Canada bans foreigners from buying property

• Some foreigners can no longer purchase homes in Canada for the next two years.
• Canadian housing costs are still far greater than they were ten years ago.
• The average home in Canada costs C$777,200.

Some foreigners can no longer purchase homes in Canada for the next two years.

One of the world’s most costly property markets is intended to be alleviated by the prohibition.

The average home in Canada costs C$777,200 ($568,000; £473,700) as of this summer, which is more than 11 times the median household income after taxes.

The prohibition has drawn criticism from certain people who claim it is unclear what effect it will have on the Canadian housing market.

In Ontario and British Columbia, where national figures show that housing prices are the highest, less than 6% of homeowners are non-Canadians.

The restriction, which went into effect on January 1st, forbids non-citizens or non-permanent residents of Canada from purchasing residential properties and carries a C$10,000 punishment for violations.

The Canadian government disclosed a few exceptions to the rule in late December, 11 days before the ban went into effect, including for international students who have resided in Canada for at least five years, those who have applied for refugee status, and those with temporary work permits.

The prohibition, according to federal housing minister Ahmed Hussen, is intended to deter buyers from viewing homes as commodities rather than a place to live and raise a family.

According to Mr. Hussen, “we are taking steps through this legislation to ensure that housing is held by Canadians, for the benefit of everyone who lives in this country.”

Despite a little decline in 2022, Canadian housing costs are still far greater than they were ten years ago.

When compared to 2013, when the average cost of a home was C$522,951, housing prices increased by 48% in 2014.

The typical household income in Canada has struggled to keep up with the increase in housing costs. According to the most recent data, between 2015 and 2020, the median after-tax household income increased by 9.8%.

According to a Statista analysis of house-price-to-income ratios, these figures place Canada’s property market among the most unaffordable in the world, rating the nation higher than New Zealand, the US, and the UK.

Two of Canada’s main cities, Toronto and Vancouver, regularly rank among the world’s ten most expensive cities due to their average property prices that exceed $1 million.

In 2018, New Zealand enacted legislation prohibiting foreign homebuyers as it struggled with its own housing affordability crisis.

However, since the restriction went into place, property prices have risen even after accounting for inflation.

Other nations have implemented a variety of policies to limit foreign ownership, such as creating designated restricted areas where non-residents are prohibited from buying property or imposing particular taxes on foreign buyers.

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