Canada bans foreigners from buying residential properties

New Delhi: In the face of rising home prices, Canada banned sale of residential properties to foreigners.

The ban that came into effect on Sunday however offers some exceptions for immigrants and permanent residents of Canada, who are not citizens, according to a report by CNN.

A surge in property prices following the pandemic has prompted the government to impose the ban.

Debates over the rising prices show politicians pointing fingers at buyers for ‘snapping up the supply of homes as investments’.

Prime Minister Justin Trudeau's campaign site last year stated the desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors.

It further said that the situation is ‘leading to real problem of under-used and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors’.

The government’s step to harness the property markets comes when prices for homes are already showing downward tendency.

The steep rise in home prices in 2020 and 2021 was already reversed in 2022, says a report.

Home prices that surged upwards of $800,000 Canadian in February 2022 has come down by nearly 13 per cent, according to the Canadian Real Estate Association (CREA).

Meanwhile, the Bank of Canada has been revising interest rates upwards, causing higher mortgage rates in the country.

Many believe that the government decision to restrict home buying could prompt the US and Mexico to ban home purchases by Canadians in those countries.