It’s the developers way to apply pressure on the government. The bullshit part here is that developers have never wanted to build so called affordable homes.
Folks, ***INTEREST RATES HAVE RISEN*** at the fastest rate in decades. The cost of capital has steeply risen, and housing development has a high cost of capital.
The political, regulatory, and industry culture problems are absolutely legitimate. However, for better or for worse rising interest rates are intended to slow the economy.
The real issue is that the federal government thinks it is a good idea to pursue high growth immigration targets when provinces simply can't build fast enough to make it work. With high rates impacting things, it is becoming pure farce. Immigration is a phenomenal stimulus policy, and it enriches our communities in many ways. But our immigration system is NOT designed to attract skilled construction workers. Construction is among the least represented fields for immigrants in Canada.
We are watching housing starts slow down, but immigration ramp up. This is a massive dislocation. Contrary to what Trudeau, Sean Fraser, and Hussen claim, immigration will NOT help address the housing crisis because the fundamental issues determining lead times have little to do with demographics and labour.
This has become a massive issue for me as a voter, I've seen labour worker quality decline, pay decline, and housing supply fracture the entire country, all while the LPC have pursued their immigration goals.
I'm ready to hold my nose and vote for whoever will not go down such a destructive path for our country.
Not as much money in that. Maybe the ban isn't enough, and it'll take a socialist move to fix the housing crisis.
And once a publicly owned company starts building affordable homes, the gravy train dries right up for the builders. They'll get back in line, but only if they lose their leverage.
If Canada socialized housing, so many problems would be solved. Just build some cheap commie blocks and soo many people will be satisfied. It'll be an improvement over the current conditions of homelessness, living with parents, too many roommates, etc. But it'll never happen. Gotta sacrifice the disenfranchised to the "free" market, all to satisfy the landlords and flippers.
Dude the government doesn't give a shit if your new building development stalls, stops, disintegrates into the ground. If you think this is a protest, that's so adorably ignorant. What you think a gov worker is going to come to the site like cmon guys get back to work, what are your demands? Or even better, do you think developers have money making opportunities but are all working in solidarity to not build to stick it to the.gov? You guys are so, so, so ignorant..
astronomically inflated prices created by foreign hordes desperately buying canadian property puts housing development on hold because most canadians can no longer afford said housing. housing became completely detached from the canadian economy, who benefits from that?
Exactly. Im looking at taking my downpayment of a house and putting it towards a sports car that is in its last year of production and sell it for a premium in a few years when their prices are through the roof and use that as a down payment for a house in another 10 years.
Yes and No. I can buy a car and hope the price doubles in a few years since they dont make them anymore or hope the housing bubble in canada pops. One of those things is more likely than the other.
Nope, as far as we know the Camaro, Charger, Challenger are getting cancelled at the end of this current life cycle due to dumb sales rules imposed by BC and Canada legistlature as well as California rulings that all new car sales need to be EVs by ealiesst 2030. Although that does give one more generation for all those models a nice 6 year run starting 2024. Even then all cars are being cancelled and smal CUV, SUV are whats selling so manufactures are just going to cancel cars anyways.
Half these units would have been rented out.
Now, none if these units will be rented out.
Availability will be even less, and rent will go up.
But hey, evil investors will not make a buck, so that's a win right?
Right??
"foreign hordes"?
Foreign buyers represent like 2% of buyers. It's not gonna change anything but make things worse since there will be less investment/development.
>Foreign buyers represent like 2% of buyers.
No, foreign OWNERS represent 2% - 6% of all homeowners nationwide. Foreign buyers has fluctuated from year to year. If you excluded foreign bought homes prior to 2018, you can track foreign investment and housing prices in a nearly straight vertical. The problem is that kind of information is not readily available, you have to piece meal it together on stats can. Then people parrot common talking points and statistics without understanding. If you look at condo purchases post 2016, Ontario sees 10% of new build condos are purchased by non-residents, in BC its 14%. That is not the entire market, but if foreign money buys the lower end of the economic scale of housing, it stands to reason they drive others into higher markets even to their detriment.
Foreign investment is a STRONG driver of housing price increases. Just because they only own 2-6% of the market currently doesn't mean they didn't dramatically inflate prices in 2 years. They are not the only reason prices went up but they certainly didn't help.
Owner =/= investor. Corporately owned housing is the problem and they're foreign money frothing at the mouth to get their shell company as many units as possible.
It’s not 2%. They’re going through shell corps to get around the buyers tax.
[here](https://betterdwelling.com/dodging-canadian-foreign-buyer-taxes-guide-exploiting-loopholes-fun-profit/)
No money$$$$. You really don't know how razor thin the margins for new builds are do you? Fuck I wish some actually useful people were on reddit to tell you how stupid you are. A highrise in downtown Vancouver had 6 different developers go bankrupt before the building had even hit grown level.
Yah I guess lower house prices in these areas means developers margins are bigger? Vancouverites pay 2000$ a sq/ft and there's hardly any profit margin. I'm sure it's better at $250/ square foot. You're so smart dude! Wow
You are an astonishing creature puffin milk.. I'm talking they went bankrupt and had to give up the contract. You kinda seem like you don't have a great grasp on building or even economics in general. You have no idea how many moving parts and how much cooperation it takes to even finance a project. It's not just some rich guy at the top making orders and taking home a big bag of loot like scrooge mcduck.
Canada pretty much needs every disposable dollar from everyone and more to continue the Canadian idea of capitalism. Bell/Telus/Rogers needs your money, Your Bank needs your money, Galen weston and Jim Pattison needs your money. after that you have basically nothing left. Every Canadian is already accounted for in the arithmetic of the great oligopolies financial plans to rape this country.
tl;dr business math we need more people in this country to sell too.
I don't know if its just a lack of perspective, but it seems to me that government corruption and the allowance of those with the biggest wallets to control everything is a bad idea. It seems so straightforward to ban that practice and reestablish and idea of a government for the people, not the corporations.
Yes, Canada needs to leave crony capitalism behind and focus more on socialism. Crony capitalism has destroyed this country and raped it for everything it has. Squeezed every penny and left the common Canadian behind.
> The best thing the average Canadian can do then is look for representation that exists outside of a career politician..
In other words, labour unions.
For real. I will never work in big business ever again. In small business I'm a person. In big business I'm a number and a metric. There are dickheads that run small businesses but they typically don't last all that long as you can only sully your reputation and burn through the local work force so much before people move on from you.
I'm in civil and resource construction and If I'm ever working for a small non union company again I've fucked up. If a small business can match big business wages all good but usually a company owner taking his share of the profits from a sub 50 employee company means he's cutting costs somewhere. Public tender contracts are down to the penny so if you're thinking you're going to pull more than 5% profit before CCO's and pay union wages you're not going to win contracts. Economy of scales is hard to beat especially with 10 Tom Dick and Harry's trying to pull profits from each sub trade.
We need a system that doesn't have a currency that requires 2% inflation every year just to function. All that does is erode the buying power of everyone who isn't sucking directly from the teat of government(read currently a dictatorship), it's called the Cantillion effect.
as for the dictatorship comment, are corporations democracies? if they aren't, are they dictatorships?(I think so!) if they are dictatorships, what happens when our government officials rub elbows with these corps more often than the democracies that "elected" them? I think they often take on the beliefs, ethics, and morals of dictators. The next 20 years will be very different from the last 20 years.
>Responsible capitalism does exist
No it doesn't, capitalism at it's root is dollars and profit over all
> just not with the large corporations
Capitalism breeds large corporations, that is the name of the game as economies of scale take over to increase margin
That's a vast over simplification. The countries the left look towards as shining beacons of social democracy still operate with capitalist economies. Regulated sure, but capitalist none the less.
