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PHOTO: There are several exceptions, which include allowing refugees and permanent residents who are not citizens to buy homes. 

Canada has banned foreigners from buying residential property, in an attempt to make more homes available to locals facing a housing crunch.

The temporary two-year measure was first proposed by Prime Minister Justin Trudeau during the 2021 election campaign when soaring prices put home ownership beyond the reach of many Canadians.

“The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” his party said at the time.

“This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors.”

Following victory, the Liberals quietly introduced the Prohibition on the Purchase of Residential Property by Non-Canadians Act.

There are several exceptions, which include allowing refugees and permanent residents who are not citizens to buy homes.

In late December, the government clarified that the ban would apply only to city dwellings and not to recreational properties such as summer cottages.

Major markets such as Vancouver and Toronto have also introduced taxes on non-residents and empty homes.

A number of large, tall buildings in the distance.
It is estimated about 19 million units will be needed by 2030 to meet the demand for housing.(Reuters: Carlos Osorio)

Despite a recent heyday, the country’s real estate market has cooled for sellers as mortgage rates followed the Bank of Canada’s aggressive monetary policy in a bid to rein in inflation.

According to the Canadian Real Estate Association, average home prices have fallen from a peak of more than Can$800,000 ($867,000) at the start of 2022 to just over Can$630,000 last month.

Foreign buyers account for less than five per cent of home ownership in Canada, according to the national statistical agency, prompting experts to believe the ban will not have the desired effect of making homes more affordable.

Rather, they point to a need for more housing construction to meet demand.

The Canada Mortgage and Housing Corporation said in a June report that close to 19 million housing units would be needed by 2030.

That means 5.8 million new homes must be built, or 3.5 million more than are currently anticipated to be built to meet that demand, it said.

AFP 

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