I remember when the federal government introduced the foreign buyer ban back in January 2023. There was a sense of hope — finally, Ottawa was doing something about housing costs. For many Canadians, especially younger buyers who had watched prices climb for years, it felt like a turning point. That hope did not last long.
We Were Sold a Promise That Was Never Kept
We are, well, past that announcement, and home ownership is still out of reach for a huge chunk of the population. Prices have not dropped in any meaningful way. The rental market is still brutal. And rather than acknowledging that the policy fell short, Ottawa doubled down and pushed the ban all the way to 2027.
As a REALTOR® who works with buyers and sellers every day, I think it is time to be honest about what the Canada foreign buyer ban has and has not accomplished and what we should actually be doing instead.
The Numbers Tell the Real Story
Here is something that rarely gets mentioned in the headlines: foreign buyers were never a dominant force in Canadian housing to begin with.
At their highest point, non-resident purchasers made up somewhere between 3% and 5% of total transactions in major cities. By 2024, that share had shrunk to about 1%. Think about that for a moment. One percent. We built sweeping national legislation around a group that represented one in every hundred home purchases.
Economists who have studied this closely are pretty consistent in their finding removing that sliver of buyers from the market has not moved the price needle in any measurable direction. That should not be surprising. You cannot solve a structural supply problem by targeting a group that represents such a tiny fraction of overall demand.
What is actually pushing housing out of reach for Canadians? A chronic shortage of homes. Municipal approval processes take years. Zoning rules that block density in neighbourhoods where people actually want to live. Development charges that get passed straight to buyers. Decades of governments at every level treating housing as someone else's problem. None of that changed when the ban came into effect.
The World Has Changed - Canada Hasn't Caught Up
Something bigger is happening globally, and Canada is missing an opportunity because of this ban.
The conflict in the Middle East has been devastating. The ongoing war in Ukraine has destabilized Europe. Trade tensions between major economies are reshaping where people choose to plant roots and invest their money. Across the world, families and entrepreneurs with means are actively looking for somewhere safe - A country with stable institutions, transparent laws, and a future they can count on.
Canada fits that description perfectly. A business owner trying to get their family out of Beirut, a professional in Dubai watching regional instability creep closer, an investor in Eastern Europe who no longer feels secure, these are people who would look at Canadian real estate and see exactly what they are searching for.
Instead of welcoming that interest and directing it into new construction, we are turning it away. Those buyers are now looking at Australia, Portugal, Singapore, and parts. That is investment capital that could be building homes in Brampton, Vaughan, and Ottawa, and we are sending it elsewhere.
Lifting the Canada foreign buyer ban on new builds, with proper safeguards in place, would let us capture some of that global demand and channel it into housing supply. That is not a giveaway to foreign investors. That is smart policy.
What Happens When Construction Slows Down
This part of the conversation gets overlooked, and it shouldn't. CMHC has been clear that Canada needs roughly 3.5 million additional homes beyond what is currently being built just to bring affordability back to reasonable levels by 2030. That is an enormous number. And yet, instead of ramping up construction, we are going in the wrong direction. Ontario housing starts dropped 7.1% in 2023 and fell another 16.5% in 2024. Part of what is driving that slowdown is that developers cannot get projects financed. Pre-sales are how builders secure construction loans; they need a certain number of units sold before a bank will lend. When you eliminate a pool of qualified buyers from the pre-sale market, deals fall apart before they start.
And when a project gets shelved, the impact spreads fast. The framing crew does not get called. The electricians and plumbers move on to other work. The concrete supplier loses a contract. The equipment rental company sits on idle machinery. Every stalled building is a cascade of lost income for working Canadians who never had anything to do with the policy.
Go one step further and think about what happens when a home does get finished and sold. That sale sends money flowing through furniture, appliance, hardware shops, landscaping, and moving businesses. These are local operations, often small and family-run, and they depend on a steady flow of new home sales to keep their doors open. Slow down construction, and you slow down everyone of them — from the appliance warehouse in Mississauga to the cabinetry shop in Vaughan.
There Is a Better Way to Do This
I want to be clear that I am not saying we should remove all restrictions and let foreign capital flow into the resale market unchecked. That is not the argument.
What I am saying is that a blanket ban is a blunt instrument that causes collateral damage without solving the actual problem. There are more surgical options available.
Australia has been doing this for years. Foreign buyers there cannot purchase existing homes - full stop. But they are allowed to buy newly built properties and pre-sales. The result is that international capital goes directly into building new supply rather than competing against local families for homes that already exist. It is a straightforward distinction that makes a real difference.
Canada could adopt the same basic approach. Allow foreign purchases on new construction only. Pair that with meaningful vacancy taxes so purchased units do not sit empty. Add occupancy requirements to make sure homes are actually being used. That framework keeps the resale market protected for Canadian buyers while opening the door to the kind of investment that actually grows supply. It is not a radical idea. It is just a smarter one than what we have now.
And for what it is worth, even inside government, there are signs that the current approach is being reconsidered. Reports from late 2025 suggest Ottawa is already looking at potential changes to the ban when it is up for review in Jan 2027. That is an encouraging sign, but 2027 is a long time to wait when the construction industry is struggling right now.
It Is Time to Build
The Canada foreign buyer ban has run its course. It did not lower prices. It did not deliver more homes. It did not make the path to ownership any smoother for first-time buyers in Toronto, Mississauga or Ottawa. What it did do is remove a source of construction investment at a time when Canada needs to be building more aggressively than ever.
Lifting the ban thoughtfully, with clear rules that direct foreign capital into new build homes, is not about giving foreign investors an advantage. It is about acknowledging that we have a housing crisis on our hands and that solving it will require us to use every available tool.
Canada has an opportunity right now. The world is looking for safe places to invest. We need homes. Those two facts should work together, not against each other.
Let's stop letting politics get in the way of building.
Sources: CMHC Housing Supply Report · Real Estate Institute of Canada · Build Canada Homes · Canadian Bar Association Research · Canadian Mortgage Professional
