A ban on foreigners buying residential property in Canada took effect Sunday, aiming to provide more homes to locals facing a housing crisis. Several exceptions in the law allow individuals such as refugees and non-citizen permanent residents to buy homes.
In late December, Ottawa also clarified that the ban would only apply to urban housing, not recreational properties such as summer cottages.
The temporary two-year measure was proposed by Prime Minister Justin Trudeau during the 2021 election campaign when rising prices put home ownership out of reach for many Canadians.
“The desirability of Canadian homes attracts profiteers, wealthy corporations and foreign investors,” his Liberal Party said in its campaign plan at the time.
“This leads to a real problem of underutilized and empty housing, rampant speculation and skyrocketing prices. Homes are for people, not investors.”
After winning the 2021 election, the Liberals quietly introduced the Ban on Non-Canadians Buying Residential Property Act.
Major markets such as Vancouver and Toronto have also introduced taxes on non-residents and vacant homes.
Despite the recent boom, the country’s real estate market cooled for sellers as mortgage rates followed the Bank of Canada’s aggressive monetary policy in an effort to curb inflation.
According to the Canadian Real Estate Association, median home prices fell from a peak of more than C$800,000 (US$590,000) in early 2022 to just over C$630,000 (US$465,000) last month.
Many experts also said the ban on foreign buyers – who account for less than five per cent of Canadian homeowners, according to the national statistics agency – would not have the desired effect of making housing more affordable.
Rather, they point to the need for more housing to meet demand.
The Canada Mortgage and Housing Corporation — the national housing agency — said in a June report that nearly 19 million housing units will be needed by 2030.
That means 5.8 million new homes need to be built, or 3.5 million more than are currently expected to be built, to meet that demand, it said.
(Except for the headline, this story was not edited by NDTV staff and was published by a syndicated channel.)
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