Comment by __turbobrew__
2 days ago
My gut feeling is that wealthy people buying up the housing stock to rent out is not actually as common just supply restrictions not meeting the demands of individuals.
I used to live in Vancouver, and on my street almost all occupants were owners. But guess what, the number of houses on that street has not changes in 100 years, and the number of people who want to live in Vancouver has probably increased tenfold.
The issue wasnt that all the housing stock was bought up, the issue is that housing stock did not increase to satisfy demands.
Additionally, a place like Vancouver is really a global real estate destination. People with money who are not from Canada come to Vancouver and drop a few mil on a single family home and outprice all the locals. If you are buying a house in Vancouver you are competing with wealthy people local, but also the top wealth from across the globe.
BC did pass legislation to make all single family homes qualified for quadplexes, but I think it is too little too late.
Anything short of taxing every residence which is not a primary residence AND banning foreign ownership AND reducing permitting toil AND raising interest rates, is going to fall short.
I gave up a few years ago and moved somewhere else. Vancouver is no longer for Canadians.
> Anything short of taxing every residence which is not a primary residence AND banning foreign ownership AND reducing permitting toil AND raising interest rates, is going to fall short.
You forgot eliminating favorable taxation for real estate as well.
But actually if you kept all of those factors and simply just increased supply, it would still lower prices. It's not that complicated. It doesn't matter how many incentives you place on top of real estate. If you build more and prices decrease by 20%, it doesn't make demand shoot up by 20%.
The vast majority of people will never purchase more than one home, and will also never leave the metro-area they grew up in.
I think Vancouver people imagine the demand of Chinese real estate investors interested in their city is endless. It is not. Vancouver is the city that has the highest percentage of Chinese-owned real estate outside of China (globally) and its still at only 30%.
And the vast vast majority of cities do not have this dynamic or anything close to it. And the Chinese population is massively declining over the next 40 years, not growing.
> only 30%
That is a huge amount. I don’t blame immigration and foreign ownership as the only issues with Vancouver prices, but 30% of housing stock being owned just by Chinese population is massive. I knew several people who were Chinese nationals and owned a factory or large business in China and then bought a $4 million home in Vancouver. I don’t have any personal issues with these people and I befriend several, but I also realize that foreign capital from the richest residents outside of Canada were out competing locals.
Another thing to consider is that a large number of foreign nationals buying real estate in Vancouver come from countries that have strong capital controls (China, India) whereas Canada has basically no capital controls which results in a pretty onesided trade relationship.
All of the housing stock was bought up. In 1953.
Why not tax primary residences too? Why should housing hoarders pay no tax when someone who invests in a productive business or hoards mostly useless shiny metals has to pay capital gains tax?
They probably could be taxed but not a lot of countries do this and those that do have exemptions.
There's many arguments against taxation of primary residents but the strongest is probably that it punishes and hinders the ability for people to make sideways movements from similar properties to other similar properties, so it hinders housing liquidity, labour movement etc.
I would be fine with house sales incurring capital gains/losses. You are right, it is just another asset.