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Lexicon posted:I simply disagree that such a proposal, in the abstract, is axiomatically racist. One certainly could advocate this for racist reasons, and doubtless that happens (perhaps in a widespread manner). But like I said - we exclude foreigners from plenty of things - indefinite residence (outside of immigration channels), jobs, owning banks - and I don't think that's racist to do so. Part of the benefit of being a nation state is the ability to give your own citizens preferential treatment in various aspects of life (whether it's a wise policy decision in any of those is an entirely separate matter). All of those things however are axiomatically xenophobic. Now that isn't to say that some restrictions are not justifiable. For instance, if you feel foreign ownership of telecommunication isn't in your national best interest due to real or perceived risks, you should disallow it. When a proposal that made that is xenophobic in nature, it isn't incumbent on me to determine whether the speaker making it isn't a racist. It is up to them to make a case that removes the doubt. Now I know that you are not arguing pro here, but in the above quote about preferential treatment: What is the preferential treatment being offered to Canadians here? We are still the only people allowed to live here indefinitely anyways. Someone making that statement shouldn't be branded immediately as a racist. However a VERY large majority of people will remove any doubt about it, if they were to actually articulate why they think it is so.
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Apr 7, 2013 19:43
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ocrumsprug posted:All of those things however are axiomatically xenophobic. Now that isn't to say that some restrictions are not justifiable. For instance, if you feel foreign ownership of telecommunication isn't in your national best interest due to real or perceived risks, you should disallow it. Indeed. We're in agreement here. ocrumsprug posted:What is the preferential treatment being offered to Canadians here? We are still the only people allowed to live here indefinitely anyways. Well, under foreign ownership rules, presumably only Canadian citizens, naturalized or otherwise, would be permitted to purchase property. "Preferential treatment" is a hollow term, but it's conceivable as a right we'd only extend to our citizens. Australia has implemented this to some extent if I'm not mistaken, and to very little effect by the sounds of things (side note: what the hell is it with Anglo-Saxon countries and their drat fetishization of property!) ocrumsprug posted:Someone making that statement shouldn't be branded immediately as a racist. However a VERY large majority of people will remove any doubt about it, if they were to actually articulate why they think it is so. Of this I'm sure you're correct. See, we're really in broad agreement - I just bristled slightly at the absolute equivalence of such a policy with racism (not unfairly, I think, given the preponderance of outlandish statements on the left and right in these here subforums).
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Apr 7, 2013 23:29
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It's racist because there is no other explanation for why you should think it is good policy. Everything else you talked about has at least a slightly plausible (even if rarely justifiable in reality) whiff of foreigners, i.e. people who are outside of the Canadian democratic political process, somehow benefitting unfairly on the backs of Canadians. The welfare and other benefits that come with citizenship and permanent residency, for example, or the implicit backing of the state and taxpayer behind the banks. Foreign ownership of property is where a foreigner gives a Canadian a shitload of money in return for something that he can't even carry back to China, and for which he actually still needs to pay taxes(which are impossible to avoid) for in Canada. What policy goal is being achieved here? Should we also ban exports of oil because why should a dirty foreigner be allowed to buy oil when TRUE CANADIANS still have to pay for gas? Or cars built in Ontario because there are REAL CANADIANS who need cars? How about we ban all foreign companies from employing Canadian workers, because they are driving up the price of labour for those poor REAL CANADIAN companies? The only way someone who advocating restrictions is if he straight up comes out and admits that his argument is entirely premised on the notion of "gently caress you, got mine". To be consistent you would also have to for example support restrictions on ownership of property by residents of other provinces, because why should those dirty Albertans be allowed to buy houses in BC when there are REAL BCers who want houses, and basically just says that I want this thing but other people are willing to pay more money for it than m, therefore the government should just ban other people from being allowed to own it so that I can buy it for a lower price. Actually the government should just seize that house and give it to me because gently caress the people who own the house for wanting so much money for it. At least you're not a racist. Pretty sure people don't actually believes that though, and are just uncomfortable with having to live next to the "wrong kind" of people.
