Canada ban foreign real estate investors

[Bronzeage]

It seems like a short sighted policy. The major cost of buying a house is not the sale price, but the interest on the mortgage. If the Canadian government was truly concerned about Canadians being able to buy a house, a program of low interest guaranteed loans with low down payments, targeted at specific segments of the economy, such as first time home buyers would be much more effective.

There is nothing that prevents Canada from doing this as well. In fact, it's an excellent idea and one that some communities in the US utilize.

I wish that the US would enact similar laws limiting or outright forbidding the ownership of real estate by foreign corporations and severely limit ownership by foreign investors.

Of course the major cost of a home is the mortgage but too many people in the US are locked out of home ownership by the initial price/need to come up with a percentage of that large price as a down payment. This includes people who have been paying rent higher than a mortgage payment for years. It's really hard to come up with a down payment when rents are so high. Rents are so high because of real estate speculation and the desire for profits by corporations.

Government policy always has a goal. In this case, someone is worried about foreigners buying houses. Their solution is ban foreigners from buying houses, which easy to circumvent. There's a lot of handwringing over house prices, but no one seems to understand the problem. Of course low cost loans will increase demand and raise prices. What's the alternative?
It's just past Christmas and everybody acts like they've never seen "It's a Wonderful Life", where George Bailey defends home mortgages, by saying,
" Don't it make them better citizens? Doesn't it make them better customers? You, you said that they -- What'd you say just a minute ago? They had to wait and save their money before they even thought of a decent home".
What's the point of bbn keeping home prices low if no one one can afford them?

 

[RVonse]

It is demand for short supply that drives up prices. If house prices are the problem, more houses is the solution.

That does not work either when land is most of the price of the house and/or the price of lumber is inflated too high for practical starter homes to get built. No one is building any starter homes anymore even in the US. The basic fact no can stay in business building a starter home for young families....that alone should tell everyone something is profoundly wrong.

 

[RVonse]

Government policy always has a goal. In this case, someone is worried about foreigners buying houses. Their solution is ban foreigners from buying houses, which easy to circumvent. There's a lot of handwringing over house prices, but no one seems to understand the problem. Of course low cost loans will increase demand and raise prices. What's the alternative?
It's just past Christmas and everybody acts like they've never seen "It's a Wonderful Life", where George Bailey defends home mortgages, by saying,
" Don't it make them better citizens? Doesn't it make them better customers? You, you said that they -- What'd you say just a minute ago? They had to wait and save their money before they even thought of a decent home".
What's the point of bbn keeping home prices low if no one one can afford them?

He said that back in the 1930's before the fed and global bankers had the chance to completely fuck the whole world apart. Because back in the 1930's price was still usable as a signal for discovery....long before cash was untied to gold (a real asset) and interest was artificially held low for decades. At this point, its hard to say just what a house really is worth due to lack of real price discovery. And at this point may well make better sense for everyone to rent than to own. Owning a house even at low interest will not make better citizens if that same citizen goes bankrupt when their main investment (home) suddenly deflates to where its price really belongs. Just because a bubble hasn't popped yet does not mean it will not pop in the future.

Centralized government never has worked and still does not work especially when done at the global scale.

 

[RVonse]

Blocking foreign purchases will substantially reduce the demand there. China is a big problem: The culture is real-estate obsessed and there are a lot of people looking for a place to invest money beyond the reach of the CCCP. China has already taken action against the capital outflow but that never works perfectly.

I couldn't agree more. If only we could somehow convince them that Antartica is the prime location to buy real estate.....so they would leave the rest of us alone. As an aside, I have already found it very curious that the Chinese took such a shine to Toronto which is one of the coldest places barely warmer than Antartica. I wouldn't have given 2 cents for what they are buying up for real prices there.

 

[TV and credit cards]

.

He said that back in the 1930's before the fed and global bankers had the chance to completely fuck the whole world apart. Because back in the 1930's price was still usable as a signal for discovery....long before cash was untied to gold (a real asset) and interest was artificially held low for decades. At this point, its hard to say just what a house really is worth due to lack of real price discovery. And at this point may well make better sense for everyone to rent than to own. Owning a house even at low interest will not make a better citizens if that citizen goes bankrupt after their main investment (home) suddenly deflates to where its price really belongs. Just because a bubble hasn't popped yet does not mean it will not pop in the future.

