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shots shots shots posted:Curtailing short-term speculative behavior is possible (high taxes on gains and such), but it's basically impossible to stop most of the other behavior. It's extremely easy to lie about property occupancy, and arbitrary restrictions on foreign ownership are bullshit at best and downright racist at worst. I'm personally ambivalent about foreign-ownership restrictions. However, I fail to see why they are "bullshit" or "downright racist". We restrict plenty of things to our own residents and citizens (jobs for instance - though that has been weakened somewhat recently with Temporary Foreign Workers, the point remains). Why would a policy restricting home ownership to our own citizens be racist? Of course, I get that there's a perception (if not actual reality) that tons of Mainland Chinese are buying up properties. But the "race" of said people is incidental, no? There would be similar calls to restrict foreign ownership if it was widely believed that throngs of Danes or Swedes, for instance, were bidding up prices. Not trying to be inflammatory in any way - just genuinely curious why you think this.
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Apr 7, 2013 15:51
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ocrumsprug posted:The arguments for restrictions typically have the following features: Like I said, I'm personally ambivalent about such proposals, mainly because of reasons (1) and (3). I'm certainly not advocating it, though it would certainly reduce the pool of buyers - that much is certain. Whether it would increase affordability for the average Canadian due to the various unknown unintended consequences is entirely a mystery - and until that's settled, it's likely a bad idea to implement. I simply disagree that such a proposal, in the abstract, is axiomatically racist. One certainly could advocate this for racist reasons, and doubtless that happens (perhaps in a widespread manner). But like I said - we exclude foreigners from plenty of things - indefinite residence (outside of immigration channels), jobs, owning banks - and I don't think that's racist to do so. Part of the benefit of being a nation state is the ability to give your own citizens preferential treatment in various aspects of life (whether it's a wise policy decision in any of those is an entirely separate matter). For the life of me, I don't see why property ownership is any different on the face of it (even if certain advocates may have racist leanings themselves). Lexicon fucked around with this message at 18:04 on Apr 7, 2013 |
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Apr 7, 2013 17:58
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ocrumsprug posted:All of those things however are axiomatically xenophobic. Now that isn't to say that some restrictions are not justifiable. For instance, if you feel foreign ownership of telecommunication isn't in your national best interest due to real or perceived risks, you should disallow it. Indeed. We're in agreement here. ocrumsprug posted:What is the preferential treatment being offered to Canadians here? We are still the only people allowed to live here indefinitely anyways. Well, under foreign ownership rules, presumably only Canadian citizens, naturalized or otherwise, would be permitted to purchase property. "Preferential treatment" is a hollow term, but it's conceivable as a right we'd only extend to our citizens. Australia has implemented this to some extent if I'm not mistaken, and to very little effect by the sounds of things (side note: what the hell is it with Anglo-Saxon countries and their drat fetishization of property!) ocrumsprug posted:Someone making that statement shouldn't be branded immediately as a racist. However a VERY large majority of people will remove any doubt about it, if they were to actually articulate why they think it is so. Of this I'm sure you're correct. See, we're really in broad agreement - I just bristled slightly at the absolute equivalence of such a policy with racism (not unfairly, I think, given the preponderance of outlandish statements on the left and right in these here subforums).
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Apr 7, 2013 23:29
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Throatwarbler posted:It's racist because there is no other explanation for why you should think it is good policy. Everything else you talked about has at least a slightly plausible (even if rarely justifiable in reality) whiff of foreigners, i.e. people who are outside of the Canadian democratic political process, somehow benefitting unfairly on the backs of Canadians. The welfare and other benefits that come with citizenship and permanent residency, for example, or the implicit backing of the state and taxpayer behind the banks.  First of all, as already mentioned, I don't think it's good policy. Second of all, as already mentioned, one plausible reason is that it reduces the pool of buyers and thus hopefully reduces demand and thus hopefully reduces the price level. That's an awful lot of "hopefullies", but at least it's a reason beyond fear of living adjacent to The Yellow Menace. Throatwarbler posted:Should we also ban exports of oil because why should a dirty foreigner be allowed to buy oil when TRUE CANADIANS still have to pay for gas? Or cars built in Ontario because there are REAL CANADIANS who need cars? How about we ban all foreign companies from employing Canadian workers, because they are driving up the price of labour for those poor REAL CANADIAN companies? Actual people think all of these things (hell, I bet you could find instances of each in the Canadian Politics thread alone). Some are racist, some are stupid, some reject economics outright, some are motivated by other considerations. They are not, however, all racist.
