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Comment by PragmaticPulp | Hacker News Reader

> One good rule of thumb is that whenever people are blaming foreigners for their problems, they're wrong.

Another good rule of thumb is to not dismiss issues just because they don't fit an over-generalized idea of how all situations must work.

The housing situation in Canada is weird. I visited a friend who lived in a high rise and barely saw anyone else come and go from the building the entire week I was there. From the windows we could see into other nearby high rises, most of which were empty. Empty not because they were for sale, but because they had been purchased as investment vehicles by foreign investors who had no intention of ever living there. An entire industry had popped up to cater to these foreign investors and help facilitate their purchase of these properties.

I can't say if this law will be able to curb that weirdness, but it should at least make a dent.

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> barely saw anyone else come and go from the building the entire week I was there

Then charge a vacancy tax.

If nobody is doing the following in a week, I am: set up Canadian entities, pay Canadians to manage it, buy houses and raise offshore capital with variable-rate notes tied to some index that's basically the value of the underlying homes.

Interesting side-point: I live in a rental only high rise development in London. When I moved in it was about half full. During the year it’s been almost completely rented out, and this is pretty obvious from the rapid increase of people in the common areas

My point: if it wasn’t rental only, I really wonder how many neighbours I’d have in a development like this, which seems like it would be a prime target for shoebox buyers around the upper-middle of the market

Stupid question, but how did you tell that they had been purchased by foreign investors?

Some local tax offices make deed owner data public

You have to show proof of citizenship and residency during conveyance. When my wife and I recently bought, our driver licences and passports were recorded by the lawyer, pretty much just to tackle this issue.

A foreign investor would need to arrange for straw purchasers to avoid the law, but that in itself would be an act of consciousness of guilt for breaking this law.

Suppose I’m in the position of the person in comment I replied to above: I look out of my window and see some empty apartments. Some time later, I write on hacker news that they were not for sale but held by foreigners as investments. Are you suggesting that, between these two steps, I would conveyance the sale of one of those apartments and thereby determine that it was bought as an investment property by a foreigner? I’m sure that’s not what you mean but I don’t get what you are suggesting?

Conveyance is the act of transferring ownership, done by real estate lawyers. If you, as a foreign investor, bought before this law came in, then when you tried to sell it, your identity as a foreign investor could be noted, triggering a check of when you purchased it with respect to this law. but the point here isn't to look around and find all the foreign investor owned properties. It's that investments are bought and sold, and getting into that step is sufficient to carry out action. In this case, the foreign investor would have to sell to someone who's a Canadian citizen, which returns housing stock to being locally owned.

Something that's not been brought up much in this discussion is that foreign real estate investment is a diversification tactic: they're buying to get money into a different market than the rest of their wealth. That's why it isn't Canadians driving most of this. Foreign real estate is primarily a safe offshore hedge.

Sorry, I don’t understand the relevance of this to the question above. Maybe I wasn’t clear. Let me try to rephrase that question:

Above, 'PragmaticPulp wrote that:

> I visited a friend who lived in a high rise and barely saw anyone else come and go from the building the entire week I was there. From the windows we could see into other nearby high rises, most of which were empty. Empty not because they were for sale, but because they had been purchased as investment vehicles by foreign investors who had no intention of ever living there.

And my question is how they knew that those apartments were empty because they were owned by some foreign investor (who presumably also wasn’t interested in making money on rent)?

I don’t understand how rules about conveyancing answer that question.

So why are they doing this in Vancouver and not like Detroit, where you can get almost 20 median priced homes (60k each) for the price of a single median price home in Vancouver (1.2m each)? It's about just buying property and storing cash right, why not try and corner the Detroit market since its actually possible with these numbers?

Because its not about just buying for property buying sake. It's just an asset. People invest in assets to hopefully see a return. The fact they are buying in vancouver and not detroit is because these investors expect to see a substantial gain with the vancouver asset versus the detroit one. SPY is down 20% this year while vancouver properties actually saw a gain, its even better to invest in vancouver real estate than the stock market currently.

So how do you walk this back and not make housing in vancouver such a great speculative asset? Easy, you devalue housing, by allowing for apartments to be built in the ~80% of vancouver that is limited to single family or low density development.

So what you saw was empty high rises. Everything you’ve said about foreign investors is pure speculation.

This is what drives me crazy about this story. The vast, vast majority of evidence suggests that the problem is with domestic investors. But because of a nice little story, suddenly it’s foreigners who are the problem.

Sounds like the actual problem is people buying homes and leaving them empty.

Foreigners are just a correlate.

Going after foreigners for this is like banning men from all bars in Canada because of the high correlation between date-rape drug usage and being a man.

Which, Toronto has a vacancy tax, so that's not an unexplored direction.

https://www.toronto.ca/services-payments/property-taxes-util...

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