Buying as an investment, whether by foreigners, corporations or whatever, is a symptom not a cause of the housing shortage. The cause of the housing shortage is that we’re not building enough houses. That’s it. Supply and demand, same as it’s always been. The solution is to reduce demand or increase supply.
Comment on So many expensive homes
wildbus8979@sh.itjust.works 10 months ago
All this talk of foreign investors. But the reality is they represent a small proportion of single family homes[1]. It’s easy to blame foreigners, but the real problem is domestic. It’s corporations. Corporations are being all the housing. And they don’t mind sitting on their invest, even vacant, for years.
Foreign owners only account for a small share of the Canadian real estate market. According to Statistics Canada, a government website, non-residents owned 2.2 percent of residential properties in Ontario and 3.1 percent in British Columbia in 2020. The percentages were 2.7 and 4.2 in the Toronto and Vancouver metropolitan areas, respectively.
According to data reported by the PEW Trust and originally gathered by CoreLogic, as of 2022, investment companies take up about a quarter of the single-family home market.
So yeah, y’all keep the bigotery going and blame foreing investors, you’re playing right into capitalism’s hand.
maporita@unilem.org 10 months ago
NielsBohron@lemmy.world 10 months ago
That doesn’t mean “is a symptom, not a cause.” If it’s actually supply and demand, then the investors buying the housing is part of the problem, but just a symptom. The investors are decreasing supply and increasing demand, so it’s really two sides of the same coin.
Personally, I think that just building more houses isn’t the answer, because the corporations can just keep buying them up. This will artificially decrease supply and increase demand, which keeps them making a profit. And as long as corporations can make a profit with this model, they will (and people will continue to suffer).
VelociCatTurd@lemmy.world 10 months ago
Yes let me buy a house on someone else’s land I’m sure they won’t mind. And if there’s not enough land left in America, we just need to increase the supply of land.
maporita@unilem.org 10 months ago
If the owner of the land is selling it then they obviously don’t mind. Or do you believe that no-one should own land?
VelociCatTurd@lemmy.world 10 months ago
Actually, I’ve never thought about it, but the concept of “owning” land is pretty absurd tbh. There are people born everyday, beholden to imaginary lines drawn by dead fuckers hundreds or thousands of years ago.
RickRussell_CA@lemmy.world 10 months ago
I feel like this article didn’t do a great job of answering the question. They didn’t really determine whether big corporations are buying homes, they determined that investors are buying homes. The actual text:
Those two statements are not equivalent. “Investor” could be a single individual buying a home with the intent of offering it as a vacation rental when not in use. It could be somebody who bought a duplex and rents the other unit out until their parents retire. It could be a house flipper who does 1 house at a time – each time registering an “investor purchase”.
Even “corporation” doesn’t really mean anything; a “corporation” could be an LLC with one employee, the owner.
And even when big corporations buy single-family homes, it’s not clear to me that this has a lasting economic impact. It sounds like a lot of these investment companies are renting the the homes or flipping them. Ultimately, demand is still demand. Somebody has to be there to buy or rent the home for these investments to make sense, so the any price increase resulting from this investment activity is some kind of external, artificial pressure. It’s a real representation of economic value, it is a price that occupants are able to pay.
NielsBohron@lemmy.world 10 months ago
I have a very specific viewpoint on this issue, as I live in a vacation destination. Various investors are buying up every property that comes up for sale in my community (large corporations, small companies, wealthy individuals looking for vacation homes, etc.)
Every single property that gets bought, gets registered or otherwise improved to the point that there’s no chance in hell anyone living and working in the community full-time can afford to buy, unless they bought their first property before 2016. Since then, home ownership among my colleagues has become a pipe dream (and without giving away too many personal details, let me just say my colleagues and I are well-educated professionals making way above the median income for jobs in the area).
As I type this out, I’m listening to a million-dollar house being built in the lot behind me (which will almost certainly sit vacant >80% of the time), a shit rental being turned over next door (which charges $3k/mo for a 3/1.5), and two short-term vacation rentals partying across the street (which usually charge $300-$400/night).
Regardless of who it is, investors buying up housing is a huge problem for people that are trying to own their own home, especially first-time buyers.
RickRussell_CA@lemmy.world 10 months ago
With respect, you’re missing the point.
Sellers don’t determine price. Buyers do. “Investors” (big, small, whatever) are selling homes at those prices (or renting, or VRBOing) because there are customers ready to buy the next available unit. If customers aren’t willing to buy at that price, then the seller will lower the price. Or never build the big house in the first place. Or never renovate. Who would spend money on an investment when nobody will buy it?
They can only sell for those prices because buyers are ready to buy.
Economists have a concept of “economic value”. Regardless of price, “economic value” it what the next buyer is willing to pay for an item RIGHT NOW. People have a lot of weird ideas about what the “value” of something is, and they’ll include all sorts of non-monetary factors because they think value is a feeling or concept of utility that particularly applies to them. They value “walkability” or “views” or “quaint antique design”, or whatever.
But inasmuch as “value” has any objective meaning, the best one economists have managed to come up with is economic value – the price that a unit of something will sell for at this very moment. And I humbly suggest that the economic value of housing in your area something is determined entirely by the buyer: the person or entity that is willing to buy the next available unit of housing.
Devi@kbin.social 10 months ago
You and the other guy are talking about two different things. You're trying to explain supply and demand in a very factual way, the other guy is explaining to you how this is hurting actual people who need somewhere to live.
They haven't missed the point at all but are talking about the human element here.
leadore@kbin.social 10 months ago
The "investors" are the buyers/customers, and they aren't reselling these houses--they're renting them out. It's mostly corporations increasingly doing over the last 15 years or so (I think it started around the 2008 financial crisis). They have the capital to do it and so regular people are being priced out more and more as this practice keeps driving up prices.
It didn't used to be this way. Even in my "cheap" area, when I bought my house back in 2005 all but one house on my block were owner-occupied. Now, more than half the houses are rentals because whenever one came up for sale it was bought by a rental company. This is a serious crisis that needs to be addressed.
ChonkyOwlbear@lemmy.world 10 months ago
Part of the problem is it’s still more profitable to build an expensive property and wait a couple years to find a buyer who can afford it than to build an affordable property which will sell right away.
jmanjones@lemmy.world 10 months ago
Blaidd@lemm.ee 10 months ago
Because the alternative is to be homeless.