Canada has banned outsiders from purchasing real estate properties on their land. Considering the high price rise, it had been difficult for the residents to find houses in their homeland at an affordable range. Besides this, the cause is often a spike in market prices that obligates the government to take strict actions. Therefore, Canadian prime minister Justin Trudeau has passed 2 years of a temporary ban.
Canada has become one of the 8th largest countries worldwide, with 8.3 million migrants. The share of such foreigners is considered to be 23% of the total population. It also has the potential with the highest ratio of industrialisation among western nations that have made foreigners own properties in this foreign land.
The new norm prohibits permanent residents and immigrants from investing in Canadian properties. However, a price hike in housing services was witnessed in 2020 and 2021. Whereas the reversed pricing took place in 2022, even before the law was imposed. To be noticed, the average price range of houses in Canada costs $800,000 and above, with the highest rise. Since February, there has been a drastic fall in the price mechanism.
Experts say the rise in house prices is Canadian financial institutes’ responsibility. Due to the rise in interest rates on home loans and mortgage rates, the market has to face high-priced policies. Before the pandemic hit the nation, Canadian Real Estate Association displays a 38% rise in the price index since 2019. This forced the authorities to raise concerns against the new policy to safeguard foreign investors’ interests.
The group claimed,”As currently proposed, the prohibition on the purchase of residential property by non-Canadians can impact our reputation as a welcoming nation,”. In addition, “The potential benefits of the ban are likely to be modest,” they said.
“These provide Canadians a place to spend the winter months and are a form of savings for Canadian retirees. If Canada places a ban on Americans owning property in Canada, we should expect them to respond in kind,”.
Currently, after the law has been passed, there have been multiple criticisms going on from each group. It is easy to speculate the upcoming changes in the wholesome real estate market that will see a rapid spike in pricing.
