Canada bans foreigners from buying residential properties. There are exceptions

Canada Bans Foreigners From Buying Property: The steep rise in home prices in 2020 and 2021 was already reversed in 2022, much before the law took effect.

Canada Bans Foreigners From Buying Property: A Canada flag flies in Hamilton, Ontario. (Reuters)

ByMallika Soni  Published on Jan 02, 2023 

Canada banned foreigners from buying residential properties in the country amid spike in home prices since the Covid pandemic started, CNN Business reported. The law putting the rule into effect was passed by the Canadian government. This temporary two-year measure was proposed by Canadian prime minister Justin Trudeau during his election campaign in 2021.

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According to the law, an exception has been made for the immigrants and permanent residents of Canada who are not citizens, the report said. But the steep rise in home prices in 2020 and 2021 was already reversed in 2022, much before the law took effect, the report said adding that average home prices in Canada peaked just above $800,000 Canadian in February and have fallen steadily since then.

Canadian Bank is responsible for property price hikes as it continued to raise the interest rates resulting in higher mortgage rates in the country, the report said. Canadian Real Estate Association's (CREA) price index is still up 38 per cent from the end of 2019, before the pandemic, but the group said that the inventory of homes for sale has returned to pre-pandemic levels, the report said.

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The association voiced concern about the law, even with the exemptions for people who intend to move to Canada.

"As currently proposed, the prohibition on the purchase of residential property by non-Canadians can impact our reputation as a welcoming nation," the group said in a statement.

“The potential benefits of the ban are likely to be modest,” it added.

"These provide Canadians with a place to spend the winter months and are a form of savings for Canadian retirees. If Canada places a ban on Americans owning property in Canada, we should expect them to respond in kind," the group said according to CNN Business.