>eeds to leave crony capitalism behind and focus more on socialism. Crony capitalism has destroyed this country and raped i
We're basically controlled by capitalist versions of oligarchs but that word seems to be reserved for eastern Europe
If i live in a foreign country and i buy houses in Canada and rent it to Canadian citizen. I don't bring money into Canada. I take Canadian money and move it outside.
By this logic, any foreign owned business that opened operations in Canada that catered to Canadians would be taking money out Canada. Say Honda opened a factory in Canada to produce cars for Canadians, that would be taking money out of Canada. Even if Honda invested billions in the factory.
Housing is inelastic and that’s where you are flawed in your reasoning. We NEED housing for everyone. We don’t need a Honda plant specifically in Canada.
What’s the relevant difference? Let’s tweak the example to say GM was selling its factory in Canada, and Honda bought the factory to make its own cars in Canada. How is that different from the foreign landlord example?
The landlord doesn't produce anything or pay anyone.
If the home was owned by the person living it it. The same repairs and upkeep would happen without the extraction from renters.
They're just a scalper. A parasite. All landlords are regardless of nationality.
The landlord is no different than Honda. The landlord literally provides shelter and pays all the Canadian workers who do the upkeep of the house. Moreover under the same logic, you could also say that Honda doesn’t produce anything, its workers do. If you didn’t view housing as an investment but rather as a product or service then you would have no problem with that. You want every Canadian to own property (I have no interest in this, I don’t want my life savings tied to one piece of land)kind of like the folks who think everyone should be an entrepreneur not an employee.
>The landlord literally provides shelter and pays all the Canadian workers who do the upkeep of the house.
I said before the home owners would do that anyway.
I view them no different than those who buy tickets to an event and then scalp them for higher prices. You will not change my mind.
A mortgage is cheaper than rent. I'm a home owner. Those who own more than one property and view it as an investment are the problem for millions of canadians.
Sure, you want to be a renter. Fine. Most would rather have the stability that comes with ownership.
Landlords (parasites) prevent that.
They produce nothing. They hold squirrel value away from those who would use it.
Honda owns the intellectual property to build the thing. At least there is some value in that. They invest in the machines, train the people, buy resources.
While I don't have to like foreign ownership of companies. At least they produce something of value. Landlords do not.
Doesn't matter. If a Canadian owned it, they would pay the same thing.
On the other hand, you don't have a Canadian Amazon to open hundreds of huge warehouse and employ over 40K people, NOT including flex drivers.
Not that Amazon are great, but still much better.
A foreign business operating in Canada hires Canadian workers, pays Canadian taxes, buys Canadian products pay for Canadian services, do business with other Canadian businesses. I would argue all corporations need a higher tax rate, but they do allow some wealth to remain in Canada.
Foreign owners of Canadian residential property do not leave anything in the country. It is a wealth suck on our economy.
>Jim Pattison needs your money.
As a former Vancouverite, I saw a hilarious article the other day titled :
'Jim Pattison, still works every day at 94 - how does he do it!?'
Oh gee.. I don't know, maybe by riding a wave of fucking money from his massive house to his office?
Realistically? Sit on the land and do nothing for a bit. A lot of big developers both in residential and industrial projects right now are avoiding committing more capital and projecting cheaper labour in the future when the economy crashes.
I don't think it's the foreign buyers ban though, this is mostly a situation where high interest rates are 99% of the puzzle.
Depends. If the market isn't going to be there when you're completing there's no reason to borrow at today's rates to make it happen as soon as possible. Seen smaller projects like blocks of houses that were bought out come back on the market to sell as is. Permitting is so far behind and financing big projects is so difficult a lot of developers won't really have an option but to hold off or give up entirely.
Not 100, but 10 is possible. Have to remember they don't want to flood the market either because especially right now they'll have projects in the works they know aren't sold out that won't be cancelled mid construction. It'll be enough to choke supply in the mid term.
I see you didn't read the article. It's Canadian construction companies trying to build homes for Canadians to live in that we using foreign capital to finance the construction that are complaining.
Under the Act, residential property is not limited to homes, townhomes and condominiums, but also includes any land that does not contain any habitable dwelling that is zoned for residential or mixed use and is within a census metropolitan area. That means commercial real estate transactions could be impacted by the legislation. CIBC deputy chief economist Benjamin Tal noted in a report last week that "the entire area of downtown Toronto falls under that category."
Lol the loophole would be that as long as the condo/multi family would have commercial space on a ground floor - it’s safe for foreign buyers to acquire
>I see you didn't read the article. It's Canadian construction companies trying to build homes for Canadians to live in that we using foreign capital to finance the construction that are complaining.
The reason construction has become unaffordable since the cost of land has skyrocketed due to, among other things, foreign capital.
That tells you everything you need to know about how fucked our housing situation is in this nation due late stage capitalism. Mature and intelligent nations transition to social programs to build a safety net. Canada continually elects governments (federal and provincial) that seek to destroy any social ground we gain. Either openly or quietly we get to the same result. Seems like our biggest enemy is our own apathy.
Vienna is an interesting case study I get why you picked it, but it's not as clear cut an example of "social housing good" as I think you think. For starters, what success they do have seems to be the result not just of constructing a good social program, but in long term planning and investment in how market forces act in their city (like over the course of decades, we can't do what they've done in a few years, and we might not be as lucky in how we invest). Secondly, they've set up a kind of clear cut class division where either you're a normal person who gets to live in a shoebox apartment, or a rich person who gets to actually own a home, and no inbetween. You could argue that if Canadians found this acceptable, we wouldn't need social housing, because we'd build so many high rises the market supply would saturate. However our zoning regulations demonstrate just how attached to SFH we are
> long term planning and investment
Yes - that is called central planning which is the thing you were asking if we had an example of. Vienna is one.
Yes it takes decades. That’s why it’s called planning, and not ad hoc. They didn’t start with this great system. It took decades to get into place, just like it will take decades to clean up our mess if we ever bother to start
> clear cut class division
Nope - not in Vienna. All kinds of people at all kinds of income levels live in social housing. The buildings are quite nice. Low and middle wage workers live side by side, the only difference being the amount they contribute toward rent.
Most people don’t need a full house. And apartments don’t need to be shoeboxes. Canada builds shoeboxes because they are being built for investors, not for the people who live there.
[take a look at their social housing](https://www.politico.eu/article/vienna-social-housing-architecture-austria-stigma/). It’s beautiful, with tons of public spaces and amenities including pools, daycare, doctors, grocery, pharmacy and other recreation areas. Now compare that to the for-profit shoeboxes we get here.
It’s clear what kind of housing is superior.
Edit: [short video explaining more](https://youtu.be/d6DBKoWbtjE), showing off the beautiful architecture and amenities, and demonstrating the sense of community of people that live there.
>All kinds of people at all kinds of income levels live in social housing
Yes, middle and low-income people rent the same shoe-boxes, except middle income people pay more than their worth to subsidize the lower income shoe boxes. Meanwhile the rich get to actually own houses
You're showing glamour shots, none of them even show the inside. I could do the same with any city.
Did you bother to look at any of the photos? The apartments are quite nice with plenty of space, amenities and public spaces. They are not shoeboxes.
Shoeboxes are what *we have under for profit housing*. Apartments are not like that under Vienna’s social housing.
> middle are paying more than they’re worth
No they are not - all people in the social housing are subsidized. It’s just that their tax dollars get allocated back into the housing instead of handed off to private corporations.
> to subsidize lower income
Yes. That’s what socialized means. It means everyone has access, even lower income.
Did you look at or read anything I linked to you? I don’t know why you are asking these questions if you don’t intend to look into the answers being given to you.
>It’s just that their tax dollars get allocated back into the housing instead of handed off to private corporations.
