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Canadian Studies Affiliates Weigh in on Lifting of Foreign-Buyer Ban for New Homes
Last week, Prime Minister Mark Carney announced that his government planned to partially lift a ban on foreign purchases of residential property in Canada to encourage new housing development. The move has sparked debate among experts, who are divided over its potential effects on the country’s housing prices.
An article published on Saturday in the Toronto Star asked two Canadian Studies affiliates with expertise in housing and urban planning to weigh in on the proposed changes.
The national foreign-buyer ban was implemented under Prime Minister Trudeau in 2023. Supporters argued that the ban would help rein in Canada’s soaring housing costs by preventing foreign entities from purchasing Canadian homes as investment vehicles. Carney’s proposal would extend the ban on foreign buyers purchasing existing housing stock, but allow them to buy new construction. The move follows several years of declining home prices, with a particularly sharp drop in sales of new homes and condos. This has led to the cancellation of many housing projects in Canada’s largest cities.
Karen Chapple, director of the School of Cities at the University of Toronto and a professor emerita of City & Regional Planning at UC Berkeley, is quoted as saying that the government’s focus on foreign buyers was always misguided. She argues that the more equitable approach would be to focus on investment properties. “If we are trying to attack financialization, why aren’t we attacking where it is mostly concentrated, which is among Canadians, not foreigners?”
The tendency to blame foreigners for high housing prices is also central to the research of Taesoo Song, a former Canadian Studies Hildebrand Fellow who was also interviewed for the article. Song, now an assistant professor at Virginia Tech, received his Hildebrand Fellowship to study the effect of foreign-buyer taxes in BC and Ontario. He published the results of his research last year.
Song argues that the focus on foreign investors had racist, xenophobic, and anti-immigrant undertones, given its focus on overseas Chinese investors. His report noted that four-fifths of investor-owned properties in Canada belonged to Canadians. If the government was concerned about housing prices, it could have broadly attacked speculation without targeting noncitizens. Blaming foreigners, he argued, allowed the government to avoid addressing structural problems in Canada’s housing market or angering domestic investors and homeowners.
Photo of Toronto by Dillan Payne on Wikimedia Commons. |
