CNN reported on the 1st (local time) that the Canadian government is banning foreigners from buying houses in Canada starting this year. The new law, which came into effect on the 1st, will make it impossible for foreigners to purchase a home in Canada for investment purposes for the next two years.
This is based on the judgment that foreign investors have triggered the rise in Canadian housing prices. Home purchases by immigrants and permanent residents are not restricted. The surge in house prices in 2020 and 2021 had already reversed last year, before the law went into effect. The median house prices in Canada have fallen by 13 per cent from a peak of C$800,000 in February.
While prices are still up more than 38% from the end of 2019, home sales have fallen to pre-pandemic levels. Accordingly, the Canadian real estate industry is concerned that the effect of this law will freeze the housing market. It could also spark sparks for Canadian retirees looking to buy winter homes in the US and Mexico. Canadians are the largest number of foreigners buying homes in Florida and Arizona.