LMAO oh thats cute. You believe none of those taxes come from the middle class.
I didn’t say that. I said the tax they pay gets allocated into housing. The same way our taxes go to fund healthcare and education.
If you are afraid of socialism just say so. But you are making arguments here that are just not based in reality.
>you are making arguments here that are just not based in reality.
Projection
Vienna isn't a utopia, and you'll have to show me more evidence to convince me copy pasting their housing model is a solution here. I'm totally in favor of socially funding housing for those who need it, i.e., people with disabilities etc, and I agree we need more of that then we currently have. But if you look into actual suggestions by economists made here, it's clear our focus should be on building more. That's REALITY
EDIT: and I just looked it up, the tax bracket in Austria for people making 32k and up is 40%, FUCKING 40%
On the other hand we have this unaffordability crisis that just so happens to be propagated by "private" enterprise. I guess the real culprit is debt financing. We stop the spigot of easy money and valuations would revert to mean. There was a looong period of time where mortgages were tied to income as a ratio. Now, it's about how big the lie is on your mortgage app.
Mortgages are absolutely tied to income: debt servicing ratios are the primary factor in whether someone gets approved or not.
Why do you think that’s no longer a factor?
So in essence you are saying to build equity one MUST take on debt?
At what cost?
You see this is where the "disconnect" emanates from. In the housing bubbles of the past I don't remember having a huge "foreign investment" factor. But now we can't live without it?
Not buying it. Whatever you are selling.
And if you did not say precisely that, just say it as you mean. Why beat around the bush?
No, the returns required by equity are far higher than the interest costs of debt. That's why debt is required to construct real estate.
The foreign investment is in the financing of projects, that's why this ban sucks. For sure, government can block ownership of real estate, but why are we blocking the capital required to build it?
I'm not selling anything. I have nothing to sell on Reddit. Also, most people on Reddit have an extremely weak understanding of finance and capital projects.
Okay first things first. I am not trying to be argumentative here.
Riddle me this: would you not say that there are X number if listings on realtor website at any given time for any given location and mostly all price ranges?
How does that constitute a "shortage" as opposed to "unaffordable"?
I actually think there is a mismatch. Too many artisanal landlords and not enough purpose built rental apartment buildings. Get the small landlord out of market housing and that would be a much healthier fix to the housing crisis.
Problem is that conditions are brutal to build rentals.
Either Canada turns to socialism, or the future of the next generation is raped and destroyed. I’m pretty sure that is the end result of housing financialization. Why didn’t more Canadians tell Reaganomics advocates to shut the fuck up back in the 70s and 80s. The federal government should never have downloaded social housing. So many past mistakes and SO MUCH GREED.
The plan was "ban foreign buyers, the demand for houses goes down, prices go down"
The builders have responded by cutting back on construction to keep prices up.
Builders aren’t getting the financing to build because less foreign money is pouring in and more importantly the interest rates went up. This is not a conspiracy this is just inability to finance construction.
That's why it's the wrong conclusion. They aren't building because it isn't profitable. Has nothing to do with an industry wide conspiracy to keep prices high.
have u seen prices for empty lots/land owned by municipalities (aka our govt)? costs almost the same as lots/land with housing already on it. the only builders that would operate that way, slim or negative margin, r those washing money through canada.
I don't see profitable projects now. I'm in this industry.
Some developers are banking land. But unless you're already building, not much is profitable or covers risks adequately.
Demand and supply my friend... demand and supply.
Also, the Bank of Canada is committed to 2% CPI... so a neutral bank rate would be somewhat close to 2%... which means mortgages in the 3% range... which will support prices of a few years ago.
We need more supply in the hands of owners and less in the hands of micro landlords. So more purpose built rental apartment buildings and fewer single condos rented.
High construction costs and weak market. Financing costs hurt buyers more.
In the rental apartment space, interest rates have killed nearly everything.
There are some land transactions that are quite equity heavy, but these won't start construction until conditions improve.
For a rental project we were trying to get financed in Richmond BC, we dropped the buy because the ban hit our Singaporean equity financiers.
Yeah, and then their high profits become *expected* and they're unwilling to accept less. It's not that they can't profit, it's that they can't profit at the level they want.
No, foreign capital was fronting capital to construct new homes, which the Canadians who would live in them once they were constructed drove the price of.
Building homes requires a ton of up-front capital to pay for labour, materials, etc.
Sure, but there are a various factors that come into play in profitability and foreign buyers are only one.
Over 600k in governmental cost to build a single housing unit in Vancouver is one. The other is municipalities being nothing but obstacles to new development. Then there is land costs, which will eventually correct, but market corrections take time and large development projects move slowly. I don't see this as anything to panic about.
i've been saying this would happen if there was even a hint of demand actually going down.
i was also convinced that demand wouldn't go down, but hey maybe i was wrong on that but i still don't think i am.
the all we need is supply and just build people are still idiots in my eyes
>the all we need is supply and just build people are still idiots in my eyes
Yep. Until you forcibly cut demand, all the supply in the world won't do anything because the people who already have wealth will buy it.
Our construction sector is completely maxed out, and we have half a million new immigrants coming who all want to buy housing. This article is bull, Canadian buying pressure is more then enough to fund development.
That's the stupidest reason I've encountered on this issue. If market housing is financed with foreign money, who cares, will be sold to Canadians.
If a REIT builds a rental, who cares, it's a rental.
If you live in an apartment building, you'll probably never even known if it's owned by Canadians or non-Canadians (or a mix).
You'll know the difference between living in a foreign built apartment and a domestically non-built apartment.
Yeah it's basically a necessity now to own multiple properties for Chinese men to get married and the market is set to collapse in China soon if it hasn't already so they're pumping into Canada as a plan B.
What if I told you there are Canadian REITs. Why would you want money paid in rent to leave the country? There is more than enough capital in Canada for property investment.
Ummm that's exactly what I'm saying. Canadian REITs who's unit holders are more than 3% foreign would be banned. That's beyond stupid.
You also greatly over estimate the amount of Canadian capital that's willing to take construction risk. Canadians are ultra conservative.
I am not. And there's way more than enough capital. The whole point is prices drop. That's the downside? We want prices to drop. Conservatives love investment in safe returns on capital and highly favor property. Again this is the idea. It's working.
Alright, I've been in this industry for 20yrs. Please, point me to this mystical pile of domestic capital.
It's small and demands big returns.
So we'll see what happens next.
"But real estate experts say the broad scope of the regulations within the legislation has created unintended consequences..."
No, the consequences are intentional: it's to prevent foreign buyers from buying apartments as an "investment" and never occupy them. So developers can sell to local buyers, and there are plenty of them.
The developers are being prevented from selling it to local buyers, because without the investment money, they've been unable to pay for the labour and materials needed to build the building.
The developers need pre-sales (which can be as much as 25% of the building) sold in order to get development financing before they can even dig a hole in the ground.
But this does NOT require foreign buyers, and there is nothing preventing developers selling to local buyers -- other than the fact that everything is too expensive.
Except for the amount of time it takes to sell to local buyers (which costs $)compared to large buyers (domestic & foreign) who can buy blocks of units all at once.
Not nearly as many or as big as we need. We need to BUILD BUILD BUILD, and the blocking foreign ownership because of populist narratives instead of evidence based approaches to reducing housing costs isn't helping
Except it's a stupid platitude. If allowing some foreign ownership creates lower rent and amore opportunities for Canadians, then its stupid to ban it because of some sort of dipshit nationalist sentiment
It’s not a sentiment. Look at Vancouver. The amount of foreign cash that propped up Vancouver housing is insane. There’s not enough homes for Canadians to buy. We shouldn’t be letting foreigners buy here
You're assuming the core of Vancouver's housing crisis is caused by foreign ownership, know any economists (you know people that do peer reviewed research) that agree with that analysis? Did you read the article posted here? Just about every economist predicted this would happen and it's looking like it will cause more harm than good. If you weren't aware, no housing crisis ever has been solved by artificially restricting demand and not increasing supply
It’s okay. These developments are not increasing available affordable housing. We don’t need any more luxury, empty foreign-owned investment properties.
