So why don't they build more homes?
The other possibility is that they are building more homes, and want them to be purchased by people who will live in them.
Note: not a Canada expert and tbh the “they” in question is a bit undefined here
Why wouldn't that wealthy person rent the property out and get better ROI? Keeping it empty does not make sense to me.
I mean, a place where your rental profit is 3k/month, might sell for 100k more than you bought it for, to the next wealthy person who thinks they can make another 100k profit by holding and selling after an year.
Is that something you want to change with governmental policy?
If the main goal is to park the cash somewhere outside the person's country, they presumably have "enough", so they don't want to deal with all this.
I believe the people are rich enough that the logistic overhead of even having a property manager rent it out isn’t worth it to them. Better to keep it in pristine condition and flip it however many years down the road.
I live in Barcelona, and the rental market is crazy. Technically I should be allowed to sign a contract for 5 years, but because of the rights that kick in after 12 months, there's a ton of landlords that only want to offer 11 month contracts.
Same situation in India.
The rental yield is low, taxes are high, compliance is time consuming, and there is lack of legal framework in cases of disputes.
A court case will take a decade to resolve if the tenant claims the property.
The only solution I can see is government provide incentives and security against tenant for landlords or government gets into business of renting by building houses.
We have single family homes in ton of places where there should be low rises but zoning doesn't allow for it.
Indeed, the solution would be to take away zoning power from the city into provincial or even federal hands and let housing be more dense where the taxpayers already paid for rapid transit. Look: https://en.wikipedia.org/wiki/Edmonds_station_(SkyTrain) this is not even a particularly busy station and it has 4M passengers and these two https://en.wikipedia.org/wiki/Rupert_station https://en.wikipedia.org/wiki/Renfrew_station together has barely more than half of that.
We need them to be orange in a block or two radius around all Canada Line and SkyTrain stops. There's a smattering of that but not much.
There are plenty of markets in Canada where the price of homes have been on the decline for the last decade, namely where agriculture is nowhere to be found, but for someone reason people don't want to live in those places.
No need to ban those 'evil' foreigners, just tax them so they can pay for what the locals want.
I suspect the real problem is low supply high demand + domestic speculation, which is why none of the blame the foreigner solutions work
And if prices were going up enough, it'd be worth it.
The fact that there is so much development and change going on, and that it's still not enough to lower rental vacancy rates (or prices) is something that I think contributes to people feeling like maybe adding supply doesn't help and there's other problems.
Also the federal government doesn't have a ton of jurisdiction into increasing supply, that's largely a provincial concern.