Canada: Two-year ban on some foreigners from buying homes

• Prime Minister Justin Trudeau’s Liberal Party: The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors. This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices.

KUALA LUMPUR (Dec 4): The Canadian government has banned foreigners from buying residential properties as investments for two years.

The ban that took effect Jan 1 came about as some politicians in Canada are of the view that foreign buyers were responsible for home price rises as they snapped up properties as investments, reported CNN Business.

“The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” stated the campaign website of Prime Minister Justin Trudeau’s Liberal Party last year. “This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors.”

The new law however, allowed individuals such as refugees and permanent residents, who are not citizens, to purchase homes.

According to an AFP report, in late December, the government also clarified that “the ban would apply only to city dwellings and not to recreational properties such as summer cottages”.

BBC reported federal housing minister Ahmed Hussen saying that the new measure is “meant to discourage buyers from looking at homes as commodities instead of a place to live and grow a family”.

"Through this legislation, we're taking action to ensure that housing is owned by Canadians, for the benefit of everyone who lives in this country," explained Hussen.

The average home price in Toronto and Vancouver has topped the C$1 million mark, “often putting them at the list of top 10 most unaffordable cities in the world” stated the BBC.

The same report also revealed that New Zealand passed “a similar legislation banning foreign homebuyers in 2018 as the country grappled with its own housing affordability crisis”.

Meanwhile, the Canadian Real Estate Association is not happy about the ban, “even with the exemptions for people who intend to move to Canada”, it said in a statement that was reported by CNN Business.

“Canada has built a reputation as a multicultural nation that welcomes people from around the world. As currently proposed, the prohibition on the purchase of residential property by non-Canadians can impact our reputation as a welcoming nation.

“The potential benefits of the ban are likely to be modest,” it added.