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Apr 8, 2013 00:11
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Throatwarbler posted:Well good, then your views are consistent with someone who is not a racist?  In common with many racists, I had breakfast this morning. In common with many non-racists, I prefer my coffee without sugar. The world is not a dichotomy of racists being racist, and non-racists being non-racist.Throatwarbler posted:Eh, OK. I kind of addressed this in my third paragraph. Ok. Quitting while we're ahead.
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Apr 8, 2013 00:29
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Throatwarbler posted:what's stopping them from selling their houses for those reduced prices? What does this even mean?
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Apr 8, 2013 16:04
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Guy DeBorgore posted:imagine that instead of Chinese people buying homes, someone was using a money printing machine to buy up new homes with newly-minted cash; should we shut them down? This is the most hilariously unhelpful analogy I've seen in quite some time. We shut down counterfeiters for reasons entirely unrelated to their impact on an asset class' pricing level.
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Apr 8, 2013 16:53
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ocrumsprug posted:Will it? Can you quantify how much foreign investment exists, and a percentage affect it has had own home values in Vancouver or Canada? Obviously no one can do this because the real estate cartels have never bothered to collect stats (whether through incompetence or because they benefit from an environment of poor information, I'm not sure), and even if they did, I'm not sure it would reflect reality anyway as it's apparently trivial to hide the origin of capital with shell corporations, etc. That said, is it your thesis that foreign capital has had zero impact whatsoever in the pricing of Canadian real estate, and in particular the massive run up over the past decade? Genuinely curious. Personally, I reckon it's a mild contributory factor, with the overwhelming reason being Canadians (and Americans before them, and Brits at various points in the past) who are mostly innumerate and not analytically-minded, working themselves up into a collective maniacal lather about "prices always go up!", "don't pay other people's mortgages, etc", aided by the cheerleading of the FIRE sector. Mostly self-perpetuated in other words.
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Apr 8, 2013 17:24
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Guy DeBorgore posted:I don't think you really "get" analogies. Right back at you. Analogies are supposed to strengthen one's argument, not entirely devalue it (your post was pretty good up until that point).
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Apr 8, 2013 17:53
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Fine-able Offense posted:I agree in principle, but there is also a factual element of... poor capital controls, lack of enforcement, whatever you want to call it, that leads to dirty offshore money (and not just from China!) flooding into Canada as a cash haven. The only penalty to being caught with a suitcase full of dirty money is a tiny fine and a stern talking-to, then CBSA gives you your money back and sends you out to the River Rock Casino to help with the laundering process. I don't disagree with any of this. I just don't care that much about foreign money in the broader picture of the Canadian housing bubble - Russian oligarchs, Chinese CCP officials, and good old-fashioned American capitalists aren't the reason why a poorly built skybox in Burnaby now retails for north of $400k (more than some very nice properties for sale in the Upper East Side of Manhattan where I just visited). I utterly despair at what locals have gotten themselves into, and thus how badly this will end when the music stops. By all means give the CBSA some teeth, consider imposing some capital controls (assuming it's thought through)... but the real tragedy in my view is what locals have done. It won't end well.
