> During last year’s election campaign, Trudeau’s party also proposed a ban on “blind bidding” for houses -- the prevailing system by which offers are kept secret when someone is auctioning a home.<p>This is such a huge deal. Anyone who has had to go through the process of buying a home through a bidding war knows how unfair and one-sided this process is. It take a high-pressure emotional situation, and gives all of the information to one side (the sellers), while leaving the buyer stuck guessing at what the real price for the house is supposed to be. An absolutely horrible process that <i>should</i> be banned. Banning this is such a simple reform. I sincerely hope it happens, though I doubt it it will.
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?<p>Thought I do agree that a non-primary-resident investment, whether from citizens, foreigners, or capital should be greatly limited overall and these rules should only loosen to direct investment towards areas that are in dire need of an influx of capital for redevelopment. That is - if it’s not distressed, and it’s not going to be your primary residence - GTFO, you should be last in line to buy.<p>And I say that as former landlord. I just believe that if I was looking to make some money - I could probably do just fine under these conditions. I don’t see an issue of buying a distressed property needing a rehab, and I think doing so benefits everyone.<p>I am getting real tired of society getting ever more dystopian just so that someone can make a buck.<p><a href="https://www.fool.com/investing/stock-market/market-sectors/real-estate-investing/reit/" rel="nofollow">https://www.fool.com/investing/stock-market/market-sectors/r...</a>
> Freeland will introduce legislation that allows Canadians under the age of 40 to save as much as C$40,000 ($31,900) for a home downpayment within a new tax-exempt vehicle, the person said.<p>I'm not an economist but this seems pretty dumb? To the extent that it helps someone afford a home that they can save tax-free for it, the same is true of some of the people they're bidding against, driving up the price they ultimately pay for it. The government is just transferring their own future tax revenue to people who <i>own</i> homes, not people in the market for them.<p>It seems that governments have a reflex of dealing with a supply crisis by showering money on the demand side (see also: gas tax decreases, higher education subsidies, etc.), which just drives up prices further.
The data is public, less than 5% of homes are going to foreigners. Don't see how they even accomplish banning foreigners when there are free trade and free investment agreements. The problem is that bonds have negative yields. Retirement funds are forced into buying real estate, because housing is a safe investment right?<p>The federal government knows this and knows they can't do anything. If they targeted retirement funds like they should... what happens? Housing bubble pops, retirement funds lose tons of money. They are busy attacking the oil industry because they know they cant extract anything out of Finance, Real Estate, or insurance.
Liberal governments will do everything but the one thing that will solve the problem: make it much, much easier to actually build more housing. Everything else is just pointless busywork.
It is full loopholes like people with 10 year visas, work visas, student visas are exempt. We have University students with $31million Vancouver mansions in their name. Our tax system is screwy where we have very low property taxes and high employment tax. The whole west side of Vancouver claims poverty level incomes on average (like qualifies for government tax rebates bad), yet it is the most expensive land in the country.<p>Astronaut families are a problem and I feel leach on the society. Paying very low taxes, using all the social services, yet making income outside of the country so not paying anything.
I’m mostly familiar with Vancouver since my wife has relatives there. About half a dozen years ago they imposed a 15% tax on foreign real estate investors. I heard 2015 figures suggesting foreign Chinese investors accounted for one third of the $29 billion market in 2015. Vancouver real estate prices had been rising a lot for a long time but I think they felt the foreign investors exacerbated the problem for locals, especially since a lot of investors would just buy homes and no one would live in them.
I don't know about Canada, but in the US there are some tax law changes that could drastically reduce 'land hoarding' and help encourage excess capital to flow into <i>construction</i> of new properties rather than rent seeking.<p>Right now 1031 exchanges mean real estate over many other types of investment are tax advantaged, (I can't do the same thing with my stock for instance) and doubly so for places that put caps on property taxes.<p>The US (and canada?) should heavily tax capital gains on <i>land appreciation</i> for all but your primary residence, at the same time it would give tax incentives on capital gains for constructing new units.<p>Right now excess capital is encouraged by multiple tax laws to just play the rent seeking game waiting for land appreciation while others do the hard work of <i>causing</i> an area's land to become more valuable.