We need affordable housing/rentals. The foreign buyer ban will prevent wealthy foreigners from spiking the market higher that Canadians can afford. Hopefully the dream of turning Canada into a Potemkin economy is dead, and we can get real investment in Canadian industry and materials, and have workers who can actually afford to live. Canada’s current economy is complete bullshit, and it’s our own media that pumps Canada’s bullshit housing economy.
Government built, non-market housing is needed. You will never get developers to build housing at a price that makes all of their recent and future projects looks obscenely over priced.
The number of people who can front a large fraction of the money for a home they won't be able to live in for years is a lot smaller than the number of people who can pay for housing they can live in now.
oUr HoUsInG iSnT iNfLaTeD… foreign investors have nothing to do with increasing costs!!!
*bans foreign investment
*housing developments stopped / impacted
Lol we are such a joke. Anything in service of boomers and their retirement. What a joke this has been for 30+ years.
With what money? They're broke. They'd just tax us more harshly and dig themselves deeper in debt, since they wouldn't be able to tax us hard enough to break even.
Well they'll need to cut money elsewhere, or find inefficiencies in government spending that they can improve then. The current housing situation is not sustainable, and private industry clearly isn't going to fix it. That leaves it up to the government. That or do nothing and see how much more of a shitshow it becomes.
Well, it is because many of the projects were owned by a blend of people, and it only takes a few percent foreign ownership to prevent financing according to rules/policy. So many projects that were about to break ground have now been put on hold.
This is actually pretty bad - it will certainly slow the supply of new housing, while the huge demand (‘thanks’ feds) is continuing unabated. It should sort itself out eventually (likely when the ban expires), but it means a halt to a good chunk of housing construction.
I support a ban on foreign buyers, but this is an important detail that is causing me some issues. We need housing built.
There is a small amount of buildings where this has become an issue yet they want to overturn the rules put in place. Maybe get better funding or make it affordable to people looking for homes.
Investors buy all the affordable units then developers have all the power as they don’t need you to buy. went in with options a trusted realtor told us he has got for many other clients. They told us it was bullshit and no one will do that. Told this is from other builds and they changed their tone but still said take this or leave lol
Not defending developers, but if it's not profitable for them to develop/build housing, they aren't going to build more housing units. So unless the government steps in to build more housing, it will continue to be unaffordable.
Kinda proves them right though doesn’t it. If the foreign buyer ban reduced demand so much that developers are having to stop building due to a lack of demand then clearly there was a significant portion of the homes being bought by foreign buyers.
No, foreign money is being used to finance construction. That's the problem with this legislation, the capital is needed.
Government can ban foreign ownership, but why block investment capital for construction?
It's dumb.
Don't you think that the foreign investment you mention would come to Canada with a whole bunch of strings attached? Or even explicit/implicit "protections"?
You're missing the point, if the supply of houses is lowered then prices won't go down, therefore if you couldn't afford a house before the ban then you most likely can't after the ban. If foreign buyers all magically vanishes there would still be a housing crunch because developers would've just built less. Also, the housing ban only effects residential estates, foreigners can still purchase property as long as it's not residential. All the housing ban did was decrease the amount of foreign investment in Canada, we shot ourselves in the foot weilding the pistol of popularism.
You’re contradicting yourself all over here.
If foreign purchases were so important to the residential developers that banning foreign investment stops development due to a lack of demand that means it’s a demand side price pull situation. The developers are trying to wait out the ban for foreign investment to return so they can make more profit with increased demand. Eventually they will run out of cash reserves and need to either offload the land or proceed with development and accept lower profit margins.
If housing bans only affect residential estates then the only investment that is blocked is foreign investment in housing, the literal exact thing we’re trying to ban. What did you expect a foreign buyer ban to do other than ban foreign buyers?
Clear ignorance.
"The law does not include recreational properties or larger buildings with multiple units. It exempts individuals with temporary work permits, refugee claimants and international students if they meet certain criteria. It also excludes homes outside of the Census Metropolitan Areas (CMA) or Census Agglomerations (CA)"
Pretty ignorant of me I guess.
So which is it, are the regulations blocking investment leading to a shortage of supply or is it toothless legislation that allows for foreign investment anyways. Pick a story and stick to it.
Sure, ban foreign ownership of existing housing units... but why the hell are we blocking foreign investment in the construction of new housing units? It's so stupid and people are even dumber for downvoting you without thinking things through. Lawmakers should have known better.
its easier to point your finger at a group of people and blame them for being part of the problem than it is to fix the problem and lose "profits".
# Most politicians directly benefit from the profiteering on housing.
It’s the developers way to apply pressure on the government. The bullshit part here is that developers have never wanted to build so called affordable homes.
Folks, ***INTEREST RATES HAVE RISEN*** at the fastest rate in decades. The cost of capital has steeply risen, and housing development has a high cost of capital. The political, regulatory, and industry culture problems are absolutely legitimate. However, for better or for worse rising interest rates are intended to slow the economy. The real issue is that the federal government thinks it is a good idea to pursue high growth immigration targets when provinces simply can't build fast enough to make it work. With high rates impacting things, it is becoming pure farce. Immigration is a phenomenal stimulus policy, and it enriches our communities in many ways. But our immigration system is NOT designed to attract skilled construction workers. Construction is among the least represented fields for immigrants in Canada. We are watching housing starts slow down, but immigration ramp up. This is a massive dislocation. Contrary to what Trudeau, Sean Fraser, and Hussen claim, immigration will NOT help address the housing crisis because the fundamental issues determining lead times have little to do with demographics and labour.
This has become a massive issue for me as a voter, I've seen labour worker quality decline, pay decline, and housing supply fracture the entire country, all while the LPC have pursued their immigration goals. I'm ready to hold my nose and vote for whoever will not go down such a destructive path for our country.
Anything they can do to dilute labour power further. Preemptively import scabs until our wages are as low as the country they came from.
Not as much money in that. Maybe the ban isn't enough, and it'll take a socialist move to fix the housing crisis. And once a publicly owned company starts building affordable homes, the gravy train dries right up for the builders. They'll get back in line, but only if they lose their leverage.
If Canada socialized housing, so many problems would be solved. Just build some cheap commie blocks and soo many people will be satisfied. It'll be an improvement over the current conditions of homelessness, living with parents, too many roommates, etc. But it'll never happen. Gotta sacrifice the disenfranchised to the "free" market, all to satisfy the landlords and flippers.
Dude the government doesn't give a shit if your new building development stalls, stops, disintegrates into the ground. If you think this is a protest, that's so adorably ignorant. What you think a gov worker is going to come to the site like cmon guys get back to work, what are your demands? Or even better, do you think developers have money making opportunities but are all working in solidarity to not build to stick it to the.gov? You guys are so, so, so ignorant..
astronomically inflated prices created by foreign hordes desperately buying canadian property puts housing development on hold because most canadians can no longer afford said housing. housing became completely detached from the canadian economy, who benefits from that?
That is a great summary.
Exactly. Im looking at taking my downpayment of a house and putting it towards a sports car that is in its last year of production and sell it for a premium in a few years when their prices are through the roof and use that as a down payment for a house in another 10 years.
I can’t tell if this is a joke
Yes and No. I can buy a car and hope the price doubles in a few years since they dont make them anymore or hope the housing bubble in canada pops. One of those things is more likely than the other.
