Real Estate

Canada’s Trudeau Proposes Ban On Foreign Homebuyers

Amid the ongoing coronavirus pandemic and with an election looming next month, Canadian Prime Minister Justin Trudeau this week proposed a two year ban on foreign homebuying in his home country.

Trudeau laid out his housing pitch during a campaign stop in Hamilton, a city outside of Toronto, according to Reuters. The proposed two-year ban on foreigners buying houses in Canada was perhaps the most eye-catching feature of the pitch, which could go into effect if Trudeau’s party wins a majority in the upcoming election.

Other features of the proposal reportedly included a tax-free savings account for younger buyers, an anti-flipping tax, and a ban on so-called “blind bidding” in which buyers submit offers without knowing how much other consumers offered.

“You shouldn’t lose a bidding war on your home to speculators. It’s time for things to change,” Trudeau said, according to Bloomberg.

Canada is scheduled to hold an election on Sept. 20. According to Reuters, Trudeau’s Liberal Party of Canada had previously been poised to secure a majority but has more recently fallen behind the Conservatives. Reuters characterized the new housing proposal as Trudeau’s attempt to “revive his election prospects.”

Housing in Canada, and elsewhere in the world, has become a contentious issue durning the pandemic. As lockdowns proliferated and many people began working from home, some areas saw surging demand and soaring prices.

In the U.S., suburban and rural communities — where homes generally offer more space for less money — have been particularly popular, while major urban areas such as New York and San Francisco saw demand cool.

In Canada, concerns about a limited supply of homes has fueled outrage over foreign buyers, according to Bloomberg. That is reportedly especially true in Vancouver, which has long attracted consumers from other parts of the Pacific Rim such as Hong Kong.

According to a recent report from Canadian Real Estate Association (CREA), the average home price in Canada in June was 679,000 Canadian dollars, up 25.9 percent year-over-year. The report further notes that the Vancouver and Toronto areas are “two of Canada’s most active and expensive housing markets.”

It remains to be seen what will happen during next month’s election, though political parties other than Trudeau’s have also pledged to address housing issues. And in the meantime Trudeau continues to make his pitch for housing regulation.

“It’s not OK that the communities you grew up in aren’t in places where you can build a life, raise a family or grow old,” he said at the event, according to Bloomberg. It’s because the deck is stacked against you.”

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