http://business.financialpost.com/personal-finance/mortgages-real-estate/vancouver-home-sales-plunge-40-and-prices-are-beginning-to-follow Meanwhile, in Toronto, realtors released a study on Tuesday to fend off cries for a similar tax in Canada’s largest city. The study from TREB showed almost five per cent of purchases in the Greater Toronto Area can be traced to foreign buyers. What happens, as the Chinese exit one market, is they go somewhere else. That's why I've got five links to the fact that the Chinese property buyers moved from Vancouver to Seattle. Although it appears as if the Vancouver dip is short-lived and is gonna be back in spades: All of this comes from the two opposing functions of real estate: houses as places to live vs. houses as investment vehicles. That's one big problem of globalism: as rich people somewhere else get exposure to global markets, those global markets have to compete with rich people somewhere else for housing. The fact that they live somewhere else doesn't matter if the houses are sufficiently valuable as investment vehicles. In Vancouver's case, it was legislation that said, in no uncertain terms, that Chinese investment was not welcome. They aren't dumb questions: they get to the underpinnings of society. "how much should we discourage foreign ownership of domestic real estate" is fuckin' thinktank-level shit.The falling numbers come as Vancouver continues to grapple with the impact of a 15 per cent foreign property transfer tax the province began imposing in August. Last month, the British Columbia premier, Christy Clark, backtracked on her foreign tax by saying foreigners with work permits who live and work in B.C. would be exempted.
Do the investors live there? Do they contribute to the local culture in a productive manner? Do they contribute to the local economy in a productive manner? Are people who already live in or desire to live in those communities and contribute able absorb the costs of raised housing prices without much detriment? If the answer to more than two of those questions is a solid "no" I think there should be heavy talks of discouragement. First and foremost, housing is literally a life necessity. If someone's investing is disrupting other people's abilities to live their lives, they need to take a good hard look at their behavior. Before it's brought up, yes I have the same opinion about house flipping and buying up properties with the sole intention of turning them around to rent to others for significantly more than what they could have paid to own said property themselves.They aren't dumb questions: they get to the underpinnings of society. "how much should we discourage foreign ownership of domestic real estate" is fuckin' thinktank-level shit.
To be clear: your opinion and my opinion are pretty well aligned. Historically speaking, however, property ownership is the luxury of the aristocracy. The reductio ad absurdum on capitalism is serfs'n'lords, d00d. Yeah - you need a roof over your head when it rains. But it can totally be an overpass. And all that aside, who says you have to own that roof? I mean, under communism you were just allotted a place to live by the system. Is that better? Like I said: the underpinnings of society. What do you want it to look like? How do you want the incentives to work? The past 70 years of American culture have been predicated on the idea that homeownership is an American deam and our culture should do everything we can to encourage that. Only problem is, when your job goes away your mortgage doesn't and there you are, shackled to a 1500 sqft rambler in Chillicothe. Or, the bank takes it and it's like you never owned it at all; worse, because now your credit is shit which means everything else in your life is expensive. Lots of exceedingly smart, exceedingly thoughtful, exceedingly compassionate people argue about this stuff all the time. Anybody who tells you it's settled and there's a right or wrong answer hasn't thought it through all the way.
The nice thing about being a non-home owning, non-policy writing, non-power wielding dude is I get to yell "Shit's broken! This is a travesty! Somebody needs to fix it!" and I get to feel like I'm doing my part, because honestly, there's not much I can do except take pleasure in being ridiculously indignant.