> How does eliminating a massive portion of the demand not reduce the price?

It reduces the price of owning a home not living in a home. We have this Chinese real estate money 'problem' in Toronto. It makes it so renting a luxury condo is actually cheaper than buying it and paying mortgage interest + property tax + maintenance.

Effectively rich Chinese people subsidize our cost of living in exchange for having a safe place to park their money :)

is that actually true though? in vancouver, we have a similar phenomenon of Chinese real estate investors, except majority of these investors seem content to buy up properties and then choose not to rent them out even if they're not living there. this takes a lot of rental properties out of the market.

If the cost of home ownership has a major decline by blocking foreign investment, then you would actually be able to buy a home for cheaper than renting, which is normal for markets without so much demand. The exorbitant housing prices have just locked out normal people from ever building some sort of equity.

You can "build equity" by doing things like buying, well, equities. Or fixed income, or any of a variety of other investment vehicles.

The only thing special about real estate investment is the massive government subsidies for it. (E.g., owner-equivalent rents are untaxed, mortgage interest is tax deductible, etc.) The best solution to that problem is simply to eliminate those tax subsidies.

The major thing that is special about real estate investment is that you can live in it. If I could live inside of Google stock and it would eliminate my need to pay rent, then sure, equities are just as good.

If you invest in equities and get a revenue stream that pays rent, you can "live in it". The only advantage to real estate is that the revenue stream is tax subsidized.

This is fixable in multiple ways; start taxing imputed rent (tolerable) or stop taxing capital income (far better).

Because returns on equities are stable enough for rent. /s

Have you seen what happened since the year started?

If you're thinking of dividends, just for 1k/mo apt you need to have 400k worth of a 3% yielding stock. 400k in a normal us housing market gets you much better than the 1k rent.

Mortgages also give people access to leverage though, so it's a bit different from other investments most people make.

> If the cost of home ownership has a major decline by blocking foreign investment, then you would actually be able to buy a home for cheaper than renting, which is normal for markets without so much demand.

But then they would stop building them (or stop building such nice, expensive ones). I'm talking about brand-new 35th floor curtain-glass condos bought straight from the developer.