On The 1st of January 2023, Canada passed a law that essentially stops foreigners from buying any residential property in Canada for the next two years. This all has its beginning in the early days of the COVID-19 pandemic when the world was pushed into lockdowns and the Canadian government brought down the interest rates to appease everyone into starting spending again.
It worked! In fact, it worked a bit too well, and soon the markets were flooded with people wanting to buy properties left right, and center. This frenzy caused a deficit in availability resulting in the prices going up exponentially quite quickly. The government tried to intervene by raising the interest rates gradually resulting in steep interest rates within a year.
Some speculated that this was all due to foreigners also interested in Canada’s growth and buying properties in Canada just for the sake of investments, robbing Canadians of their right to buy a home at affordable prices. The law restricting foreigners from buying a property comes across as a shock. Canada’simplementation of a ban on foreigners purchasing property could potentially have a negative impact on the country’s image internationally.
For one, such a ban may be perceived as discriminatory and unwelcoming to foreigners, which could deter people from wanting to visit or invest in the country. This could have a negative effect on tourism and foreign investment, both of which are important drivers of the Canadian economy. Additionally, a ban on foreign property purchases may be seen as protectionist and inward-
looking, which could damage Canada’s reputation as an open and inclusive society. This could lead to a decrease in international goodwill and cooperation, as other countries may view Canada as less friendly and welcoming. It’s worth noting that there are already some restrictions in place on foreign property purchases in Canada, such as the requirement for foreign buyers to obtain government approval before purchasing real estate. However, a complete ban on foreign property purchases would likely be seen as a significant escalation of these measures and could have much more significant consequences. Even Canadians buy property in other countries as vacation homes and winter homes to get away from the frigid cold of Canada. Canadians also buy property in other countries as an investment. Isn’t it a bit too narrow-minded to think only Canadians should be able to buy in other places while Canada bans foreigners from buying property in Canada.
Ultimately, the decision to implement a ban on foreign property purchases in Canada would need to be carefully weighed against the potential negative impacts on the country’s image and economy. The impact that the policymakers are hoping for, in the form of providing affordable housing, might still be out of reach or modest in reality. Canada truly needs to retrace its steps a bit and take a long hard look at what it wants to achieve and how to do it in a manner that does not hurt its reputation.