Move to extend but adjust foreign buyer ban was the right call, says Ownright co-founder and COO
Canada’s federal government is keeping the foreign homebuyer ban in place but adjusting it to exclude newly built properties – a move that could provide a real boost new construction if executed well, according to a prominent mortgage industry executive.
Joel Fox (pictured top), co-founder and chief operating officer at digital real estate law platform Ownright, told Canadian Mortgage Professional he viewed the announcement as the most potentially significant measure for housing in the near term contained in last week’s Budget.
He said the original blanket ban had inadvertently deprived the preconstruction sector of a key source of demand: foreign investment, which has traditionally played an important role in stoking new homebuilding.
“We talk constantly about how there’s not enough homes in the country and the housing shortage,” Fox said. “And then in the same vein, we’ve had this restriction on foreign homeownership, which was actually very much floating the new build space for a long period of time.”
Non-resident foreign buyers will still be forbidden from accessing Canada’s resale market, a decision described by Fox as a sensible one that will likely boost supply while avoiding the reemergence of concerns around speculative purchasing.
There’s still a risk, though, with the move: namely, that outside buyers might simply purchase units and leave them vacant, a trend that drew significant criticism before the ban was introduced and factored among the Trudeau government’s main reasons for first implementing it in early 2023.
“What we can’t afford, or what we don’t want to have happen, is that those places just sit empty,” Fox said. “Ideally those are occupied by either the owners or made available for rent.”
Feds prioritize long-term thinking rather than short-term solutions
The budget also included a reported $45 billion commitment to housing measures over the next decade, a pledge that Fox said was significant even if it offers little immediate relief to buyers and industry professionals hoping for a swift bounce-back in market activity.
“There’s no doubt that this budget is built to make long-term impacts n the housing market, and it certainly falls short of making a near-term impact,” he said. “In a lot of ways, I actually think that’s the right approach.”
Measures to improve housing affordability in the short term have been a staple of previous governments, but many have proven fruitless or ultimately been scrapped.
Among the most noteworthy of those was the First-Time Home Buyer Incentive, a shared-equity scheme operated between 2019 and 2024 that mortgage industry members said had little uptake – particularly in pricier markets.
Fox said previous governments had been “guilty of making short-term corrections that don’t necessarily net out over the long term” and that the current budget reflected a better philosophy, one that accepts the housing crisis won’t be solved quickly.
“The resolution to our housing issues isn’t going to come from short-term measures that temporarily move the needle,” he said. “It’s a long-term belief that we need more housing.”
Trade war takes government's main focus away from housing
While the foreign homebuyer ban extension and adjustment drew headlines, housing was far from the main focus of the budget – particularly with the US-Canada trade war rumbling on and the federal government still taking steps to deepen Canadