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Comment by aquaticsunset | Hacker News Reader

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).

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

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.

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.

Pretty sure investors buying have dropped by 50% according to /r/rebubble

"All cash" just means "no contingency on financing". It rarely means "will not be financed".

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.

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.

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.

But as the quote says, the market can remain irrational longer than you can remain solvent.

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.

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

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