Does Canada Need Restrictions on Foreign Ownership of Residential Real Estate?

[freeweed]

Originally Posted by flar

I just have to laugh when I hear people talking about a "free market" and "let the markets decide" and that the "market will correct itself"

Why? It worked very well in the free-er market down south, didn't it? The less government involvement via regulation, the richer everyone got. Duh!

[osmo]

Originally Posted by freeweed

Why? It worked very well in the free-er market down south, didn't it? The less government involvement via regulation, the richer everyone got. Duh!

Well the strange thing is in the USA. It was Govt policy to de-regulate. The housing bubble was prepped in Clinton's later years and blown up During Bush's. It was direct Govt policy to open the flood gates on Fannie and Freddie to Give more Americans access to homes.

There are few "Free" markets in this globe the only ones that come to mind are London's Central City which is pretty much a Casino as it has little to know regulation placed upon it, Singapore once you jump through the initial hopes the Govt puts up you can pretty much do what you want, and to a lesser extent Hong Kong (its molded as a "free market" but its heavily dominated by a few players).

[Vaillant]

no 아니다 non nein αριθ. não いいえ нет 否

[Boris2k7]

Originally Posted by osmo

The foreign Ownership debate is a red herring. Foreign buys in Canadian RE still make up a small modest percentage plus these buyers are subject to more strict funding requirements them typical Canadians. Cheap credit and next to nothing downpayments have made housing unaffordable for most Canadians not outside investment.

The market will correct itself. I can't say it is a "free market" tho. No western Economies are, yes credit and money can move freely amongst different markets and regions but to say for example the Canadian property market is "free" is a joke. The Govt has underwritten the current boom. Banks would not be handing out these loans in a free system where they would be subject to the losses. Banks are handing out record loans to Canadians because they understand they are backed by the Govt via CMHC. If the Govt removed CMHC loan guarantees the banks would be forced to demand collateral which mirrors what foreign investors must pay (25-35% down).

Simply put Canadians are pricing themselves out of homes. Its always convenient to place blame elsewhere but current home prices are largely are own creations and can't be stuck on foreign individuals you can't put a name or face to.

This.

[whatnext]

Originally Posted by osmo

The foreign Ownership debate is a red herring. Foreign buys in Canadian RE still make up a small modest percentage plus these buyers are subject to more strict funding requirements them typical Canadians. Cheap credit and next to nothing downpayments have made housing unaffordable for most Canadians not outside investment.

The market will correct itself. I can't say it is a "free market" tho. No western Economies are, yes credit and money can move freely amongst different markets and regions but to say for example the Canadian property market is "free" is a joke. The Govt has underwritten the current boom. Banks would not be handing out these loans in a free system where they would be subject to the losses. Banks are handing out record loans to Canadians because they understand they are backed by the Govt via CMHC. If the Govt removed CMHC loan guarantees the banks would be forced to demand collateral which mirrors what foreign investors must pay (25-35% down).

Simply put Canadians are pricing themselves out of homes. Its always convenient to place blame elsewhere but current home prices are largely are own creations and can't be stuck on foreign individuals you can't put a name or face to.

Drivel.

Do you really think BMO or CIBC is lending to Vancouverites for 41.5 million dollar teardowns, no matter how low interest rates are. I may not know this lucky Chinese princess' name, but she's hardly mythical and hardly alone:

This Toronto bungalow sold for $421,800 over asking. Yes, really

[The Chemist]

Originally Posted by Vaillant

否

This isn't the Chinese word for 'no'. In fact, Chinese doesn't strictly have words for 'yes' or 'no'.

[osmo]

Originally Posted by whatnext

Drivel.

Do you really think BMO or CIBC is lending to Vancouverites for 41.5 million dollar teardowns, no matter how low interest rates are. I may not know this lucky Chinese princess' name, but she's hardly mythical and hardly alone:

This Toronto bungalow sold for $421,800 over asking. Yes, really

I have been following this story for a while and I think Drug money was involved. You can clean your money up outside of the reach of Chinese officials and take a small hit. Or you can claim the home as a part of your businiess and bring family members over on it.

So either:

A. Expensive Passport.

B. Money Laundering.

Of Course RE Boards or the Govt wont look into it.. that's a small up-tick for Harper's GDP and a red dot on the the MLS map gone!

'Harper' --> <-- 'Richard Silver' (President of the Toronto Real Estate Board)

[whatnext]

Originally Posted by osmo

I have been following this story for a while and I think Drug money was involved. You can clean your money up outside of the reach of Chinese officials and take a small hit. Or you can claim the home as a part of your businiess and bring family members over on it.

So either:

A. Expensive Passport.

B. Money Laundering.

Of Course RE Boards or the Govt wont look into it.. that's a small up-tick for Harper's GDP and a red dot on the the MLS map gone!

'Harper' --> <-- 'Richard Silver' (President of the Toronto Real Estate Board)

We're going to have to reverse roles here, and I'm going to have to defend that Chinese family. You don't need to be in the drug trade to rake in obscene wealth in China - just exploit the local workers, poison the environment, cozy up to the commies in power and presto, you're rich!

You don't list where you live, but in Vancouver we are awash in that kind of foreign speculator, stashing their money in our housing as a way to help hide their wealth outside of China. Too bad no politician dares speak out against working Canadians being priced out of the market, but as CSIS hinted, Chinese money reaches far into politicians' pockets, even in Canada.

[Doug]

Originally Posted by osmo

I have been following this story for a while and I think Drug money was involved. You can clean your money up outside of the reach of Chinese officials and take a small hit. Or you can claim the home as a part of your businiess and bring family members over on it.

