The Canada Mortgage and Housing Corporation, the national housing agency, noted in a June report that nearly 19 million homes will be needed by 2030.
A law banning foreigners from buying residential properties in Canada went into effect yesterday, Sunday, with the aim of making more homes available to Canadians, who are facing a housing shortage.
Several exceptions in the law allow refugees and permanent residents who are not citizens to buy homes.
At the end of December, Ottawa also clarified that the ban would only apply to urban housing and not to recreational properties such as vacation homes.
The temporary, two-year measure was proposed by Prime Minister Justin Trudeau during the 2021 election campaign, when soaring prices put home buying out of reach for many Canadians.
"The appeal of Canadian homes is attracting speculators, wealthy corporations and foreign investors," his Liberal Party said in its election manifesto at the time.
“This is causing a real problem of underutilized and empty homes, rampant speculation, and skyrocketing prices. Homes are for people, not investors.”.
Following their 2021 election victory, the Liberals quietly introduced the Non-Canadian Residential Property Purchase Ban Act.
Large markets such as Vancouver and Toronto have also introduced taxes on non-residents and vacant homes.
Despite its recent boom, the country's real estate market has cooled for sellers as mortgage rates follow the Bank of Canada's aggressive monetary policy in an attempt to curb inflation.
According to the Canadian Realtors Association, average home prices have fallen from a peak of more than 800,000 Canadian dollars (590,000 US dollars) in early 2022 to just over 630,000 Canadian dollars (465,000 US dollars) last month.
Many experts have also said that the ban on foreign buyers – who accounted for less than five percent of home ownership in Canada, according to the national statistics agency – would not have the desired effect of making homes more affordable.
Rather, they point to the need to build more housing to meet demand.
The Canada Mortgage and Housing Corporation, the national housing agency, noted in a June report that nearly 19 million homes will be needed by 2030.
That means that 5.8 million new homes will have to be built, that is, 3.5 million more than are currently planned to meet that demand.
Source: AFP/Infobae
