Canadian developers are seeking to repeal the federal ban on the purchase of residential real estate by foreign citizens, which has been in effect since 2023. In their view, the market situation has changed dramatically: condo prices have fallen, supply has increased, and the construction industry has faced a serious slump in sales of new projects.
The ban, introduced to improve housing affordability for Canadians, expires in early 2027. If the federal government does not extend it, foreign buyers will once again be able to purchase residential real estate in Canada.
Why are developers in favor of lifting the ban?
Construction companies say the market is going through difficult times:
- sales of new condominiums remain low;
- many projects cannot secure bank financing because they do not reach the required level of pre-sales (about 70%);
- the number of new construction projects has dropped sharply, which could lead to a housing shortage by the end of the decade.
In the industry’s view, an inflow of foreign capital would help sell off some completed units and launch new construction projects.
How important are foreign buyers?
Experts believe the impact would be limited.
Realtor Tom Storey notes that before the ban was introduced, foreigners accounted for only about 5% of all homebuyers. Therefore, lifting the restrictions is unlikely to fundamentally change the market situation.
In addition, foreign investors still face high taxes:
- Ontario — the tax on home purchases by foreigners is 35%;
- British Columbia — 25%.
According to specialists, these taxes have a greater impact on demand today than the federal ban itself.
A question of trust in the Canadian market
Corcoran Horizon Realty head Cliff Rego believes the problem is not so much the number of foreign buyers as the signal Canada sends to global investors.
According to him, the ban creates the impression that the country is not interested in foreign capital, whereas the construction industry now needs any incentives to recover.
Developers fear losing buyers
Dorsay Development Corp., which is preparing to launch the One Marlborough residential project in Toronto’s prestigious Rosedale neighborhood, says it may already be forced this fall to turn away potential foreign buyers.
The company believes that every buyer matters right now, and that the ban negatively affects not only sales but also investors’ willingness to finance new projects.
A compromise is possible
Some industry representatives propose a compromise option: allow foreigners to buy only new housing, while keeping the ban on purchasing resale-market properties.
A similar model is already used in Australia and makes it possible to support the construction industry while reducing competition with local buyers in the market for completed homes.
What’s next?
The final decision rests with the federal government. If the ban is not extended, it will automatically expire in early 2027.
For the real estate market, this could become one of the key events of next year, especially against the backdrop of weak new-home sales and a growing housing supply in the country’s largest cities.