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Apr 8, 2013 18:01
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ocrumsprug posted:I think the real estate cartels being able to obfuscate, or outright misrepresent, the information is a significantly larger contributing factor, and would rather have that be addressed. It's absolutely outrageous in my view that this significant (in terms of societal importance, dollars invested, and percentage of net worth) market is so opaque and sewn up by these fuckers. Not to mention the outright fabrication they engage in (that MAC marketing thing was just one incident in a long line of deceptions). The small-time investor spending $3000 on a sector ETF is immeasurably more protected by layers of regulation, oversight, and transparency than the property purchaser spending $300,000+.
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Apr 8, 2013 18:16
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^^^ Out of curiosity Fine-able Offense, mind sharing what it is that you do for work? Sounds a bit like you're some renegade real-estate bear that's infiltrated the high-echelons of the real estate industrial complex 
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Apr 8, 2013 18:31
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dethslayer666 posted:Uuhhh, you guys are lobbing sentences at each other, yet, by my reading, you actually don't really disagree on anything. You both seem to be arguing a variant of the same point.
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Apr 8, 2013 22:38
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Guy DeBorgore posted:Most people, I imagine, would be in favour of deflating housing bubbles if it was explained to them, but opposed to anything that lowers their personal house's price. Therein lies the problem. I think, actually, a lot of boomer types are really starting to regret the fact that many of their families have zero chance of living in the same neighbourhood. Visits to see the grandparents will entail a 1 hour plus drive in lovely traffic, not a 10-block bike ride. So it goes.
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Apr 9, 2013 04:18
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SpaceMost posted:What are the meaningful differences between a $400,000 mortgage @ 10% and a $200,000 mortgage @ 5%? (pretend my examples are in equilibrium) I think you got the amounts and percentages backwards, right? A low mortgage amount A at a high percentage B, or a high mortgage C at a low percentage D could conceivably have the same payment for particular appropriate choices of A, B, C, D. Even if the payments are the same, the situations are not equivalent. For one thing, the latter has interest rate risk. The post-2008 ZIRP policy has gone on far longer than I or most other observers would have guessed, but still, interest rates really only have one direction to go, yet many borrowers are leveraged to the limit of their current ability to pay. By contrast, at a higher interest rate, there's reasonable chance your rate could be lower next time the renewal cycle comes up. Right now, mortgages are about as close as possible to free money - over a decade or longer horizon, it starts to look unlikely that this will persist indefinitely. Obviously this is less of an issue in the USA where you can still get 25 or 30 year loans at whatever stupidly low percentage. Not so here.
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Apr 9, 2013 17:47
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Fine-able Offense posted:According to Ben Rabidoux, Montreal now has almost as many homes on the market as Vancouver and Toronto combined. To recall a previous talking point: that it's so widespread nationwide supports the view that it's not predominantly foreign money bidding up the prices, in my opinion. A collective mania.
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Apr 10, 2013 20:51
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Fine-able Offense posted:I agree that it's not predominantly foreign, but you'd have to be blind not to see that the two most inflated areas in all of Canada- Richmond and the Dunbar area of Vancouver- are also attracting the vast majority of the hot money. Well yeah. The points are not mutually exclusive.