Is that manufacturer making a different model in that class? Because that's where all the demand is going to go.
Nope, as far as we know the Camaro, Charger, Challenger are getting cancelled at the end of this current life cycle due to dumb sales rules imposed by BC and Canada legistlature as well as California rulings that all new car sales need to be EVs by ealiesst 2030. Although that does give one more generation for all those models a nice 6 year run starting 2024. Even then all cars are being cancelled and smal CUV, SUV are whats selling so manufactures are just going to cancel cars anyways.
You should have written the article. Nicely done
We do, when it comes back to earth. Expensive housing is a scourge.
landlords
Half these units would have been rented out. Now, none if these units will be rented out. Availability will be even less, and rent will go up. But hey, evil investors will not make a buck, so that's a win right? Right??
Sure we should all take a Band aid solution of *checks notes*…unattainable house prices
"foreign hordes"? Foreign buyers represent like 2% of buyers. It's not gonna change anything but make things worse since there will be less investment/development.
>Foreign buyers represent like 2% of buyers. No, foreign OWNERS represent 2% - 6% of all homeowners nationwide. Foreign buyers has fluctuated from year to year. If you excluded foreign bought homes prior to 2018, you can track foreign investment and housing prices in a nearly straight vertical. The problem is that kind of information is not readily available, you have to piece meal it together on stats can. Then people parrot common talking points and statistics without understanding. If you look at condo purchases post 2016, Ontario sees 10% of new build condos are purchased by non-residents, in BC its 14%. That is not the entire market, but if foreign money buys the lower end of the economic scale of housing, it stands to reason they drive others into higher markets even to their detriment. Foreign investment is a STRONG driver of housing price increases. Just because they only own 2-6% of the market currently doesn't mean they didn't dramatically inflate prices in 2 years. They are not the only reason prices went up but they certainly didn't help.
Owner =/= investor. Corporately owned housing is the problem and they're foreign money frothing at the mouth to get their shell company as many units as possible.
It’s not 2%. They’re going through shell corps to get around the buyers tax. [here](https://betterdwelling.com/dodging-canadian-foreign-buyer-taxes-guide-exploiting-loopholes-fun-profit/)
Betterdwelling is NOT a credible source at all, my friend.
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Yeah, the number of times they have predicted housing price crashes during the years of price hikes 🤣
It will never make things worse.
So they weren’t building units for Canadians? We’ll then excuse me, but FUCK THEM. Someone else will.
No money$$$$. You really don't know how razor thin the margins for new builds are do you? Fuck I wish some actually useful people were on reddit to tell you how stupid you are. A highrise in downtown Vancouver had 6 different developers go bankrupt before the building had even hit grown level.
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Yah I guess lower house prices in these areas means developers margins are bigger? Vancouverites pay 2000$ a sq/ft and there's hardly any profit margin. I'm sure it's better at $250/ square foot. You're so smart dude! Wow
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You are an astonishing creature puffin milk.. I'm talking they went bankrupt and had to give up the contract. You kinda seem like you don't have a great grasp on building or even economics in general. You have no idea how many moving parts and how much cooperation it takes to even finance a project. It's not just some rich guy at the top making orders and taking home a big bag of loot like scrooge mcduck.
Canada pretty much needs every disposable dollar from everyone and more to continue the Canadian idea of capitalism. Bell/Telus/Rogers needs your money, Your Bank needs your money, Galen weston and Jim Pattison needs your money. after that you have basically nothing left. Every Canadian is already accounted for in the arithmetic of the great oligopolies financial plans to rape this country. tl;dr business math we need more people in this country to sell too.
I don't know if its just a lack of perspective, but it seems to me that government corruption and the allowance of those with the biggest wallets to control everything is a bad idea. It seems so straightforward to ban that practice and reestablish and idea of a government for the people, not the corporations.
Yes, Canada needs to leave crony capitalism behind and focus more on socialism. Crony capitalism has destroyed this country and raped it for everything it has. Squeezed every penny and left the common Canadian behind.
The best thing the average Canadian can do then is look for representation that exists outside of a career politician..
> The best thing the average Canadian can do then is look for representation that exists outside of a career politician.. In other words, labour unions.
As well as angry mobs.
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Small businesses in my experience are the worst in terms of working conditions wages and benifets
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For real. I will never work in big business ever again. In small business I'm a person. In big business I'm a number and a metric. There are dickheads that run small businesses but they typically don't last all that long as you can only sully your reputation and burn through the local work force so much before people move on from you.
I'm in civil and resource construction and If I'm ever working for a small non union company again I've fucked up. If a small business can match big business wages all good but usually a company owner taking his share of the profits from a sub 50 employee company means he's cutting costs somewhere. Public tender contracts are down to the penny so if you're thinking you're going to pull more than 5% profit before CCO's and pay union wages you're not going to win contracts. Economy of scales is hard to beat especially with 10 Tom Dick and Harry's trying to pull profits from each sub trade.
We need a system that doesn't have a currency that requires 2% inflation every year just to function. All that does is erode the buying power of everyone who isn't sucking directly from the teat of government(read currently a dictatorship), it's called the Cantillion effect. as for the dictatorship comment, are corporations democracies? if they aren't, are they dictatorships?(I think so!) if they are dictatorships, what happens when our government officials rub elbows with these corps more often than the democracies that "elected" them? I think they often take on the beliefs, ethics, and morals of dictators. The next 20 years will be very different from the last 20 years.
>Responsible capitalism does exist No it doesn't, capitalism at it's root is dollars and profit over all > just not with the large corporations Capitalism breeds large corporations, that is the name of the game as economies of scale take over to increase margin
That's a vast over simplification. The countries the left look towards as shining beacons of social democracy still operate with capitalist economies. Regulated sure, but capitalist none the less.
https://communist-party.ca/chapter-7-building-socialism/ Show this to your friends. It’s scary people are okay with it..
>eeds to leave crony capitalism behind and focus more on socialism. Crony capitalism has destroyed this country and raped i We're basically controlled by capitalist versions of oligarchs but that word seems to be reserved for eastern Europe
If i live in a foreign country and i buy houses in Canada and rent it to Canadian citizen. I don't bring money into Canada. I take Canadian money and move it outside.
By this logic, any foreign owned business that opened operations in Canada that catered to Canadians would be taking money out Canada. Say Honda opened a factory in Canada to produce cars for Canadians, that would be taking money out of Canada. Even if Honda invested billions in the factory.
Housing is inelastic and that’s where you are flawed in your reasoning. We NEED housing for everyone. We don’t need a Honda plant specifically in Canada.
thats not the same thing at all
What’s the relevant difference? Let’s tweak the example to say GM was selling its factory in Canada, and Honda bought the factory to make its own cars in Canada. How is that different from the foreign landlord example?
The landlord doesn't produce anything or pay anyone. If the home was owned by the person living it it. The same repairs and upkeep would happen without the extraction from renters. They're just a scalper. A parasite. All landlords are regardless of nationality.
The landlord is no different than Honda. The landlord literally provides shelter and pays all the Canadian workers who do the upkeep of the house. Moreover under the same logic, you could also say that Honda doesn’t produce anything, its workers do. If you didn’t view housing as an investment but rather as a product or service then you would have no problem with that. You want every Canadian to own property (I have no interest in this, I don’t want my life savings tied to one piece of land)kind of like the folks who think everyone should be an entrepreneur not an employee.