So either:

A. Expensive Passport.

B. Money Laundering.

Of Course RE Boards or the Govt wont look into it.. that's a small up-tick for Harper's GDP and a red dot on the the MLS map gone!

'Harper' --> <-- 'Richard Silver' (President of the Toronto Real Estate Board)

I've always suspected that money laundering must be easier in Canada. Otherwise, why does so much foreign money pour into Canada as opposed to Australia, New Zealand and the US?

[rbt]

Originally Posted by Doug

I've always suspected that money laundering must be easier in Canada. Otherwise, why does so much foreign money pour into Canada as opposed to Australia, New Zealand and the US?

What makes you think there is more here?

Australia and New Zealand are cottage country to many asians.

[Doug]

Originally Posted by rbt

What makes you think there is more here?

Australia and New Zealand are cottage country to many asians.

I lived in Aus for 4 years. Offshore money doesn't swing the market there to anywhere near the extreme it does in Vancouver and Toronto. I would have thought the Asian money would be pouring into places like California where real estate is selling at bargain prices.

[caltrane74]

Originally Posted by Doug

I lived in Aus for 4 years. Offshore money doesn't swing the market there to anywhere near the extreme it does in Vancouver and Toronto. I would have thought the Asian money would be pouring into places like California where real estate is selling at bargain prices.

But the money is pouring into places like California, Florida and Las Vegas. - Real Estate is cheap there. But it's also flowing into high priced Toronto, because people understand something about stable returns over 15 years ++++. Unlike the returns had you invested in California, or Florida. - When the money is invested, someone on the other end, has done their research no doubt. Otherwise, all the money would go to the lowest priced products, and it's not in Toronto, that's for sure.

[vid]

The Chinese are looking at the paper mill in Terrace Bay now. God, it's spreading!

[caltrane74]

Even with all the construction demand is outstripping supply for Toronto housing.

First 2 weeks of April still on a record pace


http://news.google.com/news/url?sa=t...to-home-prices

[worldwide]

regardless of who is buying what, I do know that Vancouver is a shitty place to live for someone my age (25). the job market is crap, the cost of living is obscene, and I will be moving to a normal city as soon as I get the chance. what a lot of people don't understand about the vancouver area is that it is not only select neighbourhoods close to downtown that are expensive, it's everywhere, even the distant suburbs. I could probably afford a small condo in butfuck nowhere suburbia but I refuse to put any of my hard earned money into a strata building. too much bs.

[vid]

The only real reason that Thunder Bay's housing starts are down is because we have pretty much run out of ready-to-build lots. Which is funny considering we have had a master planned community for 20,000 people on the books for 30 years.

[cornholio]

Originally Posted by caltrane74

But the money is pouring into places like California, Florida and Las Vegas. - Real Estate is cheap there. But it's also flowing into high priced Toronto, because people understand something about stable returns over 15 years ++++. Unlike the returns had you invested in California, or Florida. - When the money is invested, someone on the other end, has done their research no doubt. Otherwise, all the money would go to the lowest priced products, and it's not in Toronto, that's for sure.

Maybe because Canada has less homes then many greater metro areas in the world. Maybe because in about 80% of the world the wealth disparity is incredibly huge and society is unstable. Maybe because people from these parts of the world are not looking at making a investment but rather banking and laundering their wealth so that when shit hits the fan they still have a good chunk of their money tied up in real assets. Maybe because Canada has check and balances to protect people with money.

These people dont look at earning money on their real estate purchases, they go find 10 houses that are worth a combined 10 million, offer 12 million cash for them and call it a day. They can care less if 10 years down the road those 10 houses are worth 15million or 5 million, they can care less about rental income, or any income. All they care about is that those 10 houses will still be worth money 10 years from now.

[cornholio]

Foreign investors is not the problem, foreign money is when it is in a place that gives a passport to any foreigner with money. This is also nothing to do with Chinese money, its just that China has 1.4billion people, has grown at over 10% per year for a decade+, has one of the largest wealth disparities in the world and no protection in place for the wealthy. To top it off its a matchbox ready to ignite.

http://www.vancouversun.com/business...199/story.html
http://www.cnbc.com/id/44481201/Rein..._Fleeing_China
http://www.businessweek.com/magazine...-11222011.html
http://www.telegraph.co.uk/news/worl...hits-67bn.html

The solution is not only to restrict foreign ownership, it is to take control of our immigration policies and more importantly to track and tax foreign incomes(something that is not done at all). If someone earns 10million a year in China through business or corruption, regardless if its reported there, I want the Canadian government to find it and its origins and tax it(which by law is supposed to happen). If this person then wants to buy a house here, even if they have citizenship, then fine, but they better be paying their 3-4million per year in taxes to the feds.

One of the actual differences between Canada and America is that America is more aggressive in finding, taxing, and collecting their taxes on overseas income. Canada meanwhile does nothing, thats why it is so popular, no one questions where the money comes from, its like a Switzerland, money laundering capital of the world. The difference is that instead of stashing gold and cash in bank vaults, people are stashing their wealth in real estate. Moving large amounts of money around is risky as it can put up red flags now and especially later when Canada gets more aggressive at questioning where the money came from, but once you sink it in to that house your pretty safe, you can sell that house and the money from it can always be traced back to the property, and thats where the trail will end at that point. "store of wealth is what its called" Wealthy peoples priority is not to make more money its to safeguard and store their money, making more of it is a second priority, and this is even more the case when your cash cow and investments are in unstable places with no protection.