Jump to content
Political Discussion Forums
Moonlight Graham

Foreign investors are buying condos in bulk to rent out

Recommended Posts

From a recent article in the Financial Post about the effects of housing prices due to COVID-19:

Razia Husein, a Toronto realtor whose clients comprise mostly wealthy foreigners or permanent residents residing abroad, says that she’s had trouble selling downtown condo units that some investors would buy in bulk in a typical year.

“I sell 8 to 10 units, either pre-construction or newly built, to one buyer (in different properties). Some are from India, some are from the United Kingdom, some are from Trinidad. I tell my clients to not put all their eggs in one basket.”

This year, Husein says she’s trying to facilitate sales on the phone, but it’s proving to be difficult. “They need to get on a plane and come and see a unit, or see the area. So I’m just doing a lot of rentals right now, I usually manage these investors’ properties, and find them renters,” she added.

https://business.financialpost.com/real-estate/the-theory-of-immigrants-and-foreign-investors-driving-canadas-property-market-is-about-to-be-tested

So the wealthy foreign investors travel to Canada to look at the condo properties to buy here.  Then they leave Canada.  They buy condos in bulk, and then have their real estate agent rent them to people in Canada.  How in world is this legal?  Canadians are getting screwed.  Foreign investors are helping to drive up Canadian real estate prices.

Edited by Moonlight Graham
  • Like 1

Share this post


Link to post
Share on other sites
46 minutes ago, Moonlight Graham said:

They buy condos in bulk, and then have their real estate agent rent them to people in Canada.  How in world is this legal?  Canadians are getting screwed.  Foreign investors are helping to drive up Canadian real estate prices.

What ?  This is news to you ?  How is it legal ?  Countries invest in real estate across borders all the time.

Share this post


Link to post
Share on other sites
46 minutes ago, Michael Hardner said:

What ?  This is news to you ?  How is it legal ?  Countries invest in real estate across borders all the time.

You've heard of people in foreign countries buying condos IN BULK.  8-10 units at a time?

Share this post


Link to post
Share on other sites
22 minutes ago, Moonlight Graham said:

You've heard of people in foreign countries buying condos IN BULK.  8-10 units at a time?

They buy up whole buildings, yes.  This is what has been happening, and driving rents through the roof.   Liberal and Conservative governments have been thrilled - so why aren't you ?  (He asked rhetorically)

Share this post


Link to post
Share on other sites
1 hour ago, Michael Hardner said:

They buy up whole buildings, yes.  This is what has been happening, and driving rents through the roof.   Liberal and Conservative governments have been thrilled - so why aren't you ?  (He asked rhetorically)

Not just rents but condo prices.

Share this post


Link to post
Share on other sites
6 hours ago, Moonlight Graham said:

Not just rents but condo prices.

Right - but rents are not an investment, and higher rents are a problem for working people who don't have a 5% downpayment, which is around $40K plus closing costs.

  • Like 1

Share this post


Link to post
Share on other sites
12 hours ago, Michael Hardner said:

Right - but rents are not an investment, and higher rents are a problem for working people who don't have a 5% downpayment, which is around $40K plus closing costs.

They buy the condos as an investment and then rent out the condos for income to help pay for the mortgage/taxes/condo fees etc.

I don't know if this actually raises rent prices.  If there's more people buying condos and renting them out wouldn't that lower rent prices since there's more places to rent?  As opposed to people buying condos to live in themselves?

Share this post


Link to post
Share on other sites

A lot are just kept vacant with no renters.

Is not only foreigners, lots of older generations buy it and they leave it empty.

Not to mention the airbnb units.

We need to look into issues like this because this is gasoline for socialists and they have a point to an extent.

Someone that paid taxes all their life in this country should have priority to housing if they work full time and are productive members of society.

In 5-10 years I will be selling mine and will move to the suburbs. Maybe downtown was never intended for full time housing. 

Share this post


Link to post
Share on other sites
3 hours ago, Moonlight Graham said:

1. They buy the condos as an investment and then rent out the condos for income to help pay for the mortgage/taxes/condo fees etc.

2. I don't know if this actually raises rent prices. 

3. If there's more people buying condos and renting them out wouldn't that lower rent prices since there's more places to rent?  As opposed to people buying condos to live in themselves?

1. Yes, and higher condo prices drive higher rents.
2. Yes, rents have been increasing at a high rate for years, though they have dropped due to Covid-19.
3. Theoretically but it isn't happening that way.  The other factor is that a lot of new units sit empty, and that many go to Air BnB.

