What could happen to home prices if the foreign buyers ban expires?
The foreign homebuyers ban is scheduled to expire on Jan 1, 2027, which means home prices are at risk of rising sharply if there is pent up demand from non-residents.
A federal foreign homebuyers ban in Canada is set to expire on January 1, 2027. Real estate experts are concerned that this could lead to a surge in home prices due to pent-up demand from non-resident buyers who have been restricted for several years. However, Robert Hogue, assistant chief economist at Royal Bank of Canada, notes that foreign buyers' impact on the housing market has been debatable and has since diminished in recent years.
During the ban's implementation, non-residents owned approximately 2.75% of all properties in Ontario in 2021-2023, which dipped slightly to 2.62% in 2024. Similar trends were observed in British Columbia. Experts suggest that the effects of the ban may have been clouded by other factors such as aggressive interest rate hikes and global economic influences like Russia's war with Ukraine.
The government is currently reviewing the ban's viability, as they consider various options to address housing affordability, including building more homes on federal lands and eliminating GST on new home sales up to $1 million.
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