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Apr 7, 2013 23:51
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Throatwarbler posted:It's racist because there is no other explanation for why you should think it is good policy. Everything else you talked about has at least a slightly plausible (even if rarely justifiable in reality) whiff of foreigners, i.e. people who are outside of the Canadian democratic political process, somehow benefitting unfairly on the backs of Canadians. The welfare and other benefits that come with citizenship and permanent residency, for example, or the implicit backing of the state and taxpayer behind the banks.  First of all, as already mentioned, I don't think it's good policy. Second of all, as already mentioned, one plausible reason is that it reduces the pool of buyers and thus hopefully reduces demand and thus hopefully reduces the price level. That's an awful lot of "hopefullies", but at least it's a reason beyond fear of living adjacent to The Yellow Menace. Throatwarbler posted:Should we also ban exports of oil because why should a dirty foreigner be allowed to buy oil when TRUE CANADIANS still have to pay for gas? Or cars built in Ontario because there are REAL CANADIANS who need cars? How about we ban all foreign companies from employing Canadian workers, because they are driving up the price of labour for those poor REAL CANADIAN companies? Actual people think all of these things (hell, I bet you could find instances of each in the Canadian Politics thread alone). Some are racist, some are stupid, some reject economics outright, some are motivated by other considerations. They are not, however, all racist.
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Apr 8, 2013 00:11
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Lexicon posted:
Well good, then your views are consistent with someone who is not a racist? quote:Actual people think all of these things (hell, I bet you could find instances of each in the Canadian Politics thread alone). Some are racist, some are stupid, some reject economics outright, some are motivated by other considerations. They are not, however, all racist. Eh, OK. I kind of addressed this in my third paragraph.
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Apr 8, 2013 00:19
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Throatwarbler posted:Well good, then your views are consistent with someone who is not a racist?  In common with many racists, I had breakfast this morning. In common with many non-racists, I prefer my coffee without sugar. The world is not a dichotomy of racists being racist, and non-racists being non-racist.Throatwarbler posted:Eh, OK. I kind of addressed this in my third paragraph. Ok. Quitting while we're ahead.
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Apr 8, 2013 00:29
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Even if you just give certain groups priority in housing selection, and allow people to remain in the same areas by right over generations (the Vienna model), what do you think that will look like in 50-100 years? It's basically a direct road towards segregated housing and possibly ethnic ghettos.
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Apr 8, 2013 01:06
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I guess we could put some sort of minimum % of housing that always remains in the "pool" so newcomers to a city aren't stuck in the crappy fringes. Although already we ghettoize based on class/income, if a different housing model overall produces much better results but has some problems with housing for newcomers that seems like an ok trade-off to me, and a problem that's easier to solve. And really, with decent planning and development no area should be a ghetto as all areas should strive for an even distribution of qualities of housing. Market based housing already produces the worst ghettos and segregation, if another system produces overall better (even if not perfect) results I'd say it's a better system.
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Apr 8, 2013 01:47
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Albino Squirrel posted:There aren't a whole lot of black people in Edmonton (most of the ones I know are either professionals or refugees at my clinic so my perspective is necessarily skewed) so I'd say it's more 'curiosity' than 'rampant racism.' There's a large South Asian/East Asian population in Edmonton so it's not as though someone who's black is the Only Minority In Town (unless you live in Spruce Grove); TBH any prejudice is much more likely to be economic than racist in nature. There's lots of Africans in Edmonton. I work as a Production Supervisor at an industrial plant and a good quarter of my staff is African. Lots of Ghanians, South Sudanese, Nigerians, and Somalis. The only racism I've encountered towards black people in Edmonton is towards either 1) black kids who aren't African trying to be gangsters, and 2) Somalis actually being gangsters. If you're not one of those two, you'll be fine.
