Justin Trudeau to ban foreign home buyers if reelected

Canada’s prime minister vows to block overseas property investors if he is re-elected

Trudeau has promised to put a two year ban on foreign home buyers if re-elected (AP)

Prime Minister Justin Trudeau has promised to put a two-year ban on foreign home buyers if he is re-elected, in a bid to address the affordability of homes in Canada.

The nation’s housing market has soared during the coronavirus pandemic, up 16 per cent year on year, according to the Canadian Real Estate Association (CREA). The Liberal party is one of the three main parties focused on this central issue.

“You shouldn’t lose a bidding war on your home to speculators. It’s time for things to change,” Mr Trudeau said during a  campaign event in Hamilton, Ontario. He vowed that “no more foreign wealth” would be invested in homes “that people should be living in”.

Property in Vancouver and Toronto has been increasingly attractive to buyers who do not reside in Canada, due to an open-door policy for investors, low-interest rates and a desire for larger houses, inspired by lockdowns. Non-residents have almost the same ownership rights as permanent residents.

According to past government statistics, obtained by The Globe and Mail in 2017 with a freedom of information request, an estimated 70.6 per cent of foreign buyers are from China, followed by 4.6 per cent from America and 3.6 per cent from India. More recently, Hong Kongers looking for an escape, following clampdowns and protests, have been interested, along with Middle Eastern and Russian buyers. The average Canadian home was valued at $688,000 in May rising by more than 38 per cent in the past year, according to CREA.

“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,” said Mr Trudeau.

Leader of the Conservative party, Erin O’Toole, has also promised a two-year ban on foreign property investors living outside Canada. He also plans, if he is elected, to refurbish 15 per cent of federal buildings and convert them into housing.

The New Democratic Party is instead proposing a 20 per cent tax on homes by overseas investors who do not reside in Canada, and will re-introduce 30-year mortgages.