The federal government has imposed a ban on most foreign homebuyers in a bid to calm the housing market.
Deputy Prime Minister and Minister of Finance Chrystia Freeland announced the plans in the recent federal budget reveal.
Freeland said: “We will make the market fairer for Canadians.
“We will prevent foreign investors from parking the money in Canada by buying up homes.”
By implication, it is now illegal for foreigners to buy residential properties like condos, apartments, and single residential units in Canada over the next two years.
However, students, foreign workers, permanent residents, and foreigners that are buying their primary residence in Canada will be exempted from the measures.
It should be recalled that Prime Minister Justin Trudeau asked his cabinet to create a temporary foreign homebuyers ban last year.
Now that it has been realized, the true test is if it can address the increasing cost of housing amid the inflation rate in Canada which surges at a historically fast pace.
Statistics Canada’s latest report reveals a 6.6% increase prices of homes, the fastest pace since 1983. This witnessed an increase for both owned and rented homes or apartments.
In addition to that, the overall cost of living has risen, as such, Canadians have to spend more on gas, food, and appliances since the start of the year.
According to a recent report, this economic situation has made millennials put plans to buy a home on ice.
As expected, the government will spend $10 billion over the next five years to ease housing affordability in Canada.