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Apr 8, 2013 01:51
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Fraternite posted:There's lots of Africans in Edmonton. I work as a Production Supervisor at an industrial plant and a good quarter of my staff is African. Lots of Ghanians, South Sudanese, Nigerians, and Somalis. Well, this is racist. How about this bubble then? It sounds exactly like what our government is doing to forestall the crash here, do tactics like these even work? http://www.forbes.com/sites/kenrapoza/2013/04/02/more-china-cities-puncture-holes-in-housing-bubble/ Both Beijing and Shanghai have increased down payment requirements on second homes and upped a sales tax from 2% to 20% on all used home sales. Moreover, in Beijing, it is now against housing regulations to buy a second home in the same city. The central government is asking other cities to do the same thing immediately.
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Apr 8, 2013 10:38
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jet sanchEz posted:Both Beijing and Shanghai have increased down payment requirements on second homes and upped a sales tax from 2% to 20% on all used home sales. From the BBSes, residents affected are already (hopefully joking) about getting divorced to bypass this restriction. http://english.sina.com/china/2013/0403/578326.html quote:Zhang Zhongliang, 39, decided to divorce his wife -- not to end their 18-year relation, but to allow for the purchase of the family's third apartment. shots shots shots fucked around with this message at 10:51 on Apr 8, 2013 |
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Apr 8, 2013 10:48
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jet sanchEz posted:How about this bubble then? It sounds exactly like what our government is doing to forestall the crash here, do tactics like these even work? I was under the impression that they had restricted multiple purchases in a single city awhile ago. The irony of this is that it is probably meant to encourage people to buy condos in one of China's ghost cities. It is likely that the only way to forstall a crash after a bubble is for real demand to pick up the excess capacity, and for wages to rise to levels that make the home prices affordable. Their wage inflation is such that they may be able to pull off the latter, but I am not sure they can deal with their overcapacity. Unfortunately it is seems that it is more of a effort to extend and direct the speculative mania.
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Apr 8, 2013 15:05
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ocrumsprug posted:The arguments for restrictions typically have the following features: The argument for restricting foreign ownership sounds simple enough to me. It would reduce housing prices and make housing more affordable. I think everyone can agree that's a good thing. Stop fixating on the race aspect for a second. Nobody's bringing up restrictions on immigration, are they? The proposal is to stop the influx of foreign capital, not people. Can you be racist against money? Why? That presumes that the "default" is a total lack of capital controls. Of course, there's a lot of neoliberals who'd like you to believe that, but there's no reason it should be so. Asian countries suffered a great deal during the 1997 crisis, in part because they had removed most barriers to capital flows. Big inflows of speculative money in the early 90s caused bubbles in equity and real estate markets (sound familiar?); when the bubbles popped, the capital fled even faster than it had arrived, causing an economic collapse. Now, Canada is not Thailand. I'm not saying we need to impose foreign ownership restrictions. But it's a tool that's available to us to help manage the housing bubble; we shouldn't throw it away so quickly.
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Apr 8, 2013 15:26
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Guy DeBorgore posted:It would reduce housing prices and make housing more affordable. I think everyone can agree that's a good thing. If people who already own houses(70% of households) thought that reducing housing prices was a good thing, what's stopping them from selling their houses for those reduced prices?
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Apr 8, 2013 15:29
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Throatwarbler posted:If people who already own houses(70% of households) thought that reducing housing prices was a good thing, what's stopping them from selling their houses for those reduced prices? Their HELOCs.
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Apr 8, 2013 15:37
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Throatwarbler posted:If people who already own houses(70% of households) thought that reducing housing prices was a good thing, what's stopping them from selling their houses for those reduced prices? Are you new to this planet or something? People like money, and try to get as much of it as they can. We can't change this, so we work with it.
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Apr 8, 2013 15:40
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Throatwarbler posted:what's stopping them from selling their houses for those reduced prices? What does this even mean?
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Apr 8, 2013 16:04
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Guy DeBorgore posted:The argument for restricting foreign ownership sounds simple enough to me. It would reduce housing prices and make housing more affordable. I think everyone can agree that's a good thing. Will it? Can you quantify how much foreign investment exists, and a percentage affect it has had own home values in Vancouver or Canada? Since I already know you cannot do this simple sounding thing, I will just jump to the conclusion. If you exclude economic racism, can you provide one reason why this fact is a given in this conversation. How do you know it?