We need to end or put limits on the Primary Residence Capital Gains Tax Exemption which is uncapped in Canada, unlike the cap of 200k in USA. It is unfair to renters and it is leading to insane housing prices.<p>It is unfair to renters because renters do not have an equivalent 100%, completely unlimited tax-free investment vehicle. We have Tax-Free Savings Accounts, limited to ~$5k contribution per year, and we have RRSP's with max contributions scaled to income, but homeowners have access to all those things too, and they are limited. Homeowners can take advantage of TFSA, RRSP, and then shove all of their remaining savings into maxing out their home purchase and enjoy all of their gains completely tax free. Renters have to start paying capital gains at an inclusion rate of 50% once they max out TFSA/RRSP.<p>This system is completely unfair and places a higher tax burden on renters who are, on average, less wealthy than homeowners. It encourages us to spend more than we should be on housing just to get around taxes, and discourages investing in actual productive things like innovation/companies.
The ruling liberal party is out of touch here like many other things.<p>Key problem here is that the inventory is super low, part of it is due to everyone wants to settle in places like Toronto/Montreal/Vancouver due to high job concentration along with NIMBY attitude among the existing suburbs. There is an inflow of 400k immigrants every year who mainly tend to settle in the big cities such as Toronto/Montreal/Vancouver, putting upward pressures. On top of that, the liberal government flat out does not want to impose tax free capital gain from primary home sales, and wide availability of credits with as low as 5% downpayment which can be used with equities from first, second, third homes.<p>This is just a political move to show they did something. The liberal party minister once said they don't want to entertain any crush on house prices because that would be detrimental to new home buyers. When buyers get the signal that Government has their back and there will never be a crush [1].<p>[1] <a href="https://www.cbc.ca/news/business/housing-canada-policy-market-1.4413882" rel="nofollow">https://www.cbc.ca/news/business/housing-canada-policy-marke...</a><p><a href="https://www.thestar.com/politics/federal-election/2021/08/24/experts-shrug-at-liberal-housing-proposals-saying-they-wont-do-much-to-fix-crisis.html" rel="nofollow">https://www.thestar.com/politics/federal-election/2021/08/24...</a>
I could sell my house (not in Canada) for so much more than I bought it two years ago. But then what? All of the houses around here are going to corporations who are squeezing money out of those who can't find a home to buy. Because they've all been bought up by corporations. I'm not "anti-corporate" by any stretch of the imagination, but this is definitely a problem that is hurting families. I would vote for something similar here.
I live in metro Vancouver. The market is stupid right now (has been for years I guess). Its fairly common for houses to sell 200-400K over asking price, with sometimes one or two dozen offers.<p>Also as the article says, this is just a bandaid, won't fix things.<p>How about ending the bizarre zoning restrictions that result in a sea of SFHs with little islands of super highrise condos around transit hubs? Maybe that would untap a huge repressed demand for missing middle housing?
New Zealand did that years ago. It did nothing for price increases but at least it shut up some of the populist screeching. Price increases seem to have finally stopped and you know how? The government tightened the lending rules so regular first home buyers and owner-occupiers can't get such a big loan anymore. Those people were the problem all along but nobody wanted to blame them. They were supposed to be the victims.
It will be interesting to see what happens but I don't think it will do much as most of the people buying property are Canadians. And New Zealand, which has a similar policy, has skyrocketing house prices right now:<p><a href="https://www.globalpropertyguide.com/Pacific/New-Zealand/Price-History" rel="nofollow">https://www.globalpropertyguide.com/Pacific/New-Zealand/Pric...</a>
The Beaverton's take on this story:<p>"Canada to ban foreign homebuyers who refuse to set up dummy corporations"<p><a href="https://www.thebeaverton.com/2022/04/canada-to-ban-foreign-homebuyers-who-refuse-to-set-up-dummy-corporations/" rel="nofollow">https://www.thebeaverton.com/2022/04/canada-to-ban-foreign-h...</a>
I know HN is not the place for glibness, but literally: just build more homes. Everything else is rearranging deck chairs on the Titanic. Zoning reform is the answer.