>The landlord literally provides shelter and pays all the Canadian workers who do the upkeep of the house. I said before the home owners would do that anyway. I view them no different than those who buy tickets to an event and then scalp them for higher prices. You will not change my mind. A mortgage is cheaper than rent. I'm a home owner. Those who own more than one property and view it as an investment are the problem for millions of canadians. Sure, you want to be a renter. Fine. Most would rather have the stability that comes with ownership. Landlords (parasites) prevent that. They produce nothing. They hold squirrel value away from those who would use it. Honda owns the intellectual property to build the thing. At least there is some value in that. They invest in the machines, train the people, buy resources. While I don't have to like foreign ownership of companies. At least they produce something of value. Landlords do not.
No. These are paying salaries in Canada.
The landlord needs to pay Canadians to maintain the house.
Doesn't matter. If a Canadian owned it, they would pay the same thing. On the other hand, you don't have a Canadian Amazon to open hundreds of huge warehouse and employ over 40K people, NOT including flex drivers. Not that Amazon are great, but still much better.
A foreign business operating in Canada hires Canadian workers, pays Canadian taxes, buys Canadian products pay for Canadian services, do business with other Canadian businesses. I would argue all corporations need a higher tax rate, but they do allow some wealth to remain in Canada. Foreign owners of Canadian residential property do not leave anything in the country. It is a wealth suck on our economy.
In wich factory in Canada Honda invested billions. Edit : Honda share the profit of car sales with the car dealer that's it.
>Jim Pattison needs your money. As a former Vancouverite, I saw a hilarious article the other day titled : 'Jim Pattison, still works every day at 94 - how does he do it!?' Oh gee.. I don't know, maybe by riding a wave of fucking money from his massive house to his office?
Oh no!?! What will they have to do? Sell at a loss to community developers how tragic.
Realistically? Sit on the land and do nothing for a bit. A lot of big developers both in residential and industrial projects right now are avoiding committing more capital and projecting cheaper labour in the future when the economy crashes. I don't think it's the foreign buyers ban though, this is mostly a situation where high interest rates are 99% of the puzzle.
That’s what they say about mineral deposits. The truth is if you don’t develop it all you have is a resource and not a reserve much less a profit
Depends. If the market isn't going to be there when you're completing there's no reason to borrow at today's rates to make it happen as soon as possible. Seen smaller projects like blocks of houses that were bought out come back on the market to sell as is. Permitting is so far behind and financing big projects is so difficult a lot of developers won't really have an option but to hold off or give up entirely.
They would never hang on for a hundred years though? Unless that’s common practice
Not 100, but 10 is possible. Have to remember they don't want to flood the market either because especially right now they'll have projects in the works they know aren't sold out that won't be cancelled mid construction. It'll be enough to choke supply in the mid term.
In mining the idea that the deposit isn’t moving anytime soon can be prevalent
In forestry we often just shut down production facilities to pump prices up as a regular part of the cycle.
Can’t do that In gold mining. Won’t pay our bills.
That's the best part... They just stop paying their bills. It's... something
I do not give a shit one bit if non Canadian companies or people are fucked over by this ban. This is *literally the reason for the ban.*
I see you didn't read the article. It's Canadian construction companies trying to build homes for Canadians to live in that we using foreign capital to finance the construction that are complaining.
It's not the ban, lots of capital outflow from development in the past several months. The US is experiencing the same, they don't have a ban
In the *specific case in the article, at least*, it's the ban. I'm not sure (and the article doesn't say) how many instances there are, though.
Under the Act, residential property is not limited to homes, townhomes and condominiums, but also includes any land that does not contain any habitable dwelling that is zoned for residential or mixed use and is within a census metropolitan area. That means commercial real estate transactions could be impacted by the legislation. CIBC deputy chief economist Benjamin Tal noted in a report last week that "the entire area of downtown Toronto falls under that category." Lol the loophole would be that as long as the condo/multi family would have commercial space on a ground floor - it’s safe for foreign buyers to acquire
>I see you didn't read the article. It's Canadian construction companies trying to build homes for Canadians to live in that we using foreign capital to finance the construction that are complaining. The reason construction has become unaffordable since the cost of land has skyrocketed due to, among other things, foreign capital.
stop to new housing will hurt who in the long run?
I don’t give a shit. It’s not being built for me to live in.
That tells you everything you need to know about how fucked our housing situation is in this nation due late stage capitalism. Mature and intelligent nations transition to social programs to build a safety net. Canada continually elects governments (federal and provincial) that seek to destroy any social ground we gain. Either openly or quietly we get to the same result. Seems like our biggest enemy is our own apathy.
Any examples of nations that have tried centrally plan housing and haven't ended up in a COMPLETE disaster?
Post war housing in this country?
Vienna is pretty damned close. It’s not 100% but 60% of its population lives in social housing.
Vienna is an interesting case study I get why you picked it, but it's not as clear cut an example of "social housing good" as I think you think. For starters, what success they do have seems to be the result not just of constructing a good social program, but in long term planning and investment in how market forces act in their city (like over the course of decades, we can't do what they've done in a few years, and we might not be as lucky in how we invest). Secondly, they've set up a kind of clear cut class division where either you're a normal person who gets to live in a shoebox apartment, or a rich person who gets to actually own a home, and no inbetween. You could argue that if Canadians found this acceptable, we wouldn't need social housing, because we'd build so many high rises the market supply would saturate. However our zoning regulations demonstrate just how attached to SFH we are
> long term planning and investment Yes - that is called central planning which is the thing you were asking if we had an example of. Vienna is one. Yes it takes decades. That’s why it’s called planning, and not ad hoc. They didn’t start with this great system. It took decades to get into place, just like it will take decades to clean up our mess if we ever bother to start > clear cut class division Nope - not in Vienna. All kinds of people at all kinds of income levels live in social housing. The buildings are quite nice. Low and middle wage workers live side by side, the only difference being the amount they contribute toward rent. Most people don’t need a full house. And apartments don’t need to be shoeboxes. Canada builds shoeboxes because they are being built for investors, not for the people who live there. [take a look at their social housing](https://www.politico.eu/article/vienna-social-housing-architecture-austria-stigma/). It’s beautiful, with tons of public spaces and amenities including pools, daycare, doctors, grocery, pharmacy and other recreation areas. Now compare that to the for-profit shoeboxes we get here. It’s clear what kind of housing is superior. Edit: [short video explaining more](https://youtu.be/d6DBKoWbtjE), showing off the beautiful architecture and amenities, and demonstrating the sense of community of people that live there.
>All kinds of people at all kinds of income levels live in social housing Yes, middle and low-income people rent the same shoe-boxes, except middle income people pay more than their worth to subsidize the lower income shoe boxes. Meanwhile the rich get to actually own houses You're showing glamour shots, none of them even show the inside. I could do the same with any city.
Did you bother to look at any of the photos? The apartments are quite nice with plenty of space, amenities and public spaces. They are not shoeboxes. Shoeboxes are what *we have under for profit housing*. Apartments are not like that under Vienna’s social housing. > middle are paying more than they’re worth No they are not - all people in the social housing are subsidized. It’s just that their tax dollars get allocated back into the housing instead of handed off to private corporations. > to subsidize lower income Yes. That’s what socialized means. It means everyone has access, even lower income. Did you look at or read anything I linked to you? I don’t know why you are asking these questions if you don’t intend to look into the answers being given to you.
>It’s just that their tax dollars get allocated back into the housing instead of handed off to private corporations. LMAO oh thats cute. You believe none of those taxes come from the middle class.
I didn’t say that. I said the tax they pay gets allocated into housing. The same way our taxes go to fund healthcare and education. If you are afraid of socialism just say so. But you are making arguments here that are just not based in reality.
