Foreign Housing Investment

I’ve heard of it too, apparently foreign money (mostly China) needs a legit way to pull the money out of their country and real estate is a good way to do it that doesn’t alarm regulators. Can’t say why it doesn’t make sense to rent it out. But I do know that Vancouver passed laws to limit this type of purchase.

A large part of the "foreign ownership" plaguing west-coast cities like Vancouver and Seattle is capital flight from China. In this case, real estate has the valuable property of being harder for a foreign government (who happens to be the government to which the homeowner is subject) to confiscate+liquidate than other assets, so said government will prioritize softer targets. Real estate as an investment class here is acting like a club on a car steering wheel—de-prioritizing theft, r

Yeah, and it’s a faulty assumption that all investors price housing on the basis of rents. I recall reading that in Vancouver, BC they had a large influx of foreign money pouring into their housing market because it was a way for foreigners to expatriate their money. Drove prices through the roof. They had to impose measures to discourage it. Those properties, I read, often sat empty because using them for housing was never the intent of the owners.

There is a phenomena of buying real estate in stable countries as a complicated bank account for wealthy people from unstable countries. It's like buying a pile of gold to them, except a house is harder to steal.Vancouver is suffering from this with wealthy mainland chinese, leading to the second worst affordability ratio (housing price : average annual income) in the world. You see similar behaviors in condos in china itself.It has very bad effects for the people who already live there,

I don't think the poor and down-trodden are buying up homes in Vancouver. The issue is rich foreign investors buying up real estate either as vacation homes or investment properties. The only way these people contribute to the economy and community of Vancouver is through taxes. Raising the taxes should theoretically make this type of investment less desirable (and thus more affordable for poorer local residents)

No mention of foreign investment driving up housing prices?

As an immigrant New Yorker, I welcome this step and kudos to the local government of NZ for taking such initiative. For example on NYC foreign investors have ruined the prospect for an average hard working New Yorker couple to purchase a property at a reasonable price. Foreign investors (Chinese, Russians and Middle Easterns, nothing personally against all of these demographics) have been pouring in capital via greedy American established real estate management agencies. Often owners do not want

I assume the OP is referring to (largely Chinese) real estate buyers, where the goal isn't so much earning a return, but instead finding a safe place to stash money. I know this was reported as a problem in Vancouver, BC, but I'm unconvinced it's a true problem outside of hyper-local areas. I've also seen the same argument about luxury flats in London (mostly Middle Eastern buyers here).And of course, the reporting always calls out the non-native buyers, largely ignoring

That's not complicated, it's a second negative externality. Foreigners buying and not-occupying large amounts of valuable real estates drives up the cost of new housing, with no benefit the city, even if you squint really hard. A lack of new housing means high prices for the existing housing that the locals are "just bidding against themselves" on. It's a practice that should be taxed into oblivion.

I lived in Vancouver for 6 years.> Nice, this will curb the unacceptably high 4% of home buyers who are foreign who are definitely responsible for driving the market prices up.These 4% are driving up prices of the most elite real estate, and crowding out rich elite upper-middle-class Canadians, who invest in real estate, and live in big cities (read Toronto, and Vancouver.) That's the real problem for them.So, these unacceptably high 4% is mostly visible on West Georgia, and Cam