Canada is banning many foreigners from buying homes in the country for at least 2 years, in an attempt to mitigate the country’s soaring home prices.
The ban, which was part of Prime Minister Justin Trudeau’s re-election campaign in 2021, went into effect on January 1. It prohibits buyers who are not Canadian citizens or permanent residents.
But there are a number of notable exceptions, including international students who have been in the country for at least 5 years, people who can claim refugee status, and temporary work permit holders.
Canada has one of the most expensive housing markets in the world, above the US and the UK, according to a Statista analysis.
Since 2013, the cost of buying a home in the country has increased 48%, from an average price of 522,951 Canadian dollars to 777,200 Canadian dollars, the BBC reported. Meanwhile, the median after-tax income of Canadians increased only 9.8% between 2015 and 2020, according to the BBC.
“The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” Trudeau’s campaign website said last year, according to CNN Business. “This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors.”
But some critics are skeptical that the ban will have any real effect on easing the housing crisis.
“The potential benefits of the ban are likely to be modest,” The Canadian Real Estate Association said in a statement, according to CNN Business.