Canada Shouldn’t Weaken the Foreign Buyer Ban

Commentary

In late December, Canada’s Housing Minister Gregor Robertson said in an interview that the federal government will keep the ban on non-Canadians buying houses for 2026—but may loosen the rules after that.

The ban first took effect in January 2023 under the Trudeau government, in response to deep concern among the Canadian public over increasingly unaffordable housing costs.

Robertson’s statement was picked up by some in the real estate analyst community on X, but otherwise garnered very little attention; it came out just days before Christmas, when most Canadians had better things to do than think about real estate regulations.

Loosening Canada’s foreign buyer ban is a dramatic move that merits a fulsome debate. After all, this policy touches on a fundamental question: Who are Canada’s houses for?

In discussing revisions to the ban, Robertson did not delve into specifics, but mentioned taking inspiration from Australia, which prohibits foreign nationals from buying existing housing, but exempts projects that “significantly increase housing supply or support the availability of housing supply.”

If Canada follows Australia’s example, modifying our foreign buyer ban would likely come in the form of an exemption for newly built and pre-sale housing. This is precisely what many developers have been calling for, with the housing industry finding it difficult to remain profitable as demand for small condo units collapses, and new projects struggle to get off the ground.

In July 2025, major players in B.C.’s real estate and construction industry sent an open letter to the federal and provincial governments. They called for a loophole in the foreign buyer ban for pre-sales and new builds, specifically pointing to Australia as an example.

The letter claims that foreign investment is needed for many new projects to go ahead, citing the fact that “approximately 1 in 10 newly built condos (post-2016) are owned by foreign buyers.”

The message from the big housing industry players is clear: reopen the flow of foreign capital to jump-start the stalled condo market. But many housing analysts heartily disagree.

Also in July 2025, 27 housing experts—architects, urban planners, professors, and more—penned a duelling open letter to the federal government begging Ottawa to do just the opposite: “Do not reintroduce foreign capital or investor demand to reflate prices artificially.”

The letter argues that Canada’s housing market is experiencing a “market correction” that could be used “as an opportunity” rather than “something to resist,” urging the government to not “bail out overleveraged speculative developments.”

Despite these warnings, the housing minister’s comments indicate that the federal government is leaning towards reopening Canada’s housing market to foreign capital. This is unfortunate, because the available data supports the common-sense notion that cooling demand by restricting foreign buyers lowers house prices.

A study by the University of British Columbia’s Sauder School of Business published in 2023 found that B.C.’s 15 percent foreign buyer tax introduced in 2016 had a significant cooling effect on the real estate market.

After the tax was imposed, house prices fell by 6 percent in neighbourhoods with high concentrations of foreign buyers. Even more dramatically, the overall share of foreign buyers collapsed from 13.2 percent of single-family transactions in the six weeks before the announcement of the tax to a mere 1.7 percent in the three months after the tax.

A 2022 study published in the Journal of Housing Economics found that Ontario’s decision to impose its own foreign buyer tax on Toronto in 2017 triggered a decline in house prices by as much as 7 percent to 9 percent.

The foreign buyer ban is one of a small handful of Canadian policies that can boast of not only majority support, but cross-partisan and cross-ethnic support.

An April 2025 poll by Research Co. found that an overwhelming majority of 76 percent of Canadians support the foreign buyer ban, while just 13 percent oppose it.

The ban is supported by 82 percent of Conservative voters, 78 percent of Liberal voters, and 78 percent of NDP voters, according to the poll. This view is shared by South Asians (87 percent), indigenous people (84 percent), Europeans (77 percent), and East Asians (74 percent).

Far from watering down the foreign buyer ban, the policy could be greatly strengthened by closing two glaring loopholes: temporary residents, such as international students and foreign workers, can still buy houses, and the ban only applies to urban centres.

Indeed, Canada could boost affordability by extending the ban on foreign buyers beyond purely residential properties to include farmland—particularly in light of the troubling situation taking place on Prince Edward Island, where a China-linked Buddhist group has allegedly bought up over 17,000 acres of land.

Canada could also further cool demand in the residential housing market by taking inspiration from the Trump administration’s Jan. 20 executive order titled “Stopping Wall Street From Competing With Main Street Homebuyers” that bans large institutional investors from buying up single-family homes.

These are just some of the many paths Ottawa could take to codify the principle that Canada’s houses must first and foremost be for Canadian families.

One thing is for certain: weakening the foreign buyer ban and ushering foreign capital back into the Canadian housing market would be a major step backwards.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.