Experts doubt foreign buyer ban extension will help affordability
Over the weekend, Ottawa quietly extended its foreign homebuyer ban until 2027.
But some experts question whether it will make any difference to affordability in the Lower Mainland.
“The analogy I like to draw is a lemon that has had all the juice squeezed out of it by the foreign buyer taxes here, and by the empty homes and speculation taxes, so no real room for this to have an effect on affordability,” economist Tom Davidoff with the University of British Columbia’s Sauder School of Business said Monday.
In 2021, the year before the foreign buyer ban was announced, roughly 1.1 per cent of sales in B.C. involved a non-Canadian buyer.
"Notably, in 2023, prices basically rose steadily from the start of the year, so as soon as the ban was in effect, we had nothing but rising prices,” said Brendon Ogmundson, chief economist for the BC Real Estate Association. “So, as a sort of salve for affordability, it certainly is not a very effective policy."
And given the other measures in place locally, Premier David Eby offered a muted response to the ban’s extension.
“I don’t expect the extension of the federal foreign buyer ban to have a significant impact on the housing market in British Columbia as a result, but it may have an impact in other provinces where they don’t have these protections,” Eby said Monday.
While B.C. brought in a foreign buyer tax in 2016, the federal government only decided to implement a ban in 2022 – after local measures had already changed buyer behaviour.
“Canada, federally, is a little bit late with this foreign buyer ban, and a two-year extension just seems like a little bit of a fluff – maybe there’s an election coming up or something like that,” remarked David Hutchinson, a Vancouver realtor.
But others feel some restrictions around real estate are appropriate – and needed – even beyond this ban.
“There is going to be a needed national discussion about how you work with people who have second, third and fourth homes, who keep them empty,” said Andy Yan, director of the City Program at Simon Fraser University.
One area of focus for some researchers is what to do with people who clearly have significant wealth, but don’t contribute much tax.
“I think there are sensible demand-side measures,” Davidoff said. “There’s lots of homes that are occupied by Canadians really not connected to the local labour market, so not foreign buyers, but homeowners who are very affluent, but not through the work force.
“A lot of these people who own very fancy homes and are obviously very rich, but pay very little tax in Canada.”
Along with other researchers, Davidoff has calculated if there were a requirement on the owners of the top 10 per cent of homes by value to pay at least one per cent of property value in taxes to Canada and the province, that could generate $2 billion in each of Metro Vancouver and the Greater Toronto Area.
CTVNews.ca Top Stories
From AI running wild to collapsing ecosystems, government report outlines future disruptions
From artificial intelligence running wild to collapsing ecosystems, a new Canadian government report outlines 35 disruptions that could rattle the country in the near future.
B.C. serial killer Robert Pickton hospitalized after prison attack
British Columbia serial killer Robert Pickton was attacked and sustained life-threatening injuries in a Quebec prison Sunday in what officials described as a 'major assault.'
opinion Tom Mulcair: With Trudeau spiralling, Mark Carney waits in the wings
In his latest column for CTVNews.ca, former NDP leader Tom Mulcair argues that if there's an unofficial frontrunner in the eventual race to replace Justin Trudeau as Liberal leader, it has to be former Bank of Canada governor Mark Carney.
Toronto Blue Jays fan struck by 110 m.p.h foul ball offered tickets, signed baseball by team
The Toronto Blue Jays have offered tickets and a signed baseball to a fan who says she was struck in the face by a 110 m.p.h (177 km/h) foul ball at Friday’s game.
Matthew Perry's death is being investigated over ketamine level found in actor's blood, reports say
An investigation has been opened into the death of Matthew Perry and how the “Friends” actor received the anesthetic ketamine, which was ruled a contributing factor in his death.
OPP continues to investigate boat collision north of Kingston, Ont. that left 3 people dead
Ontario Provincial Police continue to investigate a long weekend fatal boat collision on Bobs Lake, north of Kingston, Ont.
Police in Ontario say suspects charged in armed home invasion near Toronto part of 'larger criminal network'
Police in Ontario say a group of suspects charged in an armed home invasion north of Toronto last year were driving a vehicle stolen in a carjacking in Calgary just one month earlier.
Stolen septic truck swerves through traffic, spike belt needed to stop it: Manitoba RCMP
A 29-year-old woman has been charged after police say she stole a septic truck from a Manitoba community and drove erratically on the highway.
Orphan orca's extended family spotted off northeast side of Vancouver Island
Members of a killer whale pod related to an orphan orca calf that escaped a remote British Columbia tidal lagoon last month have been spotted off the northeast coast of Vancouver Island.