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.
The federal foreign homebuyers ban in Canada is set to expire on January 1, 2027. Economists are uncertain if home prices could surge if the ban ends due to pent-up demand from non-resident buyers who have been locked out for several years. Foreign investors might have contributed to housing affordability issues in particular urban areas like Vancouver and Toronto in the past, but evidence of their impact has been debated.
Canada's housing market has undergone significant fluctuations since the COVID-19 pandemic, with rapid price increases fueled by low interest rates and bidding wars. The Bank of Canada raised interest rates to cool the market, and the federal government banned foreign buyers in 2023. Despite a slight decline in non-resident property ownership in 2024, it is unclear whether the ban had a significant effect on housing affordability.
The government is reviewing the ban's future, considering various options, as it aims to ensure a sufficient housing supply for Canadians.
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