Why would they go bankrupt? Home valuation is just a number until it's sold. And when a bubble bursts, you call the bank and tell them to refinance at the lower valuation or you'll walk away. It works. The bank doesn't want to own your house and if they take it back, they are still looking at that lower valuation so it's better that they are at least getting a payment from you.
A burst real estate bubble is the one time the little guy can do the screwing.

 

[Toni]

It is demand for short supply that drives up prices. If house prices are the problem, more houses is the solution.

That does not work either when land is most of the price of the house and/or the price of lumber is inflated too high for practical starter homes to get built. No one is building any starter homes anymore even in the US. The basic fact no can stay in business building a starter home for new families....that alone should tell everyone something is profoundly wrong.

It’s the same principle: Short supply results in higher prices.

Yes, starter homes are still being built in the US. They are much nicer and much more expensive than the starter home my parents purchased in 1963. But yes they are being built.

 

[RVonse]

.

He said that back in the 1930's before the fed and global bankers had the chance to completely fuck the whole world apart. Because back in the 1930's price was still usable as a signal for discovery....long before cash was untied to gold (a real asset) and interest was artificially held low for decades. At this point, its hard to say just what a house really is worth due to lack of real price discovery. And at this point may well make better sense for everyone to rent than to own. Owning a house even at low interest will not make a better citizens if that citizen goes bankrupt after their main investment (home) suddenly deflates to where its price really belongs. Just because a bubble hasn't popped yet does not mean it will not pop in the future.

Why would they go bankrupt? Home valuation is just a number until it's sold. And when a bubble bursts, you call the bank and tell them to refinance at the lower valuation or you'll walk away. It works. The bank doesn't want to own your house and if they take it back, they are still looking at that lower valuation so it's better that they are at least getting a payment from you.
A burst real estate bubble is the one time the little guy can do the screwing.

Is that what happened during the last 2008 bubble? If the main asset becomes worthless enough the keys go back to the bank and that house stands empty.

 

[Toni]

Government policy always has a goal. In this case, someone is worried about foreigners buying houses. Their solution is ban foreigners from buying houses, which easy to circumvent. There's a lot of handwringing over house prices, but no one seems to understand the problem. Of course low cost loans will increase demand and raise prices. What's the alternative?
It's just past Christmas and everybody acts like they've never seen "It's a Wonderful Life", where George Bailey defends home mortgages, by saying,
" Don't it make them better citizens? Doesn't it make them better customers? You, you said that they -- What'd you say just a minute ago? They had to wait and save their money before they even thought of a decent home".
What's the point of bbn keeping home prices low if no one one can afford them?

He said that back in the 1930's before the fed and global bankers had the chance to completely fuck the whole world apart. Because back in the 1930's price was still usable as a signal for discovery....long before cash was untied to gold (a real asset) and interest was artificially held low for decades. At this point, its hard to say just what a house really is worth due to lack of real price discovery. And at this point may well make better sense for everyone to rent than to own. Owning a house even at low interest will not make better citizens if that same citizen goes bankrupt when their main investment (home) suddenly deflates to where its price really belongs. Just because a bubble hasn't popped yet does not mean it will not pop in the future.

Centralized government never has worked and still does not work especially when done at the global scale.

The book was published in 1939 and adapted as a film in 1946. The sentiment expressed is still true. If I had ever had any doubt living in a neighborhood that has a lot of student rentals in it has convinced me that home ownership is good for people and good for neighborhoods and good for towns and cities.

Bankruptcy does not mean you lose your home.

If a person defaults on their mortgage and the home is now owned by the bank, the value of the home is determined by market forces ( housing prices and demand and mortgage rates) and how motivated the bank is to offload the property.

 

[RVonse]

It is demand for short supply that drives up prices. If house prices are the problem, more houses is the solution.

