Canada has extended its ban on housing purchases by foreigners for two years

A ban on foreign investors buying urban housing in Canada from early 2023 will be extended to Jan. 1, 2027 (instead of Jan. 1, 2025) to address a housing and apartment shortage affecting the country, the government announced. on sunday.

Exceptions to this law, which apply only to city residences and not tourist properties, are still provided for refugees or permanent residents, as well as certain international students and temporary workers.

“By extending the foreign investment ban, we will ensure that homes serve as homes for Canadian families and do not become speculative financial assets,” said Canadian Deputy Prime Minister Chrystia Freeland. A press release published on Sunday.

Justin Trudeau’s Liberal government has blamed foreign investors for driving up prices for years, particularly in major urban centers.

Not enough rental apartments

However, many experts estimate that this ban on foreign buyers — who represent 2 to 7% of homeowners in Canada in 2021, according to the federal statistics agency — will not have the desired effect of creating more affordable housing. Instead, they emphasize the need to build more homes to meet demand.

At the same time, according to a recent report from the Canada Mortgage and Housing Corporation, demand for rental housing will once again exceed supply in 2023 and the number of apartments available for rent has never decreased since 1988, leading to significant rent increases. (CMHC).

Strongly criticized on the subject by the opposition, the government has stepped up its announcements in recent months and plans to allocate billions of dollars to build new housing, as well as reallocate federal land to build apartments.

In mid-January, Canada announced the establishment of a cap on visas specifically for foreign students whose numbers have exploded in recent years, adding to the housing crisis the government says.