Following the surge in home prices since the Covid-19 pandemic began, Canada's ban on foreigners purchasing residential property went into effect. The Canadian government passed the law when housing prices rose following the start of the pandemic.
The popularity of Canadian homes is drawing profiteers, powerful businesses, and foreign investors, according to the party of Prime Minister Justin Trudeau's website during the recent election campaign.
Ottawa further clarified that the prohibition would only apply to city residences and not to recreational assets like summer cottages in late December. Prime Minister Justin Trudeau put out this short-term, two-year solution during the 2021 election campaign when skyrocketing housing costs made home ownership unaffordable for many Canadians.
According to a report, a legal exception has been granted for immigrants and other permanent residents of Canada who are not citizens. But even before the law went into effect in 2022, the sharp increase in property prices that occurred in 2020 and 2021 had already been reversed.
According to the Canadian Real Estate Association (CERA), the average home price in Canada reached a high of just over $800,000 in February and has been progressively declining since then, decreasing by nearly 13 percent from that high.
Like the United States and other nations that have increased rates, Canadian Bank is also to blame for price increases because it is boosting interest rates, which raises mortgage rates nationally. Although the number of homes for sale has reportedly restored to pre-pandemic levels, CREA's price index is still up 38 percent from the end of 2019, before the pandemic.
Even with the exceptions for those who intend to relocate to Canada, the real estate association expressed concern about the law. The group claimed in a statement that Canada has earned a reputation for being a cosmopolitan country.