That does not work either when land is most of the price of the house and/or the price of lumber is inflated too high for practical starter homes to get built. No one is building any starter homes anymore even in the US. The basic fact no can stay in business building a starter home for new families....that alone should tell everyone something is profoundly wrong.

It’s the same principle: Short supply results in higher prices.

Yes, starter homes are still being built in the US. They are much nicer and much more expensive than the starter home my parents purchased in 1963. But yes they are being built.

Where? Show me where the starter home is now being built in a good jobs location (such as Seattle or Los Angeles). Starter home for who? A professional couple who are either doctors or lawyers?

If they are nicer and much more expensive than your parents starter home they are not a starter home.

 

[Toni]

.

He said that back in the 1930's before the fed and global bankers had the chance to completely fuck the whole world apart. Because back in the 1930's price was still usable as a signal for discovery....long before cash was untied to gold (a real asset) and interest was artificially held low for decades. At this point, its hard to say just what a house really is worth due to lack of real price discovery. And at this point may well make better sense for everyone to rent than to own. Owning a house even at low interest will not make a better citizens if that citizen goes bankrupt after their main investment (home) suddenly deflates to where its price really belongs. Just because a bubble hasn't popped yet does not mean it will not pop in the future.

Why would they go bankrupt? Home valuation is just a number until it's sold. And when a bubble bursts, you call the bank and tell them to refinance at the lower valuation or you'll walk away. It works. The bank doesn't want to own your house and if they take it back, they are still looking at that lower valuation so it's better that they are at least getting a payment from you.
A burst real estate bubble is the one time the little guy can do the screwing.

Is that what happened during the last 2008 bubble? If the main asset becomes worthless enough the keys go back to the bank and that house stands empty.

The ‘main asset’ didn’t become ‘worthless.’ People became unwilling to continue to pay a mortgage on a home they perhaps overpaid for or had become less valuable because of a shift or drop in the market.

 

[RVonse]

If I had ever had any doubt living in a neighborhood that has a lot of student rentals in it has convinced me that home ownership is good for people and good for neighborhoods and good for towns and cities.

I don't disagree in principal. Its just that there can not be true home ownership without starter homes in the first place. Nor can there be home ownership if the price of the homes is tied more to monetary fed decisions than to real life.

 

[steve_bank]

Over here China has been buying up farm land, with all the potential issues.

Allowing whole sale foreign purchase of real estate is insane.

 

[RVonse]

.

He said that back in the 1930's before the fed and global bankers had the chance to completely fuck the whole world apart. Because back in the 1930's price was still usable as a signal for discovery....long before cash was untied to gold (a real asset) and interest was artificially held low for decades. At this point, its hard to say just what a house really is worth due to lack of real price discovery. And at this point may well make better sense for everyone to rent than to own. Owning a house even at low interest will not make a better citizens if that citizen goes bankrupt after their main investment (home) suddenly deflates to where its price really belongs. Just because a bubble hasn't popped yet does not mean it will not pop in the future.

Why would they go bankrupt? Home valuation is just a number until it's sold. And when a bubble bursts, you call the bank and tell them to refinance at the lower valuation or you'll walk away. It works. The bank doesn't want to own your house and if they take it back, they are still looking at that lower valuation so it's better that they are at least getting a payment from you.
A burst real estate bubble is the one time the little guy can do the screwing.

Is that what happened during the last 2008 bubble? If the main asset becomes worthless enough the keys go back to the bank and that house stands empty.

The ‘main asset’ didn’t become ‘worthless.’ People became unwilling to continue to pay a mortgage on a home they perhaps overpaid for or had become less valuable because of a shift or drop in the market.

Tell that to all the people duiring 2008 who sent their keys back to the bank and whose homes ended up in Warren Buffet's portfolio.

 

[Toni]

It is demand for short supply that drives up prices. If house prices are the problem, more houses is the solution.

That does not work either when land is most of the price of the house and/or the price of lumber is inflated too high for practical starter homes to get built. No one is building any starter homes anymore even in the US. The basic fact no can stay in business building a starter home for new families....that alone should tell everyone something is profoundly wrong.