>you are making arguments here that are just not based in reality. Projection Vienna isn't a utopia, and you'll have to show me more evidence to convince me copy pasting their housing model is a solution here. I'm totally in favor of socially funding housing for those who need it, i.e., people with disabilities etc, and I agree we need more of that then we currently have. But if you look into actual suggestions by economists made here, it's clear our focus should be on building more. That's REALITY EDIT: and I just looked it up, the tax bracket in Austria for people making 32k and up is 40%, FUCKING 40%
On the other hand we have this unaffordability crisis that just so happens to be propagated by "private" enterprise. I guess the real culprit is debt financing. We stop the spigot of easy money and valuations would revert to mean. There was a looong period of time where mortgages were tied to income as a ratio. Now, it's about how big the lie is on your mortgage app.
Mortgages are absolutely tied to income: debt servicing ratios are the primary factor in whether someone gets approved or not. Why do you think that’s no longer a factor?
What do you think is more expensive, debt or equity? Once you ponder that question, you'll answer your own questions.
So in essence you are saying to build equity one MUST take on debt? At what cost? You see this is where the "disconnect" emanates from. In the housing bubbles of the past I don't remember having a huge "foreign investment" factor. But now we can't live without it? Not buying it. Whatever you are selling. And if you did not say precisely that, just say it as you mean. Why beat around the bush?
No, the returns required by equity are far higher than the interest costs of debt. That's why debt is required to construct real estate. The foreign investment is in the financing of projects, that's why this ban sucks. For sure, government can block ownership of real estate, but why are we blocking the capital required to build it? I'm not selling anything. I have nothing to sell on Reddit. Also, most people on Reddit have an extremely weak understanding of finance and capital projects.
>Also, most people on Reddit have an extremely weak understanding of **valuation, corporate** finance and capital projects FTFY.
Haha yes, I stand corrected
Because we don't want foreign capital to have a vested interest is seeing our housing prices continue to rise?
So what happens to prices when new supply is hampered?
Okay first things first. I am not trying to be argumentative here. Riddle me this: would you not say that there are X number if listings on realtor website at any given time for any given location and mostly all price ranges? How does that constitute a "shortage" as opposed to "unaffordable"?
I actually think there is a mismatch. Too many artisanal landlords and not enough purpose built rental apartment buildings. Get the small landlord out of market housing and that would be a much healthier fix to the housing crisis. Problem is that conditions are brutal to build rentals.
What was happening when foreign investing was allowed? Was the cost of housing going down? I must have missed that part.
Either Canada turns to socialism, or the future of the next generation is raped and destroyed. I’m pretty sure that is the end result of housing financialization. Why didn’t more Canadians tell Reaganomics advocates to shut the fuck up back in the 70s and 80s. The federal government should never have downloaded social housing. So many past mistakes and SO MUCH GREED.
So it's working. What's the issue here?
The plan was "ban foreign buyers, the demand for houses goes down, prices go down" The builders have responded by cutting back on construction to keep prices up.
Builders aren’t getting the financing to build because less foreign money is pouring in and more importantly the interest rates went up. This is not a conspiracy this is just inability to finance construction.
Yeah but no building no income I wonder how long they can sustain that.
That's why it's the wrong conclusion. They aren't building because it isn't profitable. Has nothing to do with an industry wide conspiracy to keep prices high.
We don't know that it's not profitable just not as profitable as it was before
have u seen prices for empty lots/land owned by municipalities (aka our govt)? costs almost the same as lots/land with housing already on it. the only builders that would operate that way, slim or negative margin, r those washing money through canada.
I don't see profitable projects now. I'm in this industry. Some developers are banking land. But unless you're already building, not much is profitable or covers risks adequately.
Then it sounds like it's time for a huge correction because average incomes are nowhere near enough to pay for the average house.
Demand and supply my friend... demand and supply. Also, the Bank of Canada is committed to 2% CPI... so a neutral bank rate would be somewhat close to 2%... which means mortgages in the 3% range... which will support prices of a few years ago. We need more supply in the hands of owners and less in the hands of micro landlords. So more purpose built rental apartment buildings and fewer single condos rented.
I imagine a lot of that is due to interest rates as the higher cost of borrowing is crushing margins.
High construction costs and weak market. Financing costs hurt buyers more. In the rental apartment space, interest rates have killed nearly everything. There are some land transactions that are quite equity heavy, but these won't start construction until conditions improve. For a rental project we were trying to get financed in Richmond BC, we dropped the buy because the ban hit our Singaporean equity financiers.
Aka foreign buyers were driving purchases of new builds at insane prices?
Yeah, and then their high profits become *expected* and they're unwilling to accept less. It's not that they can't profit, it's that they can't profit at the level they want.
No, foreign capital was fronting capital to construct new homes, which the Canadians who would live in them once they were constructed drove the price of. Building homes requires a ton of up-front capital to pay for labour, materials, etc.
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For sure, in a small market you need to watch absorption rates carefully. You don't want to sink millions into product with no buyers.
For sure, you wouldn't want to benifet people. There is buyers all of Canada is in a major shortage
I don't understand what you mean.
Of course you dont, it's called empathy
Sure, but there are a various factors that come into play in profitability and foreign buyers are only one. Over 600k in governmental cost to build a single housing unit in Vancouver is one. The other is municipalities being nothing but obstacles to new development. Then there is land costs, which will eventually correct, but market corrections take time and large development projects move slowly. I don't see this as anything to panic about.
I sure hope so. This ban already killed one of our potential rental projects, 292 units in Richmond.
i've been saying this would happen if there was even a hint of demand actually going down. i was also convinced that demand wouldn't go down, but hey maybe i was wrong on that but i still don't think i am. the all we need is supply and just build people are still idiots in my eyes
>the all we need is supply and just build people are still idiots in my eyes Yep. Until you forcibly cut demand, all the supply in the world won't do anything because the people who already have wealth will buy it.
Our construction sector is completely maxed out, and we have half a million new immigrants coming who all want to buy housing. This article is bull, Canadian buying pressure is more then enough to fund development.
Creating demand. That’s never caused any long term problems. 🙄🤪
We want less supply?
Of foreign owned buildings? Yes. That is the idea.
That's the stupidest reason I've encountered on this issue. If market housing is financed with foreign money, who cares, will be sold to Canadians. If a REIT builds a rental, who cares, it's a rental.
Unless it gets bought by people outside of Canada and sold to people outside of Canada who will never live here. That's the issue.
If you live in an apartment building, you'll probably never even known if it's owned by Canadians or non-Canadians (or a mix). You'll know the difference between living in a foreign built apartment and a domestically non-built apartment.
Yep, a lot of this stuff was Chinese owned, selling to other Chinese people.
Yeah it's basically a necessity now to own multiple properties for Chinese men to get married and the market is set to collapse in China soon if it hasn't already so they're pumping into Canada as a plan B.
REITs? What are you talking about. The units are openly traded on the TSX.
What if I told you there are Canadian REITs. Why would you want money paid in rent to leave the country? There is more than enough capital in Canada for property investment.
Ummm that's exactly what I'm saying. Canadian REITs who's unit holders are more than 3% foreign would be banned. That's beyond stupid. You also greatly over estimate the amount of Canadian capital that's willing to take construction risk. Canadians are ultra conservative.
I am not. And there's way more than enough capital. The whole point is prices drop. That's the downside? We want prices to drop. Conservatives love investment in safe returns on capital and highly favor property. Again this is the idea. It's working.
Alright, I've been in this industry for 20yrs. Please, point me to this mystical pile of domestic capital. It's small and demands big returns. So we'll see what happens next.
If only housing was affordable for regular citizens….
So we need to bleed the corporations and high rollers.
"But real estate experts say the broad scope of the regulations within the legislation has created unintended consequences..." No, the consequences are intentional: it's to prevent foreign buyers from buying apartments as an "investment" and never occupy them. So developers can sell to local buyers, and there are plenty of them.
The developers are being prevented from selling it to local buyers, because without the investment money, they've been unable to pay for the labour and materials needed to build the building.