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Apr 10, 2013 21:31
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Barrakketh posted:Montreal has gone condo crazy. The city has a program in place, accesscondo.org,that will front 10% of the total sum of a unit as long as you have 1000$ to put down. Schemes like this and BC's first-time buyer tax credit, not to mention RRSP-raiding for down payments, make me furious. Revenue is getting pulled from all sorts of more worthy causes, and as far as I can tell, the only real outcome is more dollars chasing the same housing => thus benefits accumulate to developers. Barrakketh posted:Meanwhile, if you're renting (like I am) You're stuck looking at crack dens in Villeray and Anjou, paying easily 800$ for a half-room in the Plateau, or dilapidated 3 1/2 workers' homes from the 1930's in Verdun starting at 750$. It's that bad. If you're not making a decent salary your only real options for a good appartment are out in the boonies of Pointe-Aux-Trembles or off the Island on the South Shore or Laval. Otherwise, get used to dealing with roommates you find on Craigslist and Kijiji. Well I imagine a good portion of all those condos are going to be on the rental market in short order, so that should help in tempering prices and putting a floor on quality. At least one would hope. I've heard anecdotes suggesting this is starting to happen in Vancouver... Lexicon fucked around with this message at 23:01 on Apr 10, 2013 |
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Apr 10, 2013 22:09
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SpaceMost posted:I like the RRSP plan because it gives me the flexibility to top off my annual RRSP contributions (no small feat) without having to worry about possibly maybe buying a house in 5-10 years. Without it, I'd have to decide every year if I want to save for a house or save for retirement, and act accordingly. We're only talking about 25 grand here, which is gently caress-all as a percentage of any sort of housing in this property-daft country of ours. And that money does nothing but goose asking prices higher - as everyone can rob their RRSPs.... so again, more dollars chasing the same housing. Retirement saving should be for retirement. End of story. MaterialConceptual posted:In some slightly positive Vancouver news the Independent COPE faction has taken control of COPE, pushing out the Vision-coalition faction. They are pretty focused on the issue of affordable housing and could use some help, because they sure aren't going to be able to buy their way into office! The only thing that'll make Vancouver more affordable is when it becomes sufficiently poo poo of a place because so few people are willing to live there, not municipal parties. There's the odd article in the G&M, etc, about doctors and similar professionals who want a house, and but obviously can't buy. When you're at the point of driving away professionals that are integral to the functioning of a city...
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Apr 11, 2013 18:06
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mr. unhsib posted:That's an exaggeration. I had a comparable place to that in the plateau...bought in 2009 for $245K, sold in 2012 for $294K. Probably a wise business decision. As mentioned above, Montreal is off the charts right now with inventory.
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Apr 12, 2013 00:20
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Fuzzy Mammal posted:Well reading this thread has certainly been enlightening. I'm from North Van (parents sold in 2001 Dude, you're already in the United States. In an economically robust part, at that. If you must invest in real estate, do it there. Huge  at them trying to get you to buy a loving Toronto condo... the distance alone would make this a bad idea - nevermind the fundamentals.
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May 15, 2013 21:46
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) and my wife is from Richmond Hill. We live in Seattle now and are lucky enough to hold top tier software jobs with the wherewithal to invest, and her family in Ontario has been pushing us for several years to buy a condo in TO for rental purposes. We've demurred mostly over the hassle of being a distant landlord but holy poo poo that is the smallest of all reasons not to buy. I can't believe how messed up this market has become.
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Fuzzy Mammal posted:I'll end this derail by saying come on down if you can I suppose. Judging by your location and profile, there's a nonzero chance we used to work in the same office  I left to do a Masters and other stuff North of the 49th. In retrospect, this may have been a mistake - feeling increasingly uncertain that Canada holds the key to a happy future. Might have to come back down...
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May 16, 2013 00:26
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Cultural Imperial posted:The rental market in Vancouver is dead. Dead how-so? Price:rent and thus cap rate is totally out to lunch, but there's still a reasonably healthy market for actually finding tenants, no?
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May 17, 2013 16:39
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Cultural Imperial posted:It's really hard to find tenants right now. I've got family members trying to rent out their places and it ain't happening. Hmm, ok. But the vacancy rate is still pretty low, unless things have changed since I was last in Vancouver. I take what you're saying at face value, but maybe in your family member's case they are trying to charge too much? Some landlords have this notion that the only fair rental price is that which covers the entirety of their carrying costs at a minimum.
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May 17, 2013 17:33
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Cultural Imperial posted:I've never been to Windsor but if it's anything like Waterloo/Kitchener, that house better be $60k at the loving most. I've never been, but at least Waterloo/Kitchener has a pretty happening tech scene. Its future may be somewhat uncertain what with RIM's effective implosion, but there's still a pretty good scene as a natural consequence of the university, or at least so I'm told.
