A year ago, the federal government instituted a foreign buyer ban after passing the Prohibition on the Purchase of Residential Property by Non-Canadians Act in 2022. The two-year ban, which came into effect on Jan. 1, barred non-citizens, non-permanent residents and foreign controlled companies from buying up Canadian property as an investment.
But Wallace says that ban didn’t do much for her family.
“There’s all of these very luxurious buildings going in all around us that are outrageously priced,” said Wallace, after attending an open house at a promising $1.1-million condo. “The foreign buyers tax … I don’t think that’s making an iota of difference.”
Critics say the foreign buyers ban, which was aimed at making housing affordable for Canadians, had many exemptions and was more of a political manoeuvre. They say it’s clear housing remains out of reach for too many in Canada, and that the country should look to other places in the world to find strategies to foster home ownership.
What’s the number between foreign buyers vs multiple homes owners? We need tighter rules on both if anything’s going to make a dent on housing affordability.
There’s a video by Economics Explained that reviews this law change from an economic perspective. At around the 10 minute mark, he shows a chart of the country that breaks down provincial reporting of foreign property purchases. Not every province tracks this stat, but for those that do, foreign buyers are responsible for around 3%-6% of all purchases. Even then, this law didn’t ban all of those purchases. There were so many exceptions that most foreign buyers could still buy all the property they wanted. I’m not sure that anyone tracks if a property buyer already owns property.
The video suggests, as does the OP article, that this was likely a political stunt to make it seem like the government is doing something while not actually doing anything. Actually lowering house prices comes with economic negatives. For people who already own houses, their house could then be worth less than their mortgage, a decline in GDP figures which many see as an indication of a recession, and a decline in stock market value since so much of it is now tied to real estate assets. The government wants to avoid hurting the economy while appeasing people who see houses as something to live in and not as a financial asset.
That depends strongly on how you go about doing it. If you try to do it by destroying jobs and turning your city into Detroit or something, sure, that’s bad. But if you do it the sane way, by fixing the zoning code to allow more density and require less (expensive and space-inefficient) parking, then you’re making the city a more desirable place to live at the same time and it becomes a virtuous cycle.
Plus building density encourages transit, which is more economically and energy effecient than everyone driving. Even if everyone is in an EV, electrified transit is still more effecient.
I would phrase that even more strongly: trying to design cities to accommodate cars is utterly disastrous, and would still be so even if they ran on pixie dust and emitted nothing but unicorn farts.
The biggest problem isn’t even pollution or energy efficiency; it’s just the sheer amount of space cars waste (in terms of both wide streets and parking lots)! Allowing the presence of cars to destroy walkability – and make no mistake: accommodating cars and having any other transportation mode (walking, biking, transit) be viable are mutually-exclusive – has all sorts of knock-on negative effects, up to and including increasing obesity (because walkable cities help keep people fit) and harming mental health (because Euclidean zoning often makes it illegal to build “Third Places” near housing).
Its almost as if most roadway design theory is based on stuff they made up in the 60s off no real data other than wanting to sell The American Dream
But no matter how you do it the metrics they mentioned will still go down. Property values will go down because reducing property values and making housing affordable is pretty much equivalent.
The 40-60 year old houses that have been neglected for years sitting on half an acre in an older part of my hometown really shouldn’t be worth 750k-900k anyway.
Thanks! I think I remember reading something about this “ban” that it really isn’t a ban, just extra hurdles that can be circumvented.