It’s the same principle: Short supply results in higher prices.

Yes, starter homes are still being built in the US. They are much nicer and much more expensive than the starter home my parents purchased in 1963. But yes they are being built.

Where? Show me where the starter home is now being built in a good jobs location (such as Seattle or Los Angeles). Starter home for who? A professional couple who are either doctors or lawyers?

If they are nicer and much more expensive than your parents starter home they are not a starter home.

There is a whole lot of real estate that is nowhere near Seattle or LA. A whole lot of jobs, a whole lot of life very much worth living. And median housing prices in the $300K or less.

 

[laughing dog]

.

He said that back in the 1930's before the fed and global bankers had the chance to completely fuck the whole world apart. Because back in the 1930's price was still usable as a signal for discovery....long before cash was untied to gold (a real asset) and interest was artificially held low for decades. At this point, its hard to say just what a house really is worth due to lack of real price discovery. And at this point may well make better sense for everyone to rent than to own. Owning a house even at low interest will not make a better citizens if that citizen goes bankrupt after their main investment (home) suddenly deflates to where its price really belongs. Just because a bubble hasn't popped yet does not mean it will not pop in the future.

Why would they go bankrupt? Home valuation is just a number until it's sold. And when a bubble bursts, you call the bank and tell them to refinance at the lower valuation or you'll walk away. It works. The bank doesn't want to own your house and if they take it back, they are still looking at that lower valuation so it's better that they are at least getting a payment from you.
A burst real estate bubble is the one time the little guy can do the screwing.

Is that what happened during the last 2008 bubble? If the main asset becomes worthless enough the keys go back to the bank and that house stands empty.

The ‘main asset’ didn’t become ‘worthless.’ People became unwilling to continue to pay a mortgage on a home they perhaps overpaid for or had become less valuable because of a shift or drop in the market.

Tell that to all the people duiring 2008 who sent their keys back to the bank and whose homes ended up in Warren Buffet's portfolio.

It is a shame that people lost their homes . Some people lost their homes due to their own poor choices. Some people bought homes that they should not have, but were misled by lenders and ending up losing their homes. Some people lost their homes due to bad luck.

Since Warren Buffett does not buy worthless assets, your response is rather confusing.

 

[RVonse]

It is demand for short supply that drives up prices. If house prices are the problem, more houses is the solution.

That does not work either when land is most of the price of the house and/or the price of lumber is inflated too high for practical starter homes to get built. No one is building any starter homes anymore even in the US. The basic fact no can stay in business building a starter home for new families....that alone should tell everyone something is profoundly wrong.

It’s the same principle: Short supply results in higher prices.

Yes, starter homes are still being built in the US. They are much nicer and much more expensive than the starter home my parents purchased in 1963. But yes they are being built.

Where? Show me where the starter home is now being built in a good jobs location (such as Seattle or Los Angeles). Starter home for who? A professional couple who are either doctors or lawyers?

If they are nicer and much more expensive than your parents starter home they are not a starter home.

There is a whole lot of real estate that is nowhere near Seattle or LA. A whole lot of jobs, a whole lot of life very much worth living. And median housing prices in the $300K or less.

In the 1940's you could buy a starter home for 2 times your annual income. Where can you do that today? If the home cost $300k its in a location where average income is probably around $80k or less.

 

[RVonse]

.

It is a shame that people lost their homes . Some people lost their homes due to their own poor choices. Some people bought homes that they should not have, but were misled by lenders and ending up losing their homes. Some people lost their homes due to bad luck.

Since Warren Buffett does not buy worthless assets, your response is rather confusing.

You can blame the individual people who got into trouble but it is telling that so many people "made their own poor choices" all at the same time.

Whether or not Warren Buffet buys worthless assets is not the point. That he bought them in order to make them into productive rentals for the same people who involuntarily gave away ownership of those homes is the point.

 

[Toni]

If I had ever had any doubt living in a neighborhood that has a lot of student rentals in it has convinced me that home ownership is good for people and good for neighborhoods and good for towns and cities.