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May 17, 2013 17:35
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Fine-able Offense posted:They don't count condos being rented by individual landlords, basement suites, etc. Haha, are you serious?? Then I don't think "high-noise" even begins to describe its uselessness then. Fine-able Offense posted:Also, anecdotally, the rental market is soft as gently caress right now. Nobody I know is getting increase notices at their anniversary, stuff like that. Interesting.
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May 17, 2013 17:45
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^ Why are supposedly profit-maximizing individuals apparently wont to let their properties remain empty rather than accept a [market] rental price that may be far lower than their carrying costs? This is a widely reported meme, not only in the residential rental market, but also commercial (hence the many empty shopfronts on Robson and elsewhere). It's one thing to occupy a place yourself until you get the rental rate you want, but to leave it empty.... I really shouldn't let economic rationality enter any discussion about Canadian, let alone Vancouver, real estate, but I dunno... I'd take what I could get. Of course, I also wouldn't (and didn't, and won't ever) have bought a condo either, or any other form of property in this country while its as hosed as it is.
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May 17, 2013 18:18
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http://business.financialpost.com/2013/05/30/why-its-dangerous-to-short-the-canadian-banks/quote:For the big, swinging hedgefunds south of the border it must have seemed like a no brainer. The Canadian housing market is a bubble set to pop so why not short the banks that hold the mortgages? Does anyone else find it hilarious that this sentence is just casually tossed in, in a Canadian publication no-less - basically in full acceptance of the reality at this point? This would've been unthinkable a year ago.
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May 30, 2013 16:59
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A bit off-topic, but with mortgage brokers and their various representative bodies constantly bleating that we can all look forward to massive job haemorrhaging thanks to the Feds (in cutting down the worst excesses of CMHC etc), it raises a question in my mind: why, exactly, is 'mortgage broker' even a thing? A mortgage is, at least conceptually, an extremely simple instrument (I've never had one, and am in zero rush to, so correct me if I'm wrong). There are only a handful of institutions that one can enter into a mortgage with, and in each case these are parametrically simple (duration, rate, open/closed, variable/fixed, breakage fees). It seems like it should be a relatively simple matter to survey the offerings, rank by attractiveness, and apply down that list until you're accepted. Moreover, there are bank locations everywhere, and other than peddling overpriced mutual funds, I don't see why there wouldn't be ample capacity in their myriad locations to handle this work. What am I missing here? Why is there this [ostensibly well paid] layer of middle men in a market that, at least under casual analysis, ought not to need it? I'm genuinely curious. Hopefully the reason is actually interesting and not just "there's so much money, excess, and barriers-to-entry in finance land that no one's really bothered to question it)
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Jul 9, 2013 03:25
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Hal, thanks for that explanation. Am I misreading what you said, or did you imply that a "broker" must be involved in *every* Canadian real estate transaction? I thought it was simply an alternative to sitting down with a few banks and picking the one with the best terms. I can understand the desire to avoid money laundering (spectacularly failed though it may be), but surely that's something that could be handled by an entire bank department pretty successfully?
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Jul 9, 2013 04:18
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I'm all for technology/network analogies, but that thing made zero sense to me. edit: also, FDIC has nothing to do with Canada so I'm not sure how that made its way in there. Lexicon fucked around with this message at 05:21 on Jul 9, 2013 |
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Jul 9, 2013 05:03
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Baronjutter posted:I just keep checking this thread for someone to give me permission to buy a condo in Victoria Jesus man. If you must own an illiquid, depreciating asset, why not buy a rare, old BMW or something?
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Jul 9, 2013 05:26
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Or alternatively, spend half an hour studying the relevant price-to-rents ratio in the area, and very likely conclude it would be insanity to buy.
