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Comment by thinkingkong | Hacker News Reader

The interesting parts about foreign buyers is that the best story always seems to highlight the super rich, but its not like mansions are the only things going up in price.

I'm sure that a price increase in land results in a "rising tide" effect for all homes, but because someone is willing to spend 64M on a mansion, does it mean condo's should be worth more too?

The city is pretty, but there aren't exactly a massive pile of high paying jobs, nor do we have much of an economy beyond resource extraction, satellite offices, etc.

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I agree, this bothers me as well; the mansions seem to get way more press than they deserve.

What gets under-reported is:

-the non-foreigner/non-Chinese/locals that are hanging on to 2-3 properties -the person who can now afford that $1 million condo because they just sold their smaller condo for $500,000 and netted $250,000. -the fact that interest rates are at the lowest ever and some years ago amortization periods were pushed up to 40 years and down payments of 0-5% were allowed.

Investors who rent out their properties might change the price:rent ratio, but they don't contribute to the housing shortage.

They contribute to the issue of renters being unable to buy. Each of those standalone houses are not available for purchase that otherwise would have been, unless the investor bought the land, applied for residential zoning, and built the property.

>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.

Yep. These are also the people causing housing price rises by voting for local governments that'll protect their investments and disallow more rapid new construction or smaller lot sizes.

I'm sure that a price increase in land results in a "rising tide" effect for all homes, but because someone is willing to spend 64M on a mansion, does it mean condo's should be worth more too?

It has a cascade effect - if a person who can afford a $2M house is forced into buying a smaller property because $2M doesn't go as far, that displaces the guy who could afford $1M, who displaces the guy who can afford $750K and so forth. Further down the line it hits people who can't afford to buy at all, people whose rent becomes unaffordable on their income, and so forth.

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