Photo: PixabayA new law that forbids foreigners—foreign companies as well as individuals—from purchasing residential properties went into effect in Canada on January 1. The ban, which will last two years, was put in place to safeguard Canadians in the middle of the housing crisis by giving them more access to affordable properties. Some groups, such as immigrants, residents, foreign workers with temporary work permits, refugees, and foreign students, will be excluded from the prohibition.
The reason for this ban is the sharp jump in the prices of residential real estate in Canada since the beginning of the pandemic, which has left many Canadians unable to afford to buy a home. The average price of a house in Canada reached $590,000 in early 2022. Although this price dropped to $450,000 in December last year, it is still out of reach for the majority of citizens.
Demand continues to outpace supply in Canada, as it does in many other countries around the world, which inevitably results in increased costs. And as some Canadian politicians believe, most of the responsibility for the sharp increase in prices falls to foreign investors who purchase residential properties in Canada not to live in them but rather as investments.
The Canadian Real Estate Association is concerned that this ban will negatively affect Canada's image as a multicultural country that welcomes people from all over the world. The CREA also states that this measure could provoke a reaction from the US and Mexico to introduce reciprocal bans since Mexico, Florida, and Arizona are the states where many Canadians purchase properties for winter residence.
Source: Blic Biznis, CNN