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Apr 8, 2013 16:28
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ocrumsprug posted:Will it? Can you quantify how much foreign investment exists, and a percentage affect it has had own home values in Vancouver or Canada? That's not a simple request at all, that's a matter for in-depth economic analysis that's beyond my skill and, I'm guessing, way beyond yours. I'm not going to bother Googling around to see if anyone else has done that research either; that's too much like schoolwork. If you wanna know the exact numbers so badly, find out yourself. But your own intuition should tell you that foreign investment in the housing market can only have a positive impact on housing prices. Foreigners can't sell homes they haven't bought, and they can't take money out of our housing market unless it's money they put in. The influx of money can only result in inflation. To make explicit that this has nothing to do with race, imagine that instead of Chinese people buying homes, someone was using a money printing machine to buy up new homes with newly-minted cash; should we shut them down?
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Apr 8, 2013 16:43
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Guy DeBorgore posted:imagine that instead of Chinese people buying homes, someone was using a money printing machine to buy up new homes with newly-minted cash; should we shut them down? This is the most hilariously unhelpful analogy I've seen in quite some time. We shut down counterfeiters for reasons entirely unrelated to their impact on an asset class' pricing level.
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Apr 8, 2013 16:53
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ocrumsprug posted:If you exclude economic racism, can you provide one reason why this fact is a given in this conversation. How do you know it? Foreigners are de facto non-residents with no valid visa, meaning they can only use their properties a brief percentage of the year (depending on what their visa class is; the highest it could would be 50%). They also don't need to purchase property (if they want to visit, they can rent or get a hotel or whatever), so it's not like we're stripping them of some important right they are entitled to. Beyond that is also the fact that foreigners are given less rights and privileges while visiting Canada than legal residents are anyway, so they are below legal residents on the social-resource pecking order. Since any purchase of property by a non-resident inherently removes a limited social resource from the pool and bids up the price for the remaining resources for locals, you are essentially privileging the rights of the international 1% over poor locals. It's the same reason we don't give nonresident foreigners access to our free healthcare system, or other limited social resources. This is not a difficult point to grasp.
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Apr 8, 2013 16:55
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ocrumsprug posted:Will it? Can you quantify how much foreign investment exists, and a percentage affect it has had own home values in Vancouver or Canada? Obviously no one can do this because the real estate cartels have never bothered to collect stats (whether through incompetence or because they benefit from an environment of poor information, I'm not sure), and even if they did, I'm not sure it would reflect reality anyway as it's apparently trivial to hide the origin of capital with shell corporations, etc. That said, is it your thesis that foreign capital has had zero impact whatsoever in the pricing of Canadian real estate, and in particular the massive run up over the past decade? Genuinely curious. Personally, I reckon it's a mild contributory factor, with the overwhelming reason being Canadians (and Americans before them, and Brits at various points in the past) who are mostly innumerate and not analytically-minded, working themselves up into a collective maniacal lather about "prices always go up!", "don't pay other people's mortgages, etc", aided by the cheerleading of the FIRE sector. Mostly self-perpetuated in other words.
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Apr 8, 2013 17:24
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Lexicon posted:Personally, I reckon it's a mild contributory factor, with the overwhelming reason being Canadians (and Americans before them, and Brits at various points in the past) who are mostly innumerate and not analytically-minded, working themselves up into a collective maniacal lather about "prices always go up!", "don't pay other people's mortgages, etc", aided by the cheerleading of the FIRE sector. Mostly self-perpetuated in other words. I agree in principle, but there is also a factual element of... poor capital controls, lack of enforcement, whatever you want to call it, that leads to dirty offshore money (and not just from China!) flooding into Canada as a cash haven. The only penalty to being caught with a suitcase full of dirty money is a tiny fine and a stern talking-to, then CBSA gives you your money back and sends you out to the River Rock Casino to help with the laundering process. Remember this incident? Do you seriously think local economic conditions created this? There's not a HELOC in Point Grey large enough to pay for that kind of extravagance. Local stupidity is largely to blame for sure, but the idea that we shouldn't be enforcing some kind of basic capital controls and tying property ownership to a valid visa etc. is just ridiculous. If it's a small contributing factor, then it won't be a big deal to anybody but the corrupt CCP officials, Russian oil mafia, and drug lords, right? Franks Happy Place fucked around with this message at 17:46 on Apr 8, 2013 |
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Apr 8, 2013 17:34
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Lexicon posted:This is the most hilariously unhelpful analogy I've seen in quite some time. We shut down counterfeiters for reasons entirely unrelated to their impact on an asset class' pricing level. I don't think you really "get" analogies.
