But experts argue restricting foreign investment in new builds may undermine efforts to meet Canada's housing goals
A strong majority of Canadians support the federal government’s decision to ban foreign buyers from purchasing residential properties, but a housing expert says that the policy could worsen long-term affordability by cutting off access to much-needed development capital.
About 76% of Canadians support the federal ban on foreign real estate purchases, which is currently in effect until January 1, 2027, according to a new survey from Research Co. The poll shows broad consensus across the political spectrum, with 82% of Conservative voters, 78% of Liberal voters, and 78% of New Democrat voters backing the policy.
Despite the overwhelming support, some economists argue the measure may be counterproductive, particularly as housing supply continues to lag behind population growth.
Brendan Ogmundson, chief economist for the British Columbia Real Estate Association, says that allowing foreign buyers to purchase newly built units could be a way to inject capital into the market without impacting affordability in the resale market.
“If we want to build the amount of housing the province is targeting over the next decade, we’re going to need capital from a lot of places,” Ogmundson told 1130 NewsRadio. “We’re not going to be able to finance all the presales or investments in rental or land just from domestic sources alone.”
He emphasized that limiting foreign ownership only to pre-sales and new construction could help developers move forward with projects, many of which are currently stalled due to financing constraints and low sales.
With mortgage payments now consuming between 40% and 60% of household income in B.C., the affordability crisis is deepening.
“The only way we can bend that curve and get price growth below income growth in the long term is to build a lot more housing and slow the rate of long-term price growth,” Ogmundson said. “If we can’t do that, it’s really hard to fix affordability.”
He warned that restricting capital today could stall housing starts, leading to another supply crunch in just a few years, a pattern Vancouver has seen before.
“That helps out a few people that can get into the market in the next year or two. But it also means future projects maybe don’t start, and... we have a huge shortage of housing again.”
Skepticism toward developers
The Research Co. poll also found that only 33% of Canadians trust for-profit developers to build affordable housing.
Meanwhile, nearly six in 10 respondents believe that immigration levels should be tied to affordable housing targets and new housing starts, with support strongest among BC residents and Liberal voters.
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Canada’s ban on foreign buyers applies to residential purchases in major cities and includes a 20% tax in British Columbia.
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