it was a cheap shot at Rupert. But I would reckon it hit the mark.

Sent from my SM-G930W8 using Tapatalk

Gotcha. Now that I can understand and agree with what you're saying. I asked mainly because I've seen people (on the internet) strongly oppose the foreign buyer tax on the grounds that it's simply racist. Which I don't buy. I'd go as far as saying  since people need a place to live, any more than one residence owned and there should be more taxes. And housing isn't like cars or TVs or private jets or whatever that we can just make enough to satisfy demand; there's geography to consider. At the same time it's not necessary that everyone own their place, just that they have a reasonably affordable place to live.

I'd like to see you dig the five layers deep mainly to get johngenx and SirO started 

[mmret]

Money is too inexpensive to borrow. Too many people think in terms of monthly payment and not debt load.

Add in:
 - Banks handing out huge mortgages while taking little risk (as residential mortgages are back stopped by the cmhc)
- Sub prime lenders helping buyers make their down payment on houses over a million
- A self regulated RE industry
- Media regurgitating RE industry press releases and 'data' as fact.

Heaven help us... ;-)

Here's a fact for you: foreigners look, act, and talk funny.

Sent from my SM-G930W8 using Tapatalk

So what about people who look funny and who have parents who talk funny who think that foreigners are part of the problem?

What I'm getting at is are you thinking it's entirely (or let's even say largely) white people who think it's foreign buyers fault? Or facials scapegoating?

I'm wondering how this will all end. Will people just be unable to afford housing? Ultimately everyone needs a place to live so personally I'm not against most of the OLP's actions. Just everyone has been so slow to act. Interest rates are too low I agree.

Never made that claim .

Not getting into this. I'm being somewhat facetious. But only somewhat. It is complex and obviously race plays a material factor in multiple ways, but it is not the entirety of it. Still, way too much to get into. I could go 5 levels deep on this stuff.

I will only say that I am surprised (happily) that people on the forum are able to see that this is a complex issue with both "domestic" and "foreign" dimensions, rather than only seeing it in highly simplistic (one might say Trumpish) terms.

Rupert on the other hand is pushing the confiscation angle to go along with his oenchant for ex post facto law. Of course, confiscation is a sort of form of ex post facto law. He is not exactly what you would call a "man of principles". Yes that was a total aside. And it was a cheap shot at Rupert. But I would reckon it hit the mark.

Sent from my SM-G930W8 using Tapatalk

Gotcha. Now that I can understand and agree with what you're saying. I asked mainly because I've seen people (on the internet) strongly oppose the foreign buyer tax on the grounds that it's simply racist. Which I don't buy. I'd go as far as saying  since people need a place to live, any more than one residence owned and there should be more taxes. And housing isn't like cars or TVs or private jets or whatever that we can just make enough to satisfy demand; there's geography to consider. At the same time it's not necessary that everyone own their place, just that they have a reasonably affordable place to live.

I'd like to see you dig the five layers deep mainly to get johngenx and SirO started 

I've had my fill of arguments over the years.....getting too old for this .

With respect to the first line of your post, I'd say that its one of those funny Venn diagrams where people on both sides of the argument like to make a false equivalence and assume that only two of the four possible regions exist, and then they debate about which ONE of the two is "true".

[Rupert]

The solution is to eliminate the cause surely. The problem here is that we get into the aspect of "cause elimination and effect".
The location of neutral on a gearbox. It goes nowhere.

[EV-Light]

Supply is the issue...this started a long time ago, back in 2002 when the liberals decided to force construction of high rises vs houses! Ideology took us down this path because they wanted to force people into tiny condos, except it blew up right in their face!

...and now rent control! Soon enough a 1 bedroom apartment will cost as much as it does in NYC because rent control - it didn't work in NYC, it won't work in Toronto.


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[OliverD]

Supply is the issue...this started a long time ago, back in 2002 when the liberals decided to force construction of high rises vs houses! Ideology took us down this path because they wanted to force people into tiny condos, except it blew up right in their face!

How did they force construction of high rises?

[EV-Light]

Supply is the issue...this started a long time ago, back in 2002 when the liberals decided to force construction of high rises vs houses! Ideology took us down this path because they wanted to force people into tiny condos, except it blew up right in their face!

How did they force construction of high rises?

By controlling access to land to build townhouses, single family homes


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[OliverD]

Supply is the issue...this started a long time ago, back in 2002 when the liberals decided to force construction of high rises vs houses! Ideology took us down this path because they wanted to force people into tiny condos, except it blew up right in their face!

How did they force construction of high rises?

By controlling access to land to build townhouses, single family homes

Probably because the spawl created by single family homes was unsustainable (and likely still is).

[Rupert]

   Ok here's another angle...let's move Bay Street to Fredericton and the Federal Government to Regina and build up cities there. It can be done a bit at a time to spread the population out. We have a large country...let's use it.

   This kind of action is not un-heard of. It seems to me that Government tax offices (I think) were moved to PEI; providing employment there.

[Sir Osis of Liver]

Supply is the issue...this started a long time ago, back in 2002 when the liberals decided to force construction of high rises vs houses! Ideology took us down this path because they wanted to force people into tiny condos, except it blew up right in their face!

How did they force construction of high rises?

By controlling access to land to build townhouses, single family homes

Probably because the spawl created by single family homes was unsustainable (and likely still is).

Exactly.

The GTA went off the rails when they threw aside their long term planning and allowed "the market" to dictate what was built, and where. The result was sprawl and a geometric increase in the cost of providing services.

[johngenx]

How the hell would encouraging higher density - and hence the supply of housing, create a supply problem and raise prices?

[evil_twin]

How the hell would encouraging higher density - and hence the supply of housing, create a supply problem and raise prices?

Well mostly b/c families don't want condos.  They want ground level homes.   

But you can't have your cake and eat it too.  Either people need to adjust their expectations for what a family home looks like in the GTA or let it sprawl baby.

[Gurgie]

Sprawl? Seems like it's still held up by regulations because of the Green Belt... which I have no issue with, the green space is needed

http://www.torontosun.com/2017/01/28/greenbelt-forcing-up-home-prices-in-gta-critics

[OliverD]

Supply is the issue...this started a long time ago, back in 2002 when the liberals decided to force construction of high rises vs houses! Ideology took us down this path because they wanted to force people into tiny condos, except it blew up right in their face!

How did they force construction of high rises?

By controlling access to land to build townhouses, single family homes

Probably because the spawl created by single family homes was unsustainable (and likely still is).

Exactly.

The GTA went off the rails when they threw aside their long term planning and allowed "the market" to dictate what was built, and where. The result was sprawl and a geometric increase in the cost of providing services.

Don't get me wrong, I'm all for long term planning, but allowing the market to dictate what gets built isn't the worst thing as long as you don't have highly restrictive zoning. I shared an article a few weeks back about Houston and its relative lack of zoning laws and how that has resulted in affordable housing. Obviously the city has issues with sprawl but it's also seeing urbanization in its suburbs and a huge diversity in housing types.

How the hell would encouraging higher density - and hence the supply of housing, create a supply problem and raise prices?

I was wondering that myself.

[OliverD]

Sprawl? Seems like it's still held up by regulations because of the Green Belt... which I have no issue with, the green space is needed

http://www.torontosun.com/2017/01/28/greenbelt-forcing-up-home-prices-in-gta-critics

But what happens when demand forces development to jump over the green space, as has happened in Ottawa? You just end up with even worse sprawl.