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Apr 8, 2013 17:46
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Guy DeBorgore posted:I don't think you really "get" analogies. Right back at you. Analogies are supposed to strengthen one's argument, not entirely devalue it (your post was pretty good up until that point).
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Apr 8, 2013 17:53
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Guy DeBorgore posted:That's not a simple request at all, that's a matter for in-depth economic analysis that's beyond my skill and, I'm guessing, way beyond yours. I'm not going to bother Googling around to see if anyone else has done that research either; that's too much like schoolwork. If you wanna know the exact numbers so badly, find out yourself. You are the one claiming that it is simple, intuitive even, to see that this would fix something. I am just asking you to show your work. The data you need to prove your point doesn't exist, so you can probably save yourself some Googling. Fine-able Offense posted:Foreigners are de facto non-residents with no valid visa, meaning they can only use their properties a brief percentage of the year (depending on what their visa class is; the highest it could would be 50%). They also don't need to purchase property (if they want to visit, they can rent or get a hotel or whatever), so it's not like we're stripping them of some important right they are entitled to. Beyond that is also the fact that foreigners are given less rights and privileges while visiting Canada than legal residents are anyway, so they are below legal residents on the social-resource pecking order. Since any purchase of property by a non-resident inherently removes a limited social resource from the pool and bids up the price for the remaining resources for locals, you are essentially privileging the rights of the international 1% over poor locals. Well, I would argue that housing is a social resource in Canada in the same class as healthcare. But even if I were to concede that point, the onus is still on you to show that there a real or reasonably perceived risk to foreign ownership. Don't get me wrong, I am not defending someones non-existent right to purchase property that they don't truly need here, however this is a privilege that is extended in quite a few places. I don't believe that I am negatively impacted, if my landlord is some guy that lives in Taiwan or some dude that lives in Burnaby. House prices can be bid up just as easily by some Toronto fatcat banker, Calgary oil baron or overly leveraged Vancouver real estate agent, as it can be by some nouveau rich Asian. They can proceed to leave that house just as empty, and the local poors are in just as bad of shape. This isn't privileging the rights of the international 1%. The 1% is inherently privileged, regardless of how foreign they are. If rich people buying all the houses is the problem, maybe we should fix that instead. I don't think I am the lazy one for expecting someone proposing foreign property restrictions to come to the table with some data to back up their claims of harm. I would like someone to know how big of a problem something is before they start enacting legislation to fix it. That is not too much to ask, and the fact that is no one can answer the question is pretty telling. I expect that most arguments made for them, will continue to be thinly veiled yellow menace. (Which I believe was the entirety of my original point.) ocrumsprug fucked around with this message at 18:09 on Apr 8, 2013 |
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Apr 8, 2013 17:57
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Fine-able Offense posted:I agree in principle, but there is also a factual element of... poor capital controls, lack of enforcement, whatever you want to call it, that leads to dirty offshore money (and not just from China!) flooding into Canada as a cash haven. The only penalty to being caught with a suitcase full of dirty money is a tiny fine and a stern talking-to, then CBSA gives you your money back and sends you out to the River Rock Casino to help with the laundering process. I don't disagree with any of this. I just don't care that much about foreign money in the broader picture of the Canadian housing bubble - Russian oligarchs, Chinese CCP officials, and good old-fashioned American capitalists aren't the reason why a poorly built skybox in Burnaby now retails for north of $400k (more than some very nice properties for sale in the Upper East Side of Manhattan where I just visited). I utterly despair at what locals have gotten themselves into, and thus how badly this will end when the music stops. By all means give the CBSA some teeth, consider imposing some capital controls (assuming it's thought through)... but the real tragedy in my view is what locals have done. It won't end well.
