New rules in Canada restrict foreign real estate purchases
As of Sunday, it is now illegal for foreigners to purchase residential properties in Canada. This legislation, which is in place for a two-year period, aims to make more homes available to local Canadians who are struggling with a housing shortage.
There are some exceptions to the law, such as for refugees and permanent residents who are not citizens, and it only applies to city dwellings and not to recreational properties like vacation homes.
The law was introduced by Canadian Prime Minister Justin Trudeau during the 2021 election campaign in response to the high cost of home ownership for many Canadians.
The Canadian Real Estate Association has reported that average home prices in the country have decreased from a peak of around CAD 800,000 (approx. USD 590,000) at the beginning of 2022 to just over CAD 630,000 (approx. USD 465,000) last month.
Some experts believe that the ban on foreign buyers, who make up less than 5% of home ownership in Canada according to the national statistical agency, will not be effective in making homes more affordable and that the solution to the housing crisis is to increase the construction of new homes to meet demand.