Focusing on foreign buyers is a distractionary tactic. The primary cause of housing value spiking comes down to investors and speculators. Combat those, and the marketplace will return to sane valuations:<p>• Speculation tax of 50% of the assessed or sold home value (whichever is greater) of any home held for less than two years, decreasing on a daily basis to 0% over years 3 through 8. Exemptions can be had due to extenuating circumstances (military or police redeployment, divorce, death of co-holder of title, etc.). Because most pre-sales are snatched up by investors before ground has even been broken, only to be sold for two or three times its original value upon completion.<p>• Businesses (and by proxy, business owners that own multiple businesses) cannot own more than one rental residence per municipal district. This prevents speculators from buying up entire neighbourhoods just to jack up rents. There is a valid case for a business to own a residence (to host guests of the business), but anything more than the occasional guest can be put up in a hotel.<p>• Individual non-business landlords cannot derive more than 50% of their income from rental properties. Another method is to have taxes on rental income on a sliding scale depending on what proportion of their entire personal income rent is a part of, starting at normal rates up to 20% of income and rising to 100% taxation at the point where 100% of income is rental income.<p>The last one alone ought to protect people for whom landlording is NOT a full time job in of itself, such as people with mortgage helper suites or second homes that they upgraded from.<p>The point being, those with just one or three units are far less likely to be predatory than slumlords who own entire apartment blocks or institutional investors that own a significant block of rental units in a city.<p>And such a progressive taxation scheme ought to materially prevent rentals from being dominated by a handful of investors.
At this point it seems largely to be a performative gesture so that the Feds can say they're doing something.<p>The two biggest jurisdictions where there has been evidence of notable foreign investment in housing has been Vancouver and Toronto, and foreign buyer taxes were already introduced in those places years and years ago.<p>Prices certainly haven't gone down, but these taxes have had substantial impact in changing the sort of products that house developers are making. There's been a significant pivot by developers toward building purpose built entirely rental apartments whereas prior to the taxes developers rarely built these, instead favouring condominiums (multi-unit buildings where the apts are sold).<p>Seems like the government should provide some sort of evidence that foreign buying remains a problem. They haven't to date though perhaps they'll drop some numbers as part of the budget.
Read the small print:<p><i>The foreign-buyer ban won’t apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the person said.</i><p>They did this stunt here in New Zealand too, where "foreigners" excluded Australian Citizens, Singaporean citizens, and permanent residents.<p>Anyway, prepare for the media (and public, because the media determines how we talk) to use the term "foreign buyer ban" forever.
Canada used to be a really good place for foreign investment buying and renting/flipping houses pre-2008. My dad had around 50 properties in the Nova Scotia region just before the crash and the income from that was barely taxable (as a UK citizen, although I don’t remember specifics of how that worked). I can totally see why countries want to avoid foreign investment like that inflating local prices for citizens. Tbf he was renting them specifically to those with criminal records because most landlords used to have background checks, so there was a bit of a market, and it’s probably a little better than the general flipping price inflation.
Short anecdote to give a quick feel for things here:<p>I grew up in Waterloo. The home my parents bought in 1989 went up by about 2000% since then. I make more than both combined then, inflation adjusted, and can’t afford that home.<p>I bought a home down the road in a small blue collar city for 525k. It took 24 months for it to _double_ in value.<p>I hate this. It needs to stop. The bubble need to be popped.
The student exemption makes this decree useless. I live in the Bay Area and in my personal life cross paths with Mainland Chinese living their personal lives. I have more than once attended birthday parties at high-end houses that are sparsely furnished and inhabited except for a single “student”.<p>As a non-affluent person, I don’t know if rich Americans do the same thing. However, enrolling your child in a Master’s program, who takes the minimum number of credits per semester, may pencil in as a good property management option for someone with no ties to the U.S. otherwise and only wants capital appreciation.
Increase Property Taxes and channel this money to better services in the community and increase infrastructure for new housing developments. Build 20 minute neighbors where people do not depend so much on their cars.
<a href="https://www.eugene-or.gov/1216/What-is-a-20-Minute-Neighborhood" rel="nofollow">https://www.eugene-or.gov/1216/What-is-a-20-Minute-Neighborh...</a><p>It will also help to keep the prices lower.