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Apr 8, 2013 18:01
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Lexicon posted:Obviously no one can do this because the real estate cartels have never bothered to collect stats (whether through incompetence or because they benefit from an environment of poor information, I'm not sure), and even if they did, I'm not sure it would reflect reality anyway as it's apparently trivial to hide the origin of capital with shell corporations, etc. I think it is probably a mild contributory factor as well. I personally think a lot of the increase in Vancouver is due to the fear of foreign investment, more than the actuality of foreign investment. That and just plain old speculative mania fueled greed. For instance, I would not be surprised to learn that a majority of empty west side houses are owned not by some off shore Asian tycoon, but by local real estate agents that have made all-in bets on the housing market. I think the size of CHMC insurance portfolio for Vancouver lends credence to it not being fueled primarily by super rich parking money in real estate here. I think the real estate cartels being able to obfuscate, or outright misrepresent, the information is a significantly larger contributing factor, and would rather have that be addressed.
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Apr 8, 2013 18:08
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ocrumsprug posted:I think the real estate cartels being able to obfuscate, or outright misrepresent, the information is a significantly larger contributing factor, and would rather have that be addressed. It's absolutely outrageous in my view that this significant (in terms of societal importance, dollars invested, and percentage of net worth) market is so opaque and sewn up by these fuckers. Not to mention the outright fabrication they engage in (that MAC marketing thing was just one incident in a long line of deceptions). The small-time investor spending $3000 on a sector ETF is immeasurably more protected by layers of regulation, oversight, and transparency than the property purchaser spending $300,000+.
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Apr 8, 2013 18:16
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ocrumsprug posted:I don't think I am the lazy one for expecting someone proposing foreign property restrictions to come to the table with some data to back up their claims of harm. I would like someone to know how big of a problem something is before they start enacting legislation to fix it. That is not too much to ask, and the fact that is no one can answer the question is pretty telling. What's lazy is saying this: ocrumsprug posted:I expect that most arguments made for them, continue to be thinly veiled yellow menace. (Which I believe was the entirety of my original point.) ...and then expecting anybody who disagrees with you will take your arguments in good faith. "If you disagree with me you must be a racist!" is just lovely, bad-faith posturing. For what it's worth, when I was with the REBGV, I proposed a collaborative study with CRA to track rates of foreign ownership, and it got shot down, presumably because foreign buyers were, at the time, a sweet gravy train. That said, REBGV conducts a regular poll of their members realtors, and one of the questions asked is something akin to, "Was your client a non-resident alien?" Now granted, there's an element of subjectivity to that question, but by and large I would expect a real estate agent to have a relatively decent handle on whether or not their client has a visa or not, since there are huge paperwork implications with regard to FINTRAC. So when they came back, time and again, reporting levels anywhere from 5% to 15%, I believe that there's a solid probability that around 8-10% of the activity in Vancouver in the last five to eight years was driven by hot money coming out of booming economies, especially China. Now, the real issue here is that the money coming out of China is effectively indistinguishable in our economy from the effects of Guy DeBorgore's mythical printing press. That's because of several reasons, really, but here are a few:
So, effectively unlimited amounts of money bidding up a limited resource. Shocking that prices were spurred higher, or that locals sensed a speculative buying frenzy and hopped aboard the train! Yes, there is a lot of stupid racism relating to this subject... but the establishment is making it a lot worse (and arguably the worst is yet to come) by turning a blind eye to these legitimate problems for so long. Also, for the record, I speak relatively fluent Mandarin and do a lot of eavesdropping. It's all just anecdotal, but it certainly mirrors what I see in the analytical data.
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Apr 8, 2013 18:17
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^^^ Out of curiosity Fine-able Offense, mind sharing what it is that you do for work? Sounds a bit like you're some renegade real-estate bear that's infiltrated the high-echelons of the real estate industrial complex 
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Apr 8, 2013 18:31
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Lexicon posted:^^^ Out of curiosity Fine-able Offense, mind sharing what it is that you do for work? Sounds a bit like you're some renegade real-estate bear that's infiltrated the high-echelons of the real estate industrial complex Here's the job listing from my old position. And yes, I hated every second of it.
