Buying a residential property in Canada has become almost impossible for foreign investors, at least for the time being. It has been reported that the country has placed a ban on homes being sold to foreigners as investments.
The new law has come into force from this year onwards, ie January 1 2023. The fresh regulation bars foreigners from purchasing residential real estate as investments for two years, according to a report by CNN Business.
The new law was brought in as the prices of real estate in the country were peaking since the pandemic started spreading its wings. The legislators in the country were of the view that foreign buyers were purchasing homes as investments big-time in the country, pushing up the prices considerably.
But, the new legislation does not apply in the cases of immigrants and permanent residents of the country, who have not become citizens.
The lure of Canadian residential properties proved to be too hard to resist for rich corporations and foreign investors, as per the campaign website of Prime Minister Justin Trudeau’s party.
“This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors,” the website reported further.
If the estimate of the Canadian Real Estate Association (CREA) is anything to go by then average home prices in Canada rose merely above $800,000 Canadian in February and have come down since then, a fall of close to 13 per cent from the peak, as per a CNN Report.
However, CREA had a few words of caution as well. It said that Canada has always positioned itself as a multicultural nation accepting people from across the globe without any caveats. And the curb on property buying goes against the country’s image as a welcoming place.
The realty group added further that the ban has the propensity to trigger a backlash by the United States and Mexico, which could restrict purchases in the respective countries by Canadian citizens.