Share this post


Link to post
Share on other sites

The Canadian firm CAPREIT owns nearly 4,000 rental units in Ireland. 

https://www.globenewswire.com/news-release/2020/05/15/2034546/0/en/CAPREIT-Reports-Continued-Growth-and-Strong-Operating-Performance-in-First-Quarter-of-2020.html

This is the way of the world and it’s not necessarily a bad thing. I would much rather rent from a large organization than some guy with one condo, esp. if something goes wrong. 

 

  • Like 1

Share this post


Link to post
Share on other sites
3 hours ago, SpankyMcFarland said:

The Canadian firm CAPREIT owns nearly 4,000 rental units in Ireland. 

https://www.globenewswire.com/news-release/2020/05/15/2034546/0/en/CAPREIT-Reports-Continued-Growth-and-Strong-Operating-Performance-in-First-Quarter-of-2020.html

This is the way of the world and it’s not necessarily a bad thing. I would much rather rent from a large organization than some guy with one condo, esp. if something goes wrong. 

 

If enough units are built to offset rising demand, those more expensive rental properties will remain vacant.  The 'investor'  will not generate revenues and with dropping prices, they will be unable to recoup their initial investment.   So why is supply always behind demand to screw the customer?   If people start leaving Canada we will see some interesting market conditions.

Share this post


Link to post
Share on other sites
19 hours ago, cougar said:

If enough units are built to offset rising demand, those more expensive rental properties will remain vacant.  The 'investor'  will not generate revenues and with dropping prices, they will be unable to recoup their initial investment.   So why is supply always behind demand to screw the customer?   If people start leaving Canada we will see some interesting market conditions.

I don’t think the developers are the culprits there. The nimbys of my generation who don’t want to see their precious neighbourhood ‘ruined’ by inexpensive apartments are a bigger problem for younger people trying to stay in the city. 

Share this post


Link to post
Share on other sites
31 minutes ago, SpankyMcFarland said:

I don’t think the developers are the culprits there. The nimbys of my generation who don’t want to see their precious neighbourhood ‘ruined’ by inexpensive apartments are a bigger problem for younger people trying to stay in the city. 

Honestly, immigration is also tough on people who want to stay in the city.

Most immigrants stay in the cities, and they compete for housing at both ends of the food chain.

At the bottom you have the government snapping up housing for immigrants, and poor people can't compete with the government. At the top end you have extremely wealthy people buying properties as second residences which they will only visit a few weeks a year. In the middle there are people who buy up condos for Air BnB's. The Speculation and Vacancy taxes are supposed to combat the air bnb's and the mostly-vacant units, but time will tell.

Homelessness in Canada is not a good option. 

Edited by WestCanMan

Share this post


Link to post
Share on other sites
13 hours ago, WestCanMan said:

Honestly, immigration is also tough on people who want to stay in the city.

Immigration is not an issue here. The immigration system in Canada is just good marketing as a friend of mine put it.

This concept that Canada is open to all is a myth, sure there are pictures from the border welcoming people but behind the scenes it is harder sometimes to come and stay in Canada than the US. Trump uses his marketing for his base as well to say the opposite.

Instead of focusing on poor immigrants working minimum wage in the big cities the question should be how come the government allows priority to foreign investors to own property than a tax payer individual and on top of that it allows them to keep it empty.

If a society can not provide decent housing opportunities for individuals that work and pay taxes no wonder some of the younger generations are buying the big lie of socialism. I said opportunities, not free housing, housing is not a human right in my view, is something to work towards.

Edited by Independent1986

Share this post


Link to post
Share on other sites
6 hours ago, Independent1986 said:

Immigration is not an issue here. The immigration system in Canada is just good marketing as a friend of mine put it.

This concept that Canada is open to all is a myth, sure there are pictures from the border welcoming people but behind the scenes it is harder sometimes to come and stay in Canada than the US. Trump uses his marketing for his base as well to say the opposite.

Instead of focusing on poor immigrants working minimum wage in the big cities the question should be how come the government allows priority to foreign investors to own property than a tax payer individual and on top of that it allows them to keep it empty.

If a society can not provide decent housing opportunities for individuals that work and pay taxes no wonder some of the younger generations are buying the big lie of socialism. I said opportunities, not free housing, housing is not a human right in my view, is something to work towards.

We have over 300,000 immigrants per year here. We've averaged somewhere around 25,000 refugees per year since 2016. That's a lot. We bring in another 1% of our population. 

Those people almost exclusively go to the cities.

The topic I'm replying to is:

Quote

The nimbys of my generation who don’t want to see their precious neighbourhood ‘ruined’ by inexpensive apartments are a bigger problem for younger people trying to stay in the city

 I didn't say any Canadians have a right to free housing in the city, but now that you brought up the topic, refuges do get free housing in the city. The government pays for it, and low-income Canadians can't compete with the government for housing. 

