Liberals Promise 2-Year Ban on Foreign Home Ownership, Grants for First-Time Homebuyers in Effort to Address Housing Affordability
In an effort to cool the red-hot housing market, Prime Minister Justin Trudeau has vowed to implement a 2-year ban on real estate purchases by foreign nationals, as well as make it easier for first-time Canadian homebuyers to purchase a home through grants and loans.
Although the number of properties changing hands has cooled in recent months, prices remain at historically elevated levels, causing frustration among first-time homebuyers. According to recent data from the Canadian Real Estate Association, the average price of a home in Canada has risen 16% from July 2020, to $669,200. Soaring home prices have become a central issue throughout the federal election campaign, with all three major political parties vowing to implement some form of new regulations.
Vancouver in particular, has become a real estate hotspot for non-Canadian homebuyers from Hong Kong and China, “You shouldn’t lose a bidding war on your home to speculators,” Trudeau said during one of his campaign stops. “No more foreign wealth being parked in homes that people should be living in.”
The Liberal Party is also proposing to earmark $1 billion in loans and grants to help develop rent-to-own projects, a tax-free savings account for first-time homebuyers, as well as allocate $4 billion to help large cities construct 100,000 middle-class homes by 2025. In addition, Trudeau has also proposed a ban on blind bidding, as well as implement added regulations in the real estate industry to address money laundering.
The Conservative Party has revealed a similar plan during the election campaign, also promising to ban foreign home ownership for at least two years, as well as overhaul 15% of all federal buildings into affordable housing. The New Democratic Party has proposed to introduce a 20% tax non-Canadians purchasing property in the country, as well as bring back the 30-year mortgage.
Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.