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Jul 11, 2013 12:28
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Baronjutter posted:I've looked at the rent/buy figures for comparable rentals to units I want to buy and they're often quite a bit more expensive to rent, or at best about the same. Can you post your parameters, out of curiosity? The only way I can imagine that's true is if you're ludicrously overpaying for rent right now, or you're buying something unfathomably cheap. For my own residence ($1600 rent, $500k price), it essentially never makes sense to buy rather than rent (and that's even assuming a 3.5% mortgage rate throughout!). This thread ain't called the Canadian Housing Bubble thread for nothing.
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Jul 11, 2013 16:19
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Fine-able Offense posted:It all seems very impressive and logical... if you predicate your departure point on the idea that banks and mortgage brokers know what the gently caress they're doing, and that it's not a GIGO information system they're using. It seems like this response makes more sense as applied to the dude above with his bond curves and so on?  edit: actually, yes, pretty sure that's what you were referring to. Indeed.
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Jul 11, 2013 17:03
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 So many faulty assumptions in one post (though you did have the good graces to admit you're not financially literate - that need not be a permanent state of affairs though).For one thing, you cannot simply cannot take the sticker price of $250k, muse on it selling for $150k down the line, and call that a $100k "loss". It doesn't work like that. For one thing, the dollars under discussion change due to inflation. And it is very far from free to have that financing for the period. Financing is one of several substantial carrying costs during the period that you own. There's also the opportunity cost of having your own capital tied up. Another thing: why is money spent on rent "down the toilet"? Why is it only wasteful in your eyes to rent space, but not to rent cash (as you'd be doing with a big mortgage)?
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Jul 11, 2013 21:18
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Hal_2005 posted:The APR rates are quoted differently in the US and in Canada. You will need to adjust for that. My suggestion would be to check investopedia on how to adjust annuity rates or download one of the apps that can help you do rates. CHMA I think has a link on their homepage to a java app. I know you're just trying to be helpful, but  at the idea of me installing a loving CMHC-coded java app. I'd probably be more likely to get into the condo flipping game.
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Jul 12, 2013 13:06
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Jesus, stop being so butthurt over an offhand, and demographically-accurate-in-general comment. You're clearly absolutely chomping at the bit to buy into this risky, illiquid and overpriced asset class, despite copious advice to the contrary and your own admission of innumeracy. So why not just go ahead and pull the trigger, and you can serve as the thread's resident 'cautionary tale' in a few years.
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Jul 12, 2013 19:06
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Baronjutter posted:It's a very hard subject to research your self because there's so much disinformation out there. When I went to the bank to really talk about the realities of buying none of this stuff ever came up despite asking if there's any other major costs we're not calculating. Nope it's just "Renting will be 1500, your mortgage will will only be 800 plus condo fees! Time to buy!". I know for you guys all this stuff is "common sense" or the "basics" but for a vast amount of people, probably the majority, we were never taught this stuff in school, our parents didn't know any of this stuff, none of our peers know any of this stuff, and the only authority figures who claim to be experts are constantly trying to mislead us. The world is essentially a big gauntlet run organized by people highly focused extract money from you. You'll generally do well by never forgetting this. I'm not sure why you'd go to a bank expecting anything other than misinformation that's contrary to your best interests. ocrumsprug posted:e: And I wish I could sell it, but my wife is in full "home ownership mystique is worth more than all the money in the world" mode. Frankly, that attitude is idiocy and is a major component to how things have managed to get so bad. This whole thing is a very 'Anglo' phenomenon (a bit less so these days in the USA, perhaps). I just visited Switzerland where the social norm is to rent and property is frequently owned by large pension funds and REITs and the like. Walking around the streets of Zurich, it was rather difficult to argue that they're worse off than we are...
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Jul 12, 2013 21:33
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Solution: Stay put! At $300 a month rent, you've got a very unique opportunity to sock away *loads* of cash. Use some of it to take the wife to Italy or Spain for a month every year, and go for a nice dinner every other week - both of which should keep her sweet (you can easily afford this with all your savings on housing). Once you start thinking in terms of opportunity cost, it's impossible to stop.
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Jul 12, 2013 22:45
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