A populist policy that amounts to pissing into the wind. Canada's rising real estate prices has a simple cause: demand far outstrips supply. The demand isn't driven by foreign investors. It's driven by a 1.1% annual population growth rate, the majority of which is immigration.<p>I am one of these migrants. Canada's immigration system recruits high-skilled workers and many of the fast track programmes require that you demonstrate a minimum proof of funds in the tens of thousands of dollars (multiples of the average Canadian's liquid savings).<p>High-skilled workers aren't moving to Canada to live in the abundant land of northern Manitoba. They're moving here to live in areas with relatively high opportunity: Toronto, Vancouver, and Montreal if they speak French. Housing demand is concentrated in those areas and surrounding regions.<p>There isn't a matching desire to build homes at a pace that outstrips immigration. Interestingly, total number of dwellings in Canada has grown by ~1% annually over the last 5 years. On the surface, that looks to match the immigration rate (1.1%), but both those numbers are for the whole of Canada. The majority of immigrants move to one of the main cities, whereas new homes are much more geographically spread.<p>TL;DR: increase homes or decrease people, everything else is pointless.
My anger about housing prices led me to create Real Estate Rebellion:<p><a href="https://www.reddit.com/r/realestaterebellion/" rel="nofollow">https://www.reddit.com/r/realestaterebellion/</a>
Good.<p>The way countries allow the ultra-wealthy to park money in real estate and pay almost no taxes on it while it drives up the price of a necessary resource for everyone else has to stop. Period.<p>In an ideal world, this wouldn't be a ban per se. I'd prefer to see that owning a property anyywhere allows that jurisdiction to tax your worldwide income and assets of the beneficial owner as if they were a resident.<p>Double taxation treatires exist and can handle that case.<p>New York City (as one example) should be for New Yorkers, not Russian oligarchs, nonresident billionaires and corrupt heads of state.
I see a lot of possible root causes being mentioned, e.g., blind bidding, zoning, foreign buyers, corporate buyers, and the vested interests of existing home owners.<p>Here's two more: income inequality, and the construction skills crisis.<p>Income inequality: You might think "prices are crazy, no one can afford this", but the fact is that some people are affording it, even repeatedly. Depending on your family and circle of friends, you may know someone who owns 2, 3 or 4 homes or one over-sized home. It is not uncommon, just not usually discussed openly. They buy or retain homes and then rent them rather than selling. Why horde houses? Some people just like to see a tangible asset. Most upper middle class people have most of their assets in stocks. But with stocks up significantly in 2020 and 2021, a lot of people are ready to diversify into real estate. And those who own homes can watch them appreciate even if the home sits empty.<p>Construction skills crisis: At least in the US, there just aren't enough construction workers to fill construction jobs. You could open up zoning rules, but that won't make housing starts instantly increase, because there are not enough workers. A generation of people has been taught that knowledge worker jobs are the best. I think that is a largely correct. Even with construction salaries up, I think that it is tough to have a long career doing physical labor in the trades.
The housing market in Toronto is a hot mess at the moment. When I told my friends in US that even for renting a condo, I had to put an offer that was more than the asked monthly rent they were surprised and wouldn't believe me!<p>The excessive imbalance in demand Vs supply also means that the owners have > 10 offers for each house and the prospective buyers/renters are just putting blind offers in the hope that their offer is more than most of the other offers.
No one wants to talk about the elephant in the room.<p>Canada has 'housing' but no one wants to live in anything other than a detached house close to the city.<p>Lots of condos, semi-detached, and townhouse, however no one wants them because you have to have a detached home to have made it in life.<p>I can't remember in my twenties obsessively wanting a detached house.<p>GenX is buying up all the houses after selling their condos and townhouse they bought as first homes.<p>Same people who's first car needs to be a 2022 BMW.
Are foreigners responsible for house price increases? Is it companies? Is it locals?<p>Who make up the buyers? Is there a breakdown? Ie foreign companies?<p>I would also like to know for Australia too.
There’s an exception for students and a lot of other loopholes here. I think it’s an excuse to give up after 2 years with “proof” that it was a bad idea.
Canada's immigration rate is over 1% it is very easy to get citizenship. There are already tons of front people with citizenship buying real estate on behalf of foreign investment pools. These measures are just PR, with 68% home ownership rate any measures that cooled home prices would be political suicide.
I don't think companies buying up homes are acting in the public's best interests.
I think we should require companies like zillow to build the homes they sell. They shouldn't be allowed to buy existing homes unless it is to repair low income homes for low income buyers.