You can't really act like that's not a topic, it just is. I didn't create the situation, I didn't make it up, it just exists. 

Share this post


Link to post
Share on other sites

Can you Hogtowners send some of those foreign investors out our way?   I have had a condo for sale for 2 years now, price dropped 15%.  Our brilliant developers kept on building when the boom went bust and we are so oversupplied you can't give real estate away - ESPECIALLY condos.

Share this post


Link to post
Share on other sites
23 hours ago, WestCanMan said:

We have over 300,000 immigrants per year here. We've averaged somewhere around 25,000 refugees per year since 2016. That's a lot. We bring in another 1% of our population. 

Those people almost exclusively go to the cities.

The topic I'm replying to is:

 I didn't say any Canadians have a right to free housing in the city, but now that you brought up the topic, refuges do get free housing in the city. The government pays for it, and low-income Canadians can't compete with the government for housing. 

You can't really act like that's not a topic, it just is. I didn't create the situation, I didn't make it up, it just exists. 

I was replying to the subject of foreign investors renting out apartments which is the topic of this thread. I didn’t comment on immigration either way so I’m not really acting like it isn’t a topic. Not all immigrants go to the big city - more than 50% of my local hospital’s staff are immigrants like me - but many of them do. It certainly is a factor in increasing demand for accommodation in places like TO. 

Share this post


Link to post
Share on other sites
On 6/27/2020 at 10:10 PM, cannuck said:

Can you Hogtowners send some of those foreign investors out our way?   I have had a condo for sale for 2 years now, price dropped 15%.  Our brilliant developers kept on building when the boom went bust and we are so oversupplied you can't give real estate away - ESPECIALLY condos.

Where are you?  Fort Mac?  Sadly it's not coming back anytime soon over there.  

21 hours ago, SpankyMcFarland said:

I was replying to the subject of foreign investors renting out apartments which is the topic of this thread. I didn’t comment on immigration either way so I’m not really acting like it isn’t a topic. Not all immigrants go to the big city - more than 50% of my local hospital’s staff are immigrants like me - but many of them do. It certainly is a factor in increasing demand for accommodation in places like TO. 

Almost all of them go to the big cities - Toronto, Montreal and Vancouver.  

The real-estate markets in Toronto and Vancouver (surrounding areas as well) have been a steadily growing joke for about 10 years now, with cheap lending making it cheap to borrow and easier to qualify for mortgages, thus increasing demand, thus increasing prices.  Those steadily increasing prices encourage people to borrow to buy a rental home for investment purposes, and when housing prices continue to climb, overseas money starts dumping in.  You end up with loads and loads of foreign-owned condos, Airbnb's and even just straight-up empty houses all for the sake of speculative investing.  

At this point I'd argue that housing prices have fundamentally detached from at-home economics, with it being almost impossible for the average single Canadian to buy in these regions.  Housing, after all, is meant to be lived in, but we have a real problem on our hands when middle-class Canadians are priced out altogether.  

I must admit to a bit of shadenfreude, however, as the greed and speculation seems to be coming home to roost.  50% of GTA condo-rentals were already in the red even back in 2018.  With the coronavirus and a recession on our hands, laid off workers are moving in with family and rentals are going vacant.  This will ripple out 

Share this post


Link to post
Share on other sites
On 6/29/2020 at 9:32 AM, Moonbox said:

Where are you?  Fort Mac?  Sadly it's not coming back anytime soon over there.  

Almost all of them go to the big cities - Toronto, Montreal and Vancouver.  

I am near Saskatoon, and we have a small but strong Chinese community in SK.  My best friend from my time in China came over three years ago so his son can be raised here instead of Beijing...leaving the top post in a very large state-owned engineering firm to be able to live in a place where kids can be kids, he can do as he pleases and where he is comfortable and feels welcome.

He hooked me up with a Chinese firm that advertises Canadian real estate, and our condo will soon be listed in both HKSAR and mainland.  Yes, most go to Vancouver and Toronto, but not everyone wants to be there and not everyone in China can afford the million + bill for sanctuary in those cities, vs. a million RMB in SK.

Trump declaring war on China could be one of the best opportunities for Canadians to do business with Chinese companies, since if one plays their cards right, we can afford them entry into the US market through the "back door".

Share this post


Link to post
Share on other sites

Well...I think we're going to see far more than Trump against China in the coming years.  Even Trudeau has abandoned his demure-kitten diplomacy with China.  India has gone from considering China an important strategic partner to their biggest and most immediate adversary, as has most of the South China Sea.  

If I were you I'd expect things to get much worse before they get better.   

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


×
×
  • Create New...