Canada is banning foreigners from owning their own homes from January 1st in a bid to stop house prices soaring.
The ban will be in place from New Year’s Day for two years and follows in the footsteps of New Zealand who also banned ex-pats from owning residential properties in 2018.
New Zealand had 2.9 per cent of home buyers as non-residents, which fell to just 0.4 per cent but house prices continued to soar.
Housing policy experts are unconvinced Cananda’s ban will have much impact as many including those moving here for work and international students will be exempt.
In British Columbia only about 1.1 per cent of transactions in 2021 involved a foreign buyer.
Brendon Ogmundson, chief economist at the British Columbia Real Estate Association, told CBS Canada : “I think this is very much a political policy, more than an economic policy.
“A lot of the public has been convinced over the last few years that it’s foreign investors and foreign money that are driving home prices, rather than what’s actually doing it: low interest rates and very low supply.”
A Canadian government spokesman said: “Houses should be homes for Canadians to live in and not an investment asset for foreigners.”
And Robert Kavcic, senior economist with Bank of Montreal, added that the ban will have “a minimal impact on the ground, especially when much bigger factors like interest rates and market psychology are dictating real estate activity and prices right now”.
He added: “Foreign buying was a bigger issue back in 2016, 2017. But this latest run in real estate was fuelled by domestic buyers.”
International students and foreign workers are allowed to purchase one property, as long as they have lived in Canada for a certain number of years, which shows their intention to become permanent residents.
The rules only apply to residential properties with three or fewer dwelling units.