5 ms·

Unless legislation changes, investors will just scoop up the sales and keep property values high. It's a pessimistic take but I don't see any deviation from th

Unless legislation changes, investors will just scoop up the sales and keep property values high. It's a pessimistic take but I don't see any deviation from this path (in Canada and the US).

tempsy 3y ago
Investors paying 8% can’t make the math work either.
- aquaticsunset 3y ago
  They're not getting mortgages. All cash purchases are extremely high right now (roughly 30% of all home sales in the US). They can fleece us for "modest" rent increases every year, conveniently just less than 8%, while property values stay high because these investors are able to gobble up the housing stock. Without legislation dissuading this behavior, home ownership will continue to be increasingly difficult for working people.
  - kevin_nisbet 3y ago
    I think the only good news I heard in this area in the US, is one of the big companies doing this was going bust because they screwed up their calculations for how much to offer when buying homes. So if the companies just can't make the math work and go bust that would also be a good outcome here.
  - ddorian43 3y ago
    Pretty sure investors buying have dropped by 50% according to /r/rebubble
  - HWR_14 3y ago
    "All cash" just means "no contingency on financing". It rarely means "will not be financed".
    - deleted 3y ago
      [deleted]
  - xhkkffbf 3y ago
    IT just differently mortgaged. It's not a direct mortgage, but the company that's buying these had to raise the capital one way or another. And if the company didn't buy a house, they have the choice in investing it in something else. If the bonds are paying 8%, the company must believe that the house will return even more which is pretty hard.
  - wil421 3y ago
    Why would they use cash when they could buy 5x the amount of houses by spreading the cash buy into 5 down payments? It’s likely less than 5 if you’re putting 30% down for investment properties.
- mattnewton 3y ago
  Why would they pay 8%? Surely they can get margin at a cheaper % somewhere other than a retail mortgage if they are a professional investor or firm.
- CapitalistCartr 3y ago
  But as the quote says, the market can remain irrational longer than you can remain solvent.
nonethewiser 3y ago
Who are they going to sell to for more at 8% rates?
refurb 3y ago
No, investors won't scoop them up, just like in 2008 in the US, where there were screaming deals to be had for years yet housing was regarded as radioactive for years after the crash.

Unless legislation changes, investors will just scoop up the sales and keep property values high. It's a pessimistic take but I don't see any deviation from this path (in Canada and the US).

tempsy 3y ago

Investors paying 8% can’t make the math work either.

aquaticsunset 3y ago
They're not getting mortgages. All cash purchases are extremely high right now (roughly 30% of all home sales in the US). They can fleece us for "modest" rent increases every year, conveniently just less than 8%, while property values stay high because these investors are able to gobble up the housing stock. Without legislation dissuading this behavior, home ownership will continue to be increasingly difficult for working people.
- kevin_nisbet 3y ago
  I think the only good news I heard in this area in the US, is one of the big companies doing this was going bust because they screwed up their calculations for how much to offer when buying homes. So if the companies just can't make the math work and go bust that would also be a good outcome here.
- ddorian43 3y ago
  Pretty sure investors buying have dropped by 50% according to /r/rebubble
- HWR_14 3y ago
  "All cash" just means "no contingency on financing". It rarely means "will not be financed".
  - deleted 3y ago
    [deleted]
- xhkkffbf 3y ago
  IT just differently mortgaged. It's not a direct mortgage, but the company that's buying these had to raise the capital one way or another. And if the company didn't buy a house, they have the choice in investing it in something else. If the bonds are paying 8%, the company must believe that the house will return even more which is pretty hard.
- wil421 3y ago
  Why would they use cash when they could buy 5x the amount of houses by spreading the cash buy into 5 down payments? It’s likely less than 5 if you’re putting 30% down for investment properties.
mattnewton 3y ago
Why would they pay 8%? Surely they can get margin at a cheaper % somewhere other than a retail mortgage if they are a professional investor or firm.
CapitalistCartr 3y ago
But as the quote says, the market can remain irrational longer than you can remain solvent.

nonethewiser 3y ago

Who are they going to sell to for more at 8% rates?

refurb 3y ago

No, investors won't scoop them up, just like in 2008 in the US, where there were screaming deals to be had for years yet housing was regarded as radioactive for years after the crash.