Experts question impact of foreign homebuyers ban

globalnews.ca:

Nearly a year after it came into effect, experts say it’s hard to know if Ottawa’s plan to keep foreign homebuyers out of the national housing market is helping affordability for Canadians.

The law, which bans non-resident people and enterprises from buying residential properties for two years, took effect on Jan. 1, 2023.

Global News asked Finance Canada and the Canada Mortgage and Housing Corporation (CMHC) for the most recent data showing how many Canadians and non-residents own homes in the country.

In a joint response, a CMHC spokesperson said the 2023 data is not yet available.

Two experts told Global News the ban likely would not have a large impact on housing prices because many factors affect the market and the ban impacted so few buyers.

Thomas Davidoff, a University of British Columbia business professor who studies housing, said the ban’s outcomes will likely be limited at best.

On top of that, he said, the ban only impedes a very small number of buyers, who were already effectively locked out of two of Canada’s major cities.

“It’s very unlikely that a foreign buyer ban could have a meaningful impact on affordability in Vancouver or Toronto when foreign buyer taxes have driven the fraction of buyers who are foreign buyers… down to something like one or two per cent,” he said.

Blocking those remaining buyers from the market, he continued, isn’t “going to drive affordability and it’s going to be pretty small relative to the changes in prices we’ve seen as interest rates have gone all over the map.”

Christopher Alexander, president of RE/MAX Canada, agreed with Davidoff.

The most recent Statistics Canada data shows non-residents owned 2.8 per cent of homes in Ontario and 4.5 per cent in British Columbia in 2021.