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Apr 8, 2013 18:35
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Fine-able Offense posted:What's lazy is saying this: Oh I certainly don't hold with that, nor do I wish to stake out the neo-liberal, "the capital knows best" position. This particular topic will either come from a well thought out idea about the benefits of capital controls (like yours), or it can come from someones intuitive knowledge that is the fault of all the foreigners (which is distressingly common.) Calling out the latter for what it is, isn't acting in bad faith. As this thing unwinds in Canada, and the poo poo really starts to hit the fan, there is going to be a massive increase in the amount of racism directly around this topic (and it is pretty palatable in Vancouver already). None of this will be helped by people getting free passes on it. ocrumsprug fucked around with this message at 19:06 on Apr 8, 2013 |
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Apr 8, 2013 19:04
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Lexicon posted:Right back at you. Analogies are supposed to strengthen one's argument, not entirely devalue it (your post was pretty good up until that point). Fine-able Offense did a great job explaining what I meant by that analogy- the point was that foreign money flowing into the current Canadian housing market is driving up prices, not because it may happen to come from China, but simply because it's new money that wasn't in the system before. Foreign investment, if it isn't properly managed, is distortionary and harmful. ocrumsprug posted:You are the one claiming that it is simple, intuitive even, to see that this would fix something. I am just asking you to show your work. The data you need to prove your point doesn't exist, so you can probably save yourself some Googling. I did attempt to "show my work" in that post, but you chose not to quote that part for some reason. You're getting awfully hung up on the fact that the CMHC doesn't track foreign home-buyers. FO seems to think that 8-10% of sales were to foreign owners. Depending on the elasticity of housing demand, that may translate to more or less than an 8-10% price rise (probably more); it certainly will not cause prices to fall. ocrumsprug posted:I don't believe that I am negatively impacted, if my landlord is some guy that lives in Taiwan or some dude that lives in Burnaby. House prices can be bid up just as easily by some Toronto fatcat banker, Calgary oil baron or overly leveraged Vancouver real estate agent, as it can be by some nouveau rich Asian. Housing prices aren't decided by the buyer; they're decided by the bidders. All of them. And the more bidders there are for a given house, the higher the price goes. Would you like me to show my work? Because this can be proven mathematically. The rich foreign investors are no worse than the oil barons, but they are in fact competing with the oil barons (and the house flippers, and the families who need a place to live) to buy up a limited supply of property. We can't legally outlaw Albertans from buying houses in Vancouver, although China is taking measures similar to this to cool their own domestic housing market. We can, and plenty of countries do, control foreign investors entering the market.
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Apr 8, 2013 19:16
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Guy DeBorgore posted:Fine-able Offense did a great job explaining what I meant by that analogy- the point was that foreign money flowing into the current Canadian housing market is driving up prices, not because it may happen to come from China, but simply because it's new money that wasn't in the system before. Foreign investment, if it isn't properly managed, is distortionary and harmful. Lets say I'm a Chinese millionaire with 7.61 million HKD to spend on a condo in Vancouver. Since houses in Vancouver are priced in CAD, I need to exchange my HKD for CAD. I need to find someone who both has 1 million CAD and wants 7.61 million HKD. More than likely this will be a broker or bank of some sort, lets say a bank. I give the bank my HKD and they give me CAD. Then I take my million CAD to a buyer, who then takes that money and deposits it in a bank. The HKD in the first bank either get loaned to a person or company in Hong Kong, or sit around until someone wants to exchange it for a different currency. No new Canadian currency enters the system unless the Bank of Canada loosens monetary policy, which is a decision independent of my decision to buy the condo. If foreign investment was inflationary (edit: necessarily inflationary), we'd see a general rise in prices, not just in housing. Of course foreign investment can be inflationary (Greece, Ireland, Spain, etc) but with free capital controls, independent monetary policy and a floating exchange rate (like Canada) it mostly creates an appreciation in the value of the Canadian dollar. Incidentally, this is what investment in the resource sector did over the last 10-15 years. What foreign investors buying housing in Canada does is decrease the supply of housing available for Canadians. Demand exceeds supply and prices rise to a new equilibrium. Justin Trudeau fucked around with this message at 21:21 on Apr 8, 2013 |
