Re:The Canadian Housing Boom Fueled by China’s Billionaires
by 1anh2kqowg on Wednesday August 03, 2016 @01:09PM
(#12219560)
>They contribute to the issue of renters being unable to buy.
But on the other hand, they give renters a good deal. Buying at a high price:rent ratio means a low cap rate, which makes for a bad investment. So the landlord is essentially giving ownership returns to the renter, while keeping price risk themselves.
To the extent that rents are also high, this shows that the problem is not, in fact, investors but instead a limited supply of housing.
But on the other hand, they give renters a good deal. Buying at a high price:rent ratio means a low cap rate, which makes for a bad investment. So the landlord is essentially giving ownership returns to the renter, while keeping price risk themselves.
To the extent that rents are also high, this shows that the problem is not, in fact, investors but instead a limited supply of housing.