This won't do anything. Dr Andy Yan (<a href="https://twitter.com/Ayan604" rel="nofollow">https://twitter.com/Ayan604</a>) has a pretty interesting take on all of this: "It still leaks. It may make a bit of a difference, but at the same time it doesn’t deal with the issue at hand, which is foreign capital, not foreign people" <a href="https://archive.ph/OcSYX" rel="nofollow">https://archive.ph/OcSYX</a><p>For those interested in how crazy this is in Canada, journalist Sam Cooper (<a href="https://twitter.com/scoopercooper" rel="nofollow">https://twitter.com/scoopercooper</a>) has done some awesome reporting.
It's just theatre. They don't want to do anything. Foreign buyers are not the source of the price inflation. If they did want to cool prices, they'd make a move to curb demand by forcing borrowing products to be more stringent, among other actions. According to plenty of analysis I've read Canada's problems are not primarily supply related. The price inflation is caused in large part by low interest rates and the ease of purchasing mortgage debt along with psychological willingness to pay more, and the dubious regulations around the real estate industry here.<p>Canada (especially Ontario and BC) has become so addicted to real estate inflation, so convinced in the inevitability of "number go up" when it comes to housing prices that it would be a toxic pill for any political party or government that actually cooled this market.<p>Hundreds of thousands of baby boomer upper middle class Liberal voters would <i>freak out</i>. People who have banked their entire retirement on expecting a payout on their home. And an entire generation of people who think this is just what housing does, and don't remember the early 90s housing price slump.<p>It's toxic, really. Get a group of adults together at a party in any home in Toronto etc. and the conversation veers into banal banter about housing prices and people live in their houses like they live in a <i>product</i> not a <i>home</i> -- what reno can I do to increase its value? What did the neighbour's place sell for? What could I get? Blah blah. It's been like this for so long.<p>Meanwhile, industrial / manufacturing cities like Hamilton, Windsor etc. have become unaffordable to the people who actually work in the manufacturing jobs. A poison pill for the actual, real, productive secondary industry on which Ontario and Quebec were traditionally built.
> Trudeau’s party also proposed a ban on “blind bidding” for houses<p>Blind bidding is so clearly biased towards sellers I couldn't believe it was legal in the first place.
The law is so toothless it won't do much. Foreign investors will just find a local conduit to "buy" the house.<p>> The foreign-buyer ban won’t apply to students<p>People will send their kid to college and buy them a 5 million dollar house to live in while they are there. And presumably they won't be forced to sell once the student leaves.
> The foreign-buyer ban won’t apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the person said.<p>Not sure if HN or OP removed the "some" in the title. It is quite important here, since the average foreigner in Canada is unlikely to be impacted directly.
I put this here. Tricon owns 30,000 homes.<p><a href="https://www.reddit.com/r/toronto/comments/tpym75/toronto_landlord_who_owns_30000_houses_explains/" rel="nofollow">https://www.reddit.com/r/toronto/comments/tpym75/toronto_lan...</a>
This is window dressing:<p>1. Many foreign buyers buy through a child studying in Canada or numbered company.<p>2. Canada’s immigration (~400,000/year) far outpaces housing completions (~200,000/year, of which only 50,000 are single family homes). Many of these are replacing existing housing stock, too.
I'm really doubtful. Foreigners are an easy group to blame, and they don't vote. I think the real problem is a supply crunch being exasperated by domestic speculators looking to invest money and not having a whole lot of good places to put it.
It sounds they're not forcing the "Mom and pop landlords" to sell though their hoard though, so they're just making it easier for them to continue their leeching. They're just as big, if not bigger, of a problem.
Here in the UK I've been saying for years that we should be taxing or banning sales to anyone who isn't a full-time owner-occupier.<p>The situation we have here with average property prices, reaching 10x median income, is simply untenable.
This ban will not fix the issue by itself, but it should reduce some pricing pressure.<p>I bet that the short-term rental market is also somewhat involved.<p>With any legislative approach to solving a problem, I wonder if enforcement is possible and likely to happen.
Will Canada ban > 50% foreign ownership of all state property? If not, then this will be the most useless ban ever. All you have to do as a foreigner is register a Canadian company and have the company buy the real estate.
