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jimtan
Real Estate Talker
Topic Author
Posts: 5427
Joined: Tue Jul 31, 2007 10:59 pm

Should the government intervene?

Mon Feb 29, 2016 10:21 pm

What should the government do?

"Two-thirds of Canadians in poll think government should intervene in housing market

Most Canadians in poll said house prices are too high where they are, even outside Toronto and Vancouver..."

http://www.cbc.ca/news/business/angus-r ... -1.3465574

Of course, the governments should collect data in order to understand the problem. Even Christie 'big hearted' Clark has finally come around. What should the government do? What priorities should it set? After all, acknowledgement of the problem means that something needs to be done about affordable housing.

Let's focus the discussion on this thread instead of repeating yourself repeatedly on several threads.
 
conurus
Real Estate Talker
Posts: 46
Joined: Mon Jun 22, 2009 12:45 pm

Re: Should the government intervene?

Tue Mar 01, 2016 4:42 am

In my humble opinion, the first priority is to curb tax evasion on assignment sales. That might require more documentation at closing hopefully not causing too much inconvenience. Due to lack of knowledge I am not able to outline the precise steps which need to be taken.

Secondly, as has been suggested before, some kind of a capital tax on real property for owners who have no other income in Canada may be levied. This is targeting owners whose property values are incommensurate with their incomes. But we have to make sure not to hit retirees with this.

Whatever we do we have to keep in mind that bubbles are temporary phenomenon so rules and regulations introduced must work through boom and bust cycles without interfering with the normal operation of the real estate market.

I personally do not believe this problem needs to be fixed, but we are a democracy so the people do what they voted for. It was not so red hot last year but surged over the past few months. It was never very affordable but recent surges caused this to hit the news and gain widespread attention now. Capital outflows far outpaced trade surplus and Vancouver RE is one of the parking spots for the money. This condition like every bubble is not sustainable. Capital outflow in itself is not as evil as pundits purport, but residential RE is one of the poorest possible asset to invest in from a country's strategic standpoint. If I were the leaders of a country with substantial foreign reserves I would have wanted the money to invest in resources and infrastructure if it has to flow out of my country anyway. If Canada understands this is a transient condition that may be curbed quickly down the road, then the right course of action from a strategic standpoint is to absorb all that money and sit out the surge, letting market forces readjust the price afterwards. That is free money for the benefit of Canada and I don't see why we should resist or reject it, and there is a price you have to pay to park money here as if we were a Swiss bank. The only justification to intervene is if the price increases become permanent but 1, in the long run capital outflow is not unlimited, and 2, in the short run an unexpected policy change may curb it overnight.
Market can stay irrational longer than you can stay solvent - John Maynard Keynes
 
Fabien
Real Estate Talker
Posts: 229
Joined: Sun Mar 29, 2009 10:27 pm

Re: Should the government intervene?

Tue Mar 01, 2016 7:05 am

Of course they should. It's an unregulated, untaxed mess. Apart from the little man/woman of course, they have to pay their dues. PTT, capital gains, pay up or else they'll come gunning for you. For everyone else, welcome to the casino. Except since 2009 we've been told by the 'experts' on here and in politics and in the media that the 'everyone else' don't actually exist. Tax free gains for all - except they don't exist.

It's all your fault damnit. So I guess on reflection there shouldn't be government intervention, 'cos it all us and 'anything else' is so small it doesn't matter..
 
whattodo
Real Estate Talker
Posts: 60
Joined: Tue Oct 27, 2015 10:04 am

Re: Should the government intervene?

Tue Mar 01, 2016 11:52 am

Or course they should! Locals can't compete with offshore millionaires (maybe billionaires) who launder money here. I strongly believe that Canadian homes should be for Canadians who live here, work here, & pay income taxes here. The problem is that's its too late now. If they ban foreign ownership then prices would drop at least 50% in certain areas. This would cause massive foreclosures & job losses. This would kill our economy! The government needed to do something about this 10 years ago.

I keep saying this over & over. As long as local owners homes are going up in value the do not care where the money comes from. They don't care about the future damage this is causing to our country & our kids. I am still waiting for any home owner on this forum to agree with me on this. :roll: I know it won't happen though. See the comments below to prove my point.


http://www.theglobeandmail.com/news/bri ... e28962021/


Hi Canada,

We just wanted to thank you for letting us launder all of our dirty money into your real estate market. Also very happy that political correctness is blocking any real debate on this issue. Once again, a big thank you to politicians, police, banks, CRA and real estate agents. This money laundering operation would not be possible without you turning a blind eye.


This wealthy offshore buyer has to launder a lot of corrupt cash or gold from his associates or organization overseas. Canada is known world wide as the place to clean your corrupt money and nothing like speculating on some real estate with no intention of occupying as profits can be made.Canadians have only themselves to blame for being the most gullible, easily manipulated accomodating suckers in the world. If Canadians would only voice their concerns and stand up for themselves then something could be done.
 
eyesthebye2
Real Estate Talker
Posts: 1162
Joined: Sun Jul 27, 2014 6:41 am

Re: Should the government intervene?

Tue Mar 01, 2016 12:31 pm

I have a way to curb immigration without touching the policy directly.

Make health care premiums mandatory 18 years old and up. That means you can't enter the system at 55 without paying unpaid premiums from age 18-54. That's basically why our system is bankrupt...immigrating older individuals who need high levels of health care who did not contribute when the were younger and lighter users.

