Understanding the Impact of Canada's Foreign Buyer Ban: What It Means for You
Hello,
It has been brought to my attention recently that some people are not aware of the Foreign Buyer Ban in Canada, and ultimately what that means to you as a potential Seller of real estate, and how it has affected the market. A Foreign Buyer is someone who is not a citizen of Canada, nor has a Permanent Residency card.
In 2022 the Federal Government introduced the ban in an effort to create "affordability" in the real estate market, fearing that Foreign Buyers were driving up the prices.
As with nearly all legislation around real estate, there are exceptions to the rule, but it was to target primarily residential real estate purchases, and in certain areas of the country. I've attached a couple of articles for further reading.
https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/consultations/prohibition-purchase-residential-property-non-canadians-act
https://www.canada.ca/en/department-finance/news/2024/02/government-announces-two-year-extension-to-ban-on-foreign-ownership-of-canadian-housing.html
Now, I cannot say for sure that the ban hasn't had an effect on pricing in some small way, but an article I read stated that less than 3% of all primary residential sales were foreign buyers
"CMHC data reveals that only two per cent of real estate purchases in 2021 were made by non-Canadians, according to communications obtained by Global News through Access to Information.
A few months after the ban was put into place more exemptions were added. These included students, first-time buyers and properties under $500,000.
"There were so many exemptions to the foreign buyer ban that it really didn't make any difference at all," said Tim Sabitov of Team 3000 Realty Ltd., in Vancouver."
As it appears that the foreign buyers were such a small percentage of the Buyer pool, there really has not been a major effect in affordability because of it. Other factors potentially, but not this one.
So what does that mean for Sotheby's clients if Foreign Buyers cannot purchase here until Jan 2027(current policy).? Well, we market your home to the world because there are hundreds of thousands of Canadians working abroad, and the expectation is that some of them will come back! We want those people to see your home through the Global marketing that is available to our clients. Many different online platforms distribute our listings to them, in nearly every major city and larger country in the world.
And, as 2027 gets closer, those Foreign buyers who are planning on coming into Canada or investing here will be checking out the real estate available to them where-ever they search for that information. Keep that in mind if you're not quite ready to sell, but you see a change over the next couple of years.
I hope you found this interesting or useful. And we really hope that you've had an awesome summer to date, and are able to enjoy the sunshine with the cooler breezes. And if you go to the PNE this year - we'd love to hear about it.
Thank you for being here. Your support means everything.
As always, your friendly neighbourhood realtors,