"Some believe that secret bidding forces each potential buyer to offer as much as they can."<p>... Isn't that the whole point of an auction. Offer as much money as you can to get an thing that's worth that amount of money?
I’m glad it does not apply to foreign workers or PRs because I’ve met awesome people over my academic career that I 100% want to be my neighbours and fellow Canadians.<p>Unfortunately none of them are loaded enough to buy a place, so…
They also need to encourage provinces to change zoning laws to encourage mixed-use zoning and denser development. Suburban sprawl isn't going to be the best long-term answer to supply shortage.
the UK also need to do this asap. But problem here is normal people obsessing over the need to have a property empire. Its so so strange. The outlook on housing in the UK really needs to change
The Canadian economy is almost entirely dependent on real estate[0][1]. It's almost a certainty that the Liberal government would never hurt that sector in any meaningful way. I'm guessing that they're run the numbers and they know this won't have any real effect (other than political points scoring).<p>Most of the RE demand comes from immigration (in CA, currently more than 1%/year) - look at any country that has high immigration and you'll see huge appreciation in RE (CA, AU, NZ, etc).<p>You will also see a huge decline in birth rates in those same countries.<p>[0] <a href="https://en.wikipedia.org/wiki/Economy_of_Canada#Key_industries" rel="nofollow">https://en.wikipedia.org/wiki/Economy_of_Canada#Key_industri...</a>
[1] <a href="https://betterdwelling.com/canadas-economy-hits-a-new-record-for-dependency-on-real-estate-investment/" rel="nofollow">https://betterdwelling.com/canadas-economy-hits-a-new-record...</a>
A friend of mine recently bid on a house and came 2nd highest in the bids. The winning bid was $75,000 more than his...<p>That's a good example of blind bidding driving up overall prices.
Zero teeth. Why would it? Everyone here is a rich homeowner. Anyone who thinks anything will be done about housing is absolutely dreaming. Build more homes, housing gets cheaper, boomers lose their HELOC's, and we're in for a world of hurt. It's over.
Why is foreign investment in Canada real estate so big vs the US? Is it just a pyramid scheme or something, or are investors actually making use of the properties?
Would it ever make sense to have a tiered purchasing system? First prioritize first time homebuyers then if no first time homebuyers are bidding then open the net wider and wider. It's probably a very socialist idea and would never be given a serious though in Canada.
Want an exodus to reduce housing demand? Let the unvaccinated flee the country.<p>Some Canadian needs to step up and become the unvaxxed Moses. “Let my people go, Eh?”
Landlords are the biggest issue.<p>Where else can you buy a house for $x/mo , slap a rental on it for $1.5x/mo , and keep .5x/mo AND get equity?<p>That's a fucking scam no matter how you look at it. And they're adding in NOTHING to the economy. They're parasites that inject themselves on reasonable costing houses and arbitrarily inflate them for their own profit.<p>And who's predominantly doing this scam? Boomers are. They're the ones who have access to this kind of money and equity.<p>And who's getting screwed? Millenials and GenZ are.
