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Comment by wubrr | Hacker News Reader

The problem is that most new housing in Canada is being bought up by investors, and the government refuses to do anything to disincentivize this, and continues to prop up the bubble any way it can. That might be because the majority of the federal government MPs are real estate investors themselves...

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Isn't Vancouver famous for instituting a vacant-housing tax?

https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy...

Most investors don't keep their housing vacant, and getting around this specific tax is trivial.

This is mostly for show, similar to the foreign buyers tax - the vast majority of investment properties are bought by local investors, but they're going to completely ignore that and blame everything on the tiny portion of foreign investors.

> Most investors don't keep their housing vacant

So who is in the housing then?

renters.

Vancouver has near ~0% rental vacancy as does many, many other cities across the country. Most cities in BC are below 3% vacancy.

The fact that so much housing in Canada is being bought by investors is unsurprising. There's enormous demand for rentals and incredibly low supply.

So no matter who owns the property, they are full. The problem is still too much demand for the supply. Indeed in the UK you're more likely to have a higher population density in rented houses (2 or 3 people rent a single apartment, if they all bought they would need 3 apartments)

Why does it matter who owns the property. If the market worked well there would be no gains from asset inflation, and income from renting would be pushed towards the cost of providing renting, like it does with well functioning markets.

The problem is the lack of supply, not who owns them. Now you could argue that short-term-rents are not "valid" demand, but again with UK stats outside of very specific areas the number of short-term rentals is a tiny portion of the housing market.

Doesn't "rental vacancy" just measure rentals on the market? A unit owned by a foreign investor intentionally left vacant doesn't show up in those numbers.

I suppose but the government also has put effort into tracking empty homes. They've even gone so far so as to measure electricity use to get a feel for empty homes by neighbourhood.

Vancouver now has an empty homes tax and BC also has a speculation tax, which is effectively an empty homes tax. Since the creation of both those taxes the amount of empty homes has steadily dwindled.

It's not likely that there are a remarkable amount of empty investment condos that is having an impact on rental vacancy. The most likely cause of near zero rental vacancy is that there's not enough rental apartments in existence.

That's only the problem if you're almost wealthy enough to be able to buy a home and you see investors as competition that prevents you from doing that.

If you're a working class renter that never really expects to be able to have the wealth to buy a home, the "investor" boogieman that is "buying up housing" is creating more places for you to live.

Investors buying up housing supply are not creating any new housing whatsoever. What they are doing is decreasing the availability of new housing for those who actually want to buy a home to live in, while at the same time cornering the rental market and increasing rents (and therefore speculative RE prices) across the board.

Not most, historically 15% of supply has been bought up by investors. Most recent figures I’ve seen from 2022 it was 19%. That might be still too high but certainly not the majority.

Nah, ~20% of all housing supply is already owned by investors. Over 50% of new builds are now being bought by investors (over 80% in some cities) [0][1].

[0] https://betterdwelling.com/canadian-cities-have-seen-up-to-9...

[1] https://betterdwelling.com/canadian-real-estate-investors-co...

Where do housing in the rental market come from if they aren't purchased and rented out by investors? No level of the government in Canada is building anything more than a token number of housing, and those that are built aren't added to the general rental pool.

> Where do housing in the rental market come from if they aren't purchased and rented out by investors?

Purpose-built rentals. Also, the need for rentals and rent prices in general would go down if most of the new builds weren't scooped up by investors and people could actually buy homes to live in.

> Purpose-built rentals

Purpose-built rentals are purchased by big pension funds and other investors.

> Also, the need for rentals and rent prices in general would go down if most of the new builds weren't scooped up by investors and people could actually buy homes to live in.

Are you saying there will be more supply of home built per year if higher % of rental is built? If so, then logically, it will tend to lead to lower rent and lower home price, but I was under the impression that the industry cannot build any faster than it is now and that changing the mix does not help.

Profit margins on new builds have been increasing[0] and the labour market in not too hot from what I understand, so that makes me think we can probably build more. But if we truly can't build more - introduce a tax on multiple properties and invest that into housing (in a smart way).

[0] https://betterdwelling.com/home-builder-profit-margins-incre...

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