Canada extends ban on housing purchases by foreigners for two years

2024-02-04 23:16:04

The ban on buying urban housing in Canada imposed on foreign investors since the beginning of 2023 will be extended until January 1, 2027 (instead of January 1, 2025) to deal with the shortage of houses and apartments which affects the country, the government announced on Sunday.

Exceptions to this law, which only applies to city residences and not tourist properties, are still provided for refugees or permanent residents as well as certain international students and temporary workers.

“By extending the foreign investment ban, we will ensure that homes serve as homes for Canadian families and do not become speculative financial assets,” Canadian Deputy Prime Minister Chrystia Freeland said in a press release published on Sunday.

Justin Trudeau’s liberal government blames foreign investors for having driven up prices for years, particularly in large urban centers.

Not enough rental apartments

Many experts, however, estimated that this ban on foreign buyers – who represent between 2 and 7% of home owners in Canada in 2021, according to the federal statistics agency – would not have the desired effect, namely to make more affordable housing. Instead, they emphasize the need to build more homes to meet demand.

At the same time, demand for rental housing has once again greatly exceeded supply in 2023 and the number of apartments available for rental has never been lower since 1988, causing rents to rise considerably, according to the latest report from the Canada Mortgage and Housing Corporation (CMHC).

Strongly criticized on this subject by the opposition, the government has increased its announcements in recent months and has planned to allocate billions of dollars to the construction of new housing, as well as to the reallocation of federal land for the construction of apartments. .

In mid-January, Canada notably announced the establishment of a cap on visas for foreign students, whose numbers have exploded in recent years, accentuating the housing crisis according to the government.