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Apr 8, 2013 21:01
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dethslayer666 posted:If foreign investment was inflationary Uh yeah you should probably just stop there, dude. I'll be more polite and just say "Please Google 'demand-pull inflation' before claiming that FDI has no impact on a domestic economy". Franks Happy Place fucked around with this message at 21:10 on Apr 8, 2013 |
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Apr 8, 2013 21:03
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Ok simply solution: Socialize the majority of the housing market in Canada, plus world-wide socialist revolution in every other country so that all countries are nice and everyone has lovely housing and stability where they live and don't need to move around the world to improve their quality of life or or find stable governments to invest their money in. World-wide revolution seems about as likely or simple as fixing the housing market around here 
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Apr 8, 2013 21:09
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Fine-able Offense posted:Uh yeah you should probably just stop there, dude. dethslayer666 posted:What foreign investors buying housing in Canada does is decrease the supply of housing available for Canadians. Demand exceeds supply and prices rise to a new equilibrium. I didn't say that FDI has no impact on the domestic economy, I said it causes an appreciation of the exchange rate rather than a general rise in the level of prices. And it certainly doesn't directly increase the money supply, as Guy DeBorgore claimed.
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Apr 8, 2013 21:20
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dethslayer666 posted:What am I missing? ...the fact that the RMB is the world's most well-known fixed-rate currency? There's no appreciation? Also, even then, appreciation doesn't account for the dislocation of capital driving up prices in certain sectors. All you need to do in Vancouver is note the level of retail vacancies or frequency of restaurant failures to see, hmm, maybe all the capital is tied up someplace... silly.
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Apr 8, 2013 21:25
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dethslayer666 posted:I'm not an economist, so I could be wrong on this explanation, but yours is definitely wrong. Ugh, I was hoping nobody would notice this. You`re right, but so am I. No new Canadian currency enters circulation when a foreigner decides to invest- you`re right there, of course. So the inflation that occurs is clearly not a result of an increase in the general money supply. That doesn`t mean it doesn`t exist, though. Consider the Vancouver housing market in isolation, partitioned off from the rest of the economy. Here, if a foreigner chooses to invest in the Vancouver housing market, that actually does introduce Canadian currency to the (local real estate) market, which otherwise would not have been spent on property. So inflation occurs, localized to the property sector, and a bubble develops. quote:If foreign investment was inflationary, we'd see a general rise in prices, not just in housing. Of course foreign investment can be inflationary (Greece, Ireland, Spain, etc) but with free capital controls, independent monetary policy and a floating exchange rate (like Canada) it mostly creates an appreciation in the value of the Canadian dollar. Incidentally, this is what investment in the resource sector did over the last 10-15 years. It`s not so simple. Imagine you`re a rich foreign businessman with a lot of money burning a hole in your pocket. You want to invest it so as to get the highest risk-adjusted returns possible, and decide (for any number of reasons) that Canada is a good place to do so. How will you invest it? In government bonds? The returns are too low. In a private business? Not liquid enough. You want to be able to get your money out of Canada quickly if things go south. In the stock market? Sure, if that`s your thing, but the TSX isn`t big enough for everyone to buy into. There`s really not a lot of ways to invest a big sum of money, get good returns, and not be tied down. The housing market (in Canada particularly) is a very attractive candidate. Returns were very high. It`s pretty liquid, and not terribly risky: people will always need property, and it`ll always be valuable, unlike, say, stocks in companies, or exotic financial instruments. quote:What foreign investors buying housing in Canada does is decrease the supply of housing available for Canadians. Demand exceeds supply and prices rise to a new equilibrium. Hopefully you see by now that really, this is the same was what I was saying.
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Apr 8, 2013 21:28
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