This would have to be an effort shared with Alberta and Ontario. Otherwise immigrants would bolt en masse to the area of least resistance.
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: Should the government intervene?

Wed Mar 02, 2016 4:04 pm

lots of jealous people that want what others have lol
 
JasonBugra
Real Estate Talker
Posts: 12
Joined: Sun Feb 14, 2016 1:10 am

Re: Should the government intervene?

Wed Mar 02, 2016 7:43 pm

To implement such a program, we have to considered that it will interfere with both our macro & micro economic environment. If not controlled appropriately, imagine a massive correction happen. I can't say for sure, however consider the stock market. Although it is almost completely different than real estate, the underlying factor is that they are both investment. Whenever government jumps in to regulate it the particular stock will crash, and will never return back to normal unless government leaves. To be truly honest let the free market dictate valuations, because if it doesn't work, it will eventually crash. If not, then we either make more money or move outside of the cities.
 
rofina
Real Estate Talker
Posts: 1530
Joined: Fri Feb 06, 2009 6:39 pm

Re: Should the government intervene?

Thu Mar 03, 2016 8:24 am

conurus wrote:
In my humble opinion, the first priority is to curb tax evasion on assignment sales. That might require more documentation at closing hopefully not causing too much inconvenience. Due to lack of knowledge I am not able to outline the precise steps which need to be taken.

Secondly, as has been suggested before, some kind of a capital tax on real property for owners who have no other income in Canada may be levied. This is targeting owners whose property values are incommensurate with their incomes. But we have to make sure not to hit retirees with this.

Whatever we do we have to keep in mind that bubbles are temporary phenomenon so rules and regulations introduced must work through boom and bust cycles without interfering with the normal operation of the real estate market.

I personally do not believe this problem needs to be fixed, but we are a democracy so the people do what they voted for. It was not so red hot last year but surged over the past few months. It was never very affordable but recent surges caused this to hit the news and gain widespread attention now. Capital outflows far outpaced trade surplus and Vancouver RE is one of the parking spots for the money. This condition like every bubble is not sustainable. Capital outflow in itself is not as evil as pundits purport, but residential RE is one of the poorest possible asset to invest in from a country's strategic standpoint. If I were the leaders of a country with substantial foreign reserves I would have wanted the money to invest in resources and infrastructure if it has to flow out of my country anyway. If Canada understands this is a transient condition that may be curbed quickly down the road, then the right course of action from a strategic standpoint is to absorb all that money and sit out the surge, letting market forces readjust the price afterwards. That is free money for the benefit of Canada and I don't see why we should resist or reject it, and there is a price you have to pay to park money here as if we were a Swiss bank. The only justification to intervene is if the price increases become permanent but 1, in the long run capital outflow is not unlimited, and 2, in the short run an unexpected policy change may curb it overnight.


How long are we willing to wait?

Its been a decade. Are we willing to wait 20 years? 30? How much time has to pass before we begin to consider its more than an anomaly?

How many neighbourhoods are we willing to hollow out? How many empty condos are we willing to build? How many business are we willing to displace? How many families are we willing to drive away from the region? How many young educated professionals are we willing to push out?

Where is the benefit in all this?
 
jimtan
Real Estate Talker
Topic Author
Posts: 5427
Joined: Tue Jul 31, 2007 10:59 pm

Re: Should the government intervene?

Thu Mar 03, 2016 9:19 am

Go Girl, Go!!!! :mrgreen:
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: Should the government intervene?

Thu Mar 03, 2016 9:38 am

The neat thing about Canada is there's freedom to move so go to another city if you want a dirt cheap house lol
 
jimtan
Real Estate Talker
Topic Author
Posts: 5427
Joined: Tue Jul 31, 2007 10:59 pm

Re: Should the government intervene?

Thu Mar 03, 2016 9:41 am

tdma800 wrote:
The neat thing about Canada is there's freedom to move so go to another city if you want a dirt cheap house lol


Eventually, you will have to relocate because you can't afford to upgrade and live here. :roll:
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: Should the government intervene?

Thu Mar 03, 2016 9:45 am

https://en.wikipedia.org/wiki/Section_S ... d_Freedoms
"Section 6 of the Canadian Charter of Rights and Freedoms is the section of the Canadian Constitution that protects the mobility rights of Canadian citizens, and to a lesser extent that of permanent residents. By mobility rights, the section refers to the individual practice of entering and exiting Canada, and moving within its boundaries"
 
reallyreal
Real Estate Talker
Posts: 418
Joined: Thu Apr 10, 2014 7:17 am

Re: Should the government intervene?

Thu Mar 03, 2016 10:38 am

tdma800 wrote:
lots of jealous people that want what others have lol


Totally agree - all the criminals from China are quite jealous of our life here... so they move. I don't blame them, I'd hate to live in China too! :D
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am

Re: Should the government intervene?

Thu Mar 03, 2016 11:13 am

being envious of others money is the in thing now
 
rofina
Real Estate Talker
Posts: 1530
Joined: Fri Feb 06, 2009 6:39 pm

Re: Should the government intervene?

Fri Mar 04, 2016 6:00 pm

tdma800 wrote:
being envious of others money is the in thing now


Of course it is.

Inequality hasn't been this bad since the feudal times.

Remember what happened when the peasants finally revolted?
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