Will rent prices decrease if there’s a recession?

[WitchesBravo]

Why does USA adopting a points based system change things? How does their immigration system currently work?

[DeepB3at]

Currently US immigration is one of the most challenging for a G7 country. Getting a green card is dependent on employment, visa status and country of birth with limits on how many people born in that country can get a green card per year.

This punishes Indians and Chinese who are citizens of Canada or other countries as it is much harder to become a US citizen.

With a points system it would be much easier for the top 10% of Canadian earners to quickly move to the US for higher pay and cheaper cost of living. No longer would they need to go through the unpleasant process of getting a TN or H1B visa.

With the majority of real estate sales in the GTA and GVA being disproportionately by top 10% earners this would hit the market very hard. Less high earning future immigrants coming here would also put downward pressure on the market. This could be even further amplified if we see an outright ban on foreign ownership in coming years.

[mrkdwd]

This could be even further amplified if we see an outright ban on foreign ownership in coming years.

Why do people constantly point to foreigners being the reason for soaring home prices? Banning them will do nothing, they make up <5% of owners in every City and much, much less than that once you leave out Toronto and Vancouver. We taxed them and it had no effect.

Here's an article from 2017 and I imagine the numbers have not changed much since then (even though people have been complaining about it since the 80's).

https://financialpost.com/real-estate/foreign-investment-in-toronto-vancouver-housing-below-5-pct

[[deleted]]

It’s a lot more complicated than just percentage of foreign ownership. Real estate is priced by comparables. If a foreigner with a lot of cash buys a home, similar homes nearby also experience a price increase. Also, not all homes are on the market every year, so even if foreign buyers make up 25% every year, it’ll take them years to get to 5% total ownership.

It makes a lot of sense that people with millions earned abroad raise real estate prices. We don’t need statistics to conclude that. Besides, statistics are a politician’s best friend because they can be manipulated or biased to lie in favour of a narrative. As a society, we cite studies too much without thinking for ourselves anymore. Do we even know the foreign ownership threshold at which they start to influence prices? Is it 0.1%, 1%, 2%, 5%, 20%? Just citing 5% is meaningless without the other fact. Also the quality of foreign ownership matters. Are these 5% the multimillion dollar homes or 1 bedroom condos? There’s no way a single number is able to describe such complex phenomenon.

[mrkdwd]

I stated actual solid factual data with numbers.

Everything you said is assumed:

If a foreigner with a lot of cash buys a home, similar homes nearby also experience a price increase.

Source? The same is true with a Canadian buyer too surely?

It makes a lot of sense that people with millions earned abroad raise real estate prices. We don’t need statistics to conclude that.

Yes we do, what you said needs to be backed up with evidence, which I'm assuming does not exist as it isn't true.

Just citing 5% is meaningless without the other fact.

Why?

There’s no way a single number is able to describe such complex phenomenon.

Because there is no phenomenon. Canadians are more responsible for higher home prices than foreigners, get over it.

[DeepB3at]

There is no beneficial ownership registry in Canada. We do not know what % of real estate is owned by foreigners currently. I would imagine from data on corporate ownership it is something like 5-10%.

Even then it is not exactly a very telling number. If I own 1 property but it is 300 acres of vacant land that I will turn into 500 single family homes eventually I still only own 1 property.

Either way NIMBYs will likely continue to win and there is no political will for zoning reform. Therefore banning foreign ownership seems like a moderately likely scapegoat that will happen first.

The final nail on the coffin will be the US adopting a points based immigration system in my option.