I don't disagree in principal. Its just that there can not be true home ownership without starter homes in the first place. Nor can there be home ownership if the price of the homes is tied more to monetary fed decisions than to real life.

You seem to live in a very expensive area, based on cities you’ve used as your reference point.

Starter homes really really depend on what people want and what they are willing to invest in.

I used to live in a very nice suburb of a major midwestern city where we re Ted a very small house—less than 1000 square feet total. At a certain point, the landlord raised the rent abd demonstrated an unwillingness to replace worn out appliances that we decided to attempt to purchase our own home. For us, it meant moving about a mile away into a less desirable ((snob value) neighborhood with the same excellent school district. The house we purchased was more than 15 years old and had been owned by people who had…terrible taste in decor. It was also more than twice the size of the house we were renting.

After we moved in and invited friends from our old neighborhood, they were astonished and couldn’t imagine being able to own a house that size. I told them that of course they could: they just had to be willing to move past a certain road that marked the southern boundary of where we had previously lived. They were horrified at the idea of moving beyond that boundary—even for a much bigger and nicer home in the sane excellent school district. They literally could not imagine living outside that little snobby enclave.

When we moved to another state, we purchased an old house in a walkable neighborhood that we were only able to afford because old Victorians are very undervalued, with most people in this area preferring to live in crappy split levels or cookie cutter houses on the edges of town. Because they represent ‘new.’ New is not always better. We looked at those before we bought this house and made a less conventional but very sound choice.

So if you want to buy a home you need to look at what is undervalued because of perception, not reality.

 

[Jimmy Higgins]

.

He said that back in the 1930's before the fed and global bankers had the chance to completely fuck the whole world apart. Because back in the 1930's price was still usable as a signal for discovery....long before cash was untied to gold (a real asset) and interest was artificially held low for decades. At this point, its hard to say just what a house really is worth due to lack of real price discovery. And at this point may well make better sense for everyone to rent than to own. Owning a house even at low interest will not make a better citizens if that citizen goes bankrupt after their main investment (home) suddenly deflates to where its price really belongs. Just because a bubble hasn't popped yet does not mean it will not pop in the future.

Why would they go bankrupt? Home valuation is just a number until it's sold. And when a bubble bursts, you call the bank and tell them to refinance at the lower valuation or you'll walk away. It works. The bank doesn't want to own your house and if they take it back, they are still looking at that lower valuation so it's better that they are at least getting a payment from you.
A burst real estate bubble is the one time the little guy can do the screwing.

Is that what happened during the last 2008 bubble? If the main asset becomes worthless enough the keys go back to the bank and that house stands empty.

The ‘main asset’ didn’t become ‘worthless.’ People became unwilling to continue to pay a mortgage on a home they perhaps overpaid for or had become less valuable because of a shift or drop in the market.

Tell that to all the people duiring 2008 who sent their keys back to the bank and whose homes ended up in Warren Buffet's portfolio.

Those people didn't lose their homes because the price of the house declined... it was never that simple. They lost the houses because it was more house than they could afford in the first place and they were provided gimmicky short-term mortgage lending that could only work if the value of the house continued to increase. When the values of the housing stopped increasing, people couldn't refinance using the built up equity from the inflation of the housing value.

Also, starter homes pop up in urban renewal areas, where old antiquated industrial areas have plummeted in value are bought up or older apartments from the 30s or 40s have been knocked down and new housing is built. Some of it is better than others. And not nearly as expensive as some of those other newer construction of "starter" homes. This is happening across Cleveland.

 

[Toni]

.

It is a shame that people lost their homes . Some people lost their homes due to their own poor choices. Some people bought homes that they should not have, but were misled by lenders and ending up losing their homes. Some people lost their homes due to bad luck.

Since Warren Buffett does not buy worthless assets, your response is rather confusing.

You can blame the individual people who got into trouble but it is telling that so many people "made their own poor choices" all at the same time.

Whether or not Warren Buffet buys worthless assets is not the point. That he bought them in order to make them into productive rentals for the same people who voluntarily gave away ownership of those homes is the point.

Yes, Buffet purchased what people got scared and dumped.

That’s something that happens every single day, all day long.