Trudeau Vows 2-Year Ban on Foreign Home Buyers If Re-Elected- May trigger selloff in many Canadian properties

Editor's Ccomments:

Ban on foreign home buyers may trigger major selloff

Quite a bold move by the Prime Minister of my country, Justin Trudeau, who has called for a quick election in September.

 I can tell you right now that with this promise to stop foreign owned purchases of Canadian properties every realtor every real estate agent most foreign buyers and foreign owners and practically everybody except the little guy will vote against him.

I'm not one to believe in anything except free trade. Let the market determine the prices and in my opinion the market in most Canadian locations is vastly overpriced.

If it does look like he will be reelected I highly recommend my Canadian friends sell their investment properties quickly.

Better move to Bali where you can buy four times the value the same price in a market that just is ready to take off again.

Housing affordability has become a central campaign issue

Conservative Erin O’Toole pledged to similarly crack down



A jogger passes waterfront condominium towers in Vancouver on Aug. 13. Photographer: Jennifer Gauthier/Bloomberg

Prime Minister Justin Trudeau promised to introduce a two-year ban on foreign home buyers to tackle housing affordability in Canada if he’s re-elected.

The proposed restriction is an attempt to cool a housing market that has soared during the Covid-19 pandemic. Surging prices have become a central issue in the campaign for the Sept. 20 vote, in which Trudeau hopes to regain a majority in parliament, with all three major parties promising crackdowns.

Justin Trudeau.
Photographer: David Kawai/Bloomberg

“You shouldn’t lose a bidding war on your home to speculators. It’s time for things to change,” Trudeau said at a campaign event in Hamilton, Ontario, about 40 miles southwest of Toronto. “No more foreign wealth being parked in homes that people should be living in.”

Outrage over housing affordability is increasingly directed at foreign buyers, especially in Vancouver, whose real estate has become increasingly popular among non-resident buyers from China and Hong Kong.

While the number of houses changing hands has declined in recent months after a pandemic-driven boom in activity, prices remain near record levels. The average cost of a home was C$669,200 ($529,840) in July, according to the Canadian Real Estate Association -- up 16% from a year ago.





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The Liberals are also proposing a ban on blind bidding, tax-free savings accounts for first-time buyers and more oversight of the real estate industry to fight money laundering. They’re also vowing to add or repair 1.4 million homes over the next four years.

“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. It’s because the deck is stacked against you,” Trudeau said at the campaign event.


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Source: Canadian Broadcasting Corp.

Erin O’Toole, leader of the Conservatives and Trudeau’s biggest rival in the election, put forward a similar plan last week. His party’s platform would ban home-buying for foreign investors living outside Canada for at least two years and refurbish 15% of federal buildings into housing.

“Mr. Trudeau’s had six years and has failed,” O’Toole told reporters in Ottawa. “We have a housing crisis that’s exploded in the last three to four years under his leadership.” 

The left-leaning New Democratic Party, meanwhile, is proposing a 20% tax on homes bought by people who aren’t Canadian citizens or permanent residents and a reintroduction of a 30-year mortgage.

Recent polls show the race between the governing Liberals and their Conservative challengers is narrowing, dimming Trudeau’s prospects for regaining a majority. Some economists say the next government should, indeed, adopt policies to reduce foreign enthusiasm for the Canadian housing market, though any permanent solutions would take time.

“I think the way everyone, political parties and Canadians, should think about housing is there is no short term solution,“ Benjamin Reitzes, rates and macro strategist at BMO Capital Markets, said by phone. “It’s a long term issue. They aren’t going to fix it in one year or with one policy.”


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