Canada bans foreign home buyers for two years

Re:Canada bans foreign home buyers for two years by bluGill on Tuesday April 19, 2022 @08:13AM (#31082081)

Farms often are sold in live auction this way with the bidders announcing their bid. Each bidders knows their maximum, but none give that way, all they give away is they are willing to top the previous bid by someone else (even this is a trick - some bidders will pretend to be more/less interested than they really are trying to scare off other bidders)

The auctioneer is typically a licensed real estate agent. The whole farm will be sold that day, sometimes field by field, sometimes as a whole (sometimes both ways - this is complex to understand: they get bids an all fields separately, then for the whole and the larger total wins). Then they sell the equipment and junk. Bankers are on hand to verify financing... For houses most people wouldn't work this way, but for farms it makes sense.

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Re:Canada bans foreign home buyers for two years by randomdata on Tuesday April 19, 2022 @10:37AM (#31083735)

As a farmer in Canada, I haven't seen a farm auction like that since I was a kid. Most farms these days are sold either by someone knocking on a door and making offer that can't be refused or by tender, conducted by law firms. Real estate agents/auctioneers, and the cut they want to take, have largely been taken out of the equation given how easy the farm properties are to sell.

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Re:Canada bans foreign home buyers for two years by bluGill on Tuesday April 19, 2022 @11:41AM (#31084646)

I see ads for farm auctions that work like that every few weeks living in Iowa.

I have no idea why there are regional differences, but I'm not really surprised they exist.

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Re:Canada bans foreign home buyers for two years by randomdata on Tuesday April 19, 2022 @12:14PM (#31085164)

> I have no idea why there are regional differences

I'm sure it is multi-faceted, but supply management is a big difference. Notably, diary farmers in some provinces voted to impose a quota price limit in an attempt to make it affordable for new farmers back in the mid-2000s. This means that the amount that quota sells for is the same now as back then, even though the fair market value has at least doubled in the meantime.

This has created a market aberration where the quota is undervalued and to resolve it farmers have started tacking the difference onto the purchase of land. In other words, on paper I pay you $x for quota and $y for land in order to stay compliant, even though in reality I'm actually paying you $2x for quota and $y-x for the land.

This, of course, has driven up the price of farmland to unreasonable heights as people notice what farmland is selling for on record. $40,000 per acre isn't unheard of these days. I bet you in Iowa, despite having a climate that can easily outgrow us in Canada, won't see anything close to that.

As farmland prices have risen (up ~700% since 2007), residential sprawl out into that farmland has become much more expensive. This has increased the pressure on housing in existing urban areas, pushing prices up there. And, thus, the Canadian housing problem that's being discussed in the larger scope here.

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Re:Canada bans foreign home buyers for two years by bluGill on Tuesday April 19, 2022 @02:36PM (#31087062)

Makes sense.

For those who don't know, the best farmland in Iowa can go for just over $20k, and as you say can grow more value than anything in Canada. Iowa should be the most valuable cropland in the world - great soil, good climate, great national economy, and relatively flat land. (there are places better in some of the above, but they are lacking in at least one significant way and so the value of their land should be less today.)

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