Canada to instate two-year ban on foreign homebuyers in attempt to curb rising prices

It's no secret that Canada has one of the exorbitant real estate markets in the world, with the average price of a home currently sitting at $869,300. Over the past two years alone, prices have gone up by over 50%.

In response, the federal government is planning on banning most foreigners from buying homes in Canada for two years.

According to CP24, the proposed ban will be introduced in the Liberals' budget on Thursday as part of a larger set of measures aimed at increasing housing affordability. The budget also includes $4 billion to update municipal zoning and permit systems, $1.5 billion for co-op housing, and $1 billion for affordable housing.

The ban, which was promised by Trudeau in 2021, reportedly applies to the purchase of condos, apartments and single residential units. Permanent residents, foreign workers, and students will still be permitted to buy these properties, as well as foreigners whose primary residence is in Canada.

This, says CTV News' Joyce Napier, is meant to crack down on foreigners who "buy the home and never come to Canada to live in it and leave the home empty while the inventory is low and people can’t buy homes."

Some analysts in Vancouver, Canada's second most expensive housing market, are skeptical that the ban would achieve the desired result.

Speaking with the Vancouver Sun, director of the UBC Centre for Urban Economics and Real Estate, Tsur Sommerville, even went so far as to call the ban "virtue signalling."

He pointed out that most foreign homebuyers go for expensive properties in Vancouver's swankiest neighbourhoods, a market that's "not what is defining affordability" for ordinary Canadians.

According to the Sun, BC has already attempted to dissuade foreign home buyers with a 20% foreign-buyers tax as well as a speculation and vacancy tax, however prices have continued to rise unabated.

Some have expressed concern regarding the exceptions made for students. One Vancouver resident argued that parents of foreign students could potentially exploit the loophole and buy homes under their children's names.