I've been looking at the Toronto real estate prices a bit, and I'm convinced the real issue is primarily interest rates, not immigration, or construction. Don't take my word for it, ofc:<p>Immigration:<p>- Rent has not increased like real estate: <a href="https://www.zumper.com/rent-research/toronto-on" rel="nofollow">https://www.zumper.com/rent-research/toronto-on</a><p>- In 2020, immigration dropped by half to 184,500. Real Estate prices went up. <a href="https://www.canada.ca/en/immigration-refugees-citizenship/news/2021/12/canada-welcomes-the-most-immigrants-in-a-single-year-in-its-history.html" rel="nofollow">https://www.canada.ca/en/immigration-refugees-citizenship/ne...</a><p>Construction constraints:<p>- This is probably hyper-local, but in Toronto for example, they are building over 1 new housing start per year for every 100 residents (<a href="https://ycharts.com/indicators/toronto_on_housing_starts" rel="nofollow">https://ycharts.com/indicators/toronto_on_housing_starts</a>). That's not bad, it's not the CA Bay Area's situation.<p>- Anyone in Toronto can tell you there is a lot of home building going on with construction everywhere.<p>Canadian mortgages don't have the typical 30-year fixed rate that a lot of US mortgages do. Instead, typical mortgages reset every 5 years, and in fact many are month-to-month variable rates. In fact, the percentage of new mortgages originating as these variable rates in Canada has been rising and recently broke 50%. The majority of homes are now financed using a month-to-month variable rate which is set to some profit above Bank of Canada prime rate.<p>Until March, it was possible to get a mortgage with a 1% or even lower interest rate in Canada. Take a look at the average: <a href="https://www.ratehub.ca/5-year-variable-mortgage-rate-history" rel="nofollow">https://www.ratehub.ca/5-year-variable-mortgage-rate-history</a><p>In Mar 2020, Canada dropped the short term bond rate from 1.75% to 0.25% overnight. In 2008, they did something similar from 4% down to nearly zero, and had only just started raising them back towards 1.75% right before Covid. Only in March 2022 did we see the first rate hike and it was very mild.<p>Canada Real estate is basically a bubble driven by aggressively low interest rates. The problem now is that inflation is causing the interest rates to rise, and that could pop this bubble, so we might be seeing some of these laws designed to shift the blame.<p>More sources:<p>- <a href="https://en.m.wikipedia.org/wiki/Canadian_property_bubble" rel="nofollow">https://en.m.wikipedia.org/wiki/Canadian_property_bubble</a><p>- <a href="https://www.bloomberg.com/news/articles/2021-06-15/world-s-most-bubbly-housing-markets-flash-2008-style-warnings" rel="nofollow">https://www.bloomberg.com/news/articles/2021-06-15/world-s-m...</a><p>- <a href="https://betterdwelling.com/the-toronto-real-estate-bubble-now-has-1-in-59-workers-selling-homes/" rel="nofollow">https://betterdwelling.com/the-toronto-real-estate-bubble-no...</a><p>- <a href="https://seekingalpha.com/article/4477223-canadian-housing-market-party-is-over" rel="nofollow">https://seekingalpha.com/article/4477223-canadian-housing-ma...</a><p>- <a href="https://financialpost.com/executive/executive-summary/posthaste-canadas-housing-boom-has-been-unprecedented-the-fallout-will-be-too-say-these-economists" rel="nofollow">https://financialpost.com/executive/executive-summary/postha...</a>
I posted this earlier - <a href="https://news.ycombinator.com/item?id=30945227" rel="nofollow">https://news.ycombinator.com/item?id=30945227</a>. And no, it’s not supposed to be a tongue in cheek.<p>First of all, this “ban” is for 2 years. Secondly, majority of the homes bought, as in the stark-fucking-majority, are by investment firms. This ban doesn’t apply to them.<p>This is just another reshuffling of money that’s going to be pocketed by the government cronies. What are they going to spend $10B on? They aren’t the ones building houses and residencies, that’s for sure.<p>Other commenters in here are spot on. First they tried to swindle us by saying oh no no it’s not the foreigners, you’re just being racist and xenophobic. Now fucking what.
We all know that on an intuitive level, housing can never be affordable again in the West. At least in the areas that are currently out of reach for most people. The outlands, maybe, remain inhabitable but far removed from major cities. There’s no policy out there that will, by the time you wake up tomorrow, bridge the twenty-fold gap between what majority of people in the country make and what an apartment (never mind a house) costs.<p>This isn’t a matter of supply and demand, of investors taking 80% of all new houses, of foreigners laundering money, or of NIMBYs. These are all red herrings. These are all secondary effects of a bigger problem. These are all ways to ignore the real problem.<p>No amount of policy will slash house prices in Toronto by half, and no policy will double your income to match the increasing prices.<p>I suggest you stop looking for policies, because by the time any of them take effect and reverb through society, long enough time would have passed that you’d spend your whole life renting and paying off someone else’s mortgage anyway.<p>Now ask yourself if that’s the future you want, and act accordingly.
This is nothing but pandering for votes before an election for those who don't understand this won't have any significant impact on affordability of houses for Canadians.<p>There's a reason why we still also pay the highest telecommunications bills in the world - industrial complexes have captured our government, and even it's far worse that that; regulatory capture.<p>Edit to add: 3 points down to 0 points; downvotes are an embarrassment to civil and critical conversation, and you should be embarrassed if you use them.