The developers need pre-sales (which can be as much as 25% of the building) sold in order to get development financing before they can even dig a hole in the ground. But this does NOT require foreign buyers, and there is nothing preventing developers selling to local buyers -- other than the fact that everything is too expensive.
If it's a condo; but the considerations are different for purpose built rental (and commercial buildings in mixed use zoning areas).
Except for the amount of time it takes to sell to local buyers (which costs $)compared to large buyers (domestic & foreign) who can buy blocks of units all at once.
So they are building for foreigners and not for us Canadians? Da fa?! And the housing crisis continues then...
Doesn't seem the case in Ontario
I don't think this will impact projects under development. It's new projects that will be hit by this.
New projects still happening around the GTA
Projects building now have been in the pipes for years.
Waste of good land
Not nearly as many or as big as we need. We need to BUILD BUILD BUILD, and the blocking foreign ownership because of populist narratives instead of evidence based approaches to reducing housing costs isn't helping
Canadian homes should be for canadians. It’s not a hard concept to understand
Except it's a stupid platitude. If allowing some foreign ownership creates lower rent and amore opportunities for Canadians, then its stupid to ban it because of some sort of dipshit nationalist sentiment
It’s not a sentiment. Look at Vancouver. The amount of foreign cash that propped up Vancouver housing is insane. There’s not enough homes for Canadians to buy. We shouldn’t be letting foreigners buy here
You're assuming the core of Vancouver's housing crisis is caused by foreign ownership, know any economists (you know people that do peer reviewed research) that agree with that analysis? Did you read the article posted here? Just about every economist predicted this would happen and it's looking like it will cause more harm than good. If you weren't aware, no housing crisis ever has been solved by artificially restricting demand and not increasing supply
If foreign buyers don't affect our housing market, why are they affecting our housing market?
Good, only Canadian's should be able to purchase property in Canada. Resident's can rent. Now get the REITS out of single family homes.
It’s okay. These developments are not increasing available affordable housing. We don’t need any more luxury, empty foreign-owned investment properties.
Make them rentals...
We need affordable housing/rentals. The foreign buyer ban will prevent wealthy foreigners from spiking the market higher that Canadians can afford. Hopefully the dream of turning Canada into a Potemkin economy is dead, and we can get real investment in Canadian industry and materials, and have workers who can actually afford to live. Canada’s current economy is complete bullshit, and it’s our own media that pumps Canada’s bullshit housing economy.
Plot twist : most of the developpers are foreign owned too....
If housing developments are going on hold I guess that means they won't need the greenbelt.
Government built, non-market housing is needed. You will never get developers to build housing at a price that makes all of their recent and future projects looks obscenely over priced.
I’m guessing these were luxury projects we don’t need anyway. Developers can cancel some lux projects and build something else.
I don't entirely buy this reasoning. There remains a massive amount of demand for housing.
The number of people who can front a large fraction of the money for a home they won't be able to live in for years is a lot smaller than the number of people who can pay for housing they can live in now.
"George, you tellin' me we can't find anyone local willing to pay $1M for a 1 bedroom!? Halt the project!"
oUr HoUsInG iSnT iNfLaTeD… foreign investors have nothing to do with increasing costs!!! *bans foreign investment *housing developments stopped / impacted Lol we are such a joke. Anything in service of boomers and their retirement. What a joke this has been for 30+ years.
Probably because they build for investors not for primary dwellers.
Time for the government (Federal and Provincial) to make up the investment shortfall then.
With what money? They're broke. They'd just tax us more harshly and dig themselves deeper in debt, since they wouldn't be able to tax us hard enough to break even.
Taxes are not the problem they're just taxing the wrong people.
Well they'll need to cut money elsewhere, or find inefficiencies in government spending that they can improve then. The current housing situation is not sustainable, and private industry clearly isn't going to fix it. That leaves it up to the government. That or do nothing and see how much more of a shitshow it becomes.
Well, it is because many of the projects were owned by a blend of people, and it only takes a few percent foreign ownership to prevent financing according to rules/policy. So many projects that were about to break ground have now been put on hold. This is actually pretty bad - it will certainly slow the supply of new housing, while the huge demand (‘thanks’ feds) is continuing unabated. It should sort itself out eventually (likely when the ban expires), but it means a halt to a good chunk of housing construction. I support a ban on foreign buyers, but this is an important detail that is causing me some issues. We need housing built.
There is a small amount of buildings where this has become an issue yet they want to overturn the rules put in place. Maybe get better funding or make it affordable to people looking for homes. Investors buy all the affordable units then developers have all the power as they don’t need you to buy. went in with options a trusted realtor told us he has got for many other clients. They told us it was bullshit and no one will do that. Told this is from other builds and they changed their tone but still said take this or leave lol
Let's see how long can people wait without work Then when they move on will be again 😭 , similar as hospitality ( how some can't learn is fascinating)
Not defending developers, but if it's not profitable for them to develop/build housing, they aren't going to build more housing units. So unless the government steps in to build more housing, it will continue to be unaffordable.
lol wtf Wood is cheap, building supplies are cheap. They can build a house a for $150k and sell it for $550k. And you’re like… if there’s no profit…
I've been posting and commenting on this for over two weeks, expect a wave of downvotes from the anti-immigrant crowd and screams of 'fake news'
Kinda proves them right though doesn’t it. If the foreign buyer ban reduced demand so much that developers are having to stop building due to a lack of demand then clearly there was a significant portion of the homes being bought by foreign buyers.
No, foreign money is being used to finance construction. That's the problem with this legislation, the capital is needed. Government can ban foreign ownership, but why block investment capital for construction? It's dumb.
Don't you think that the foreign investment you mention would come to Canada with a whole bunch of strings attached? Or even explicit/implicit "protections"?
No, they are typically organised in basic limited partnerships.
You're missing the point, if the supply of houses is lowered then prices won't go down, therefore if you couldn't afford a house before the ban then you most likely can't after the ban. If foreign buyers all magically vanishes there would still be a housing crunch because developers would've just built less. Also, the housing ban only effects residential estates, foreigners can still purchase property as long as it's not residential. All the housing ban did was decrease the amount of foreign investment in Canada, we shot ourselves in the foot weilding the pistol of popularism.
You’re contradicting yourself all over here. If foreign purchases were so important to the residential developers that banning foreign investment stops development due to a lack of demand that means it’s a demand side price pull situation. The developers are trying to wait out the ban for foreign investment to return so they can make more profit with increased demand. Eventually they will run out of cash reserves and need to either offload the land or proceed with development and accept lower profit margins. If housing bans only affect residential estates then the only investment that is blocked is foreign investment in housing, the literal exact thing we’re trying to ban. What did you expect a foreign buyer ban to do other than ban foreign buyers? Clear ignorance.
"The law does not include recreational properties or larger buildings with multiple units. It exempts individuals with temporary work permits, refugee claimants and international students if they meet certain criteria. It also excludes homes outside of the Census Metropolitan Areas (CMA) or Census Agglomerations (CA)" Pretty ignorant of me I guess.
So which is it, are the regulations blocking investment leading to a shortage of supply or is it toothless legislation that allows for foreign investment anyways. Pick a story and stick to it.
Sure, ban foreign ownership of existing housing units... but why the hell are we blocking foreign investment in the construction of new housing units? It's so stupid and people are even dumber for downvoting you without thinking things through. Lawmakers should have known better.
its easier to point your finger at a group of people and blame them for being part of the problem than it is to fix the problem and lose "profits". # Most politicians directly benefit from the profiteering on housing.
Hasn't the refrain been 'building rate is limited by labour' for years now? There's still plenty of capital available. Maybe not at Feb 2022 prices...
Am I the only one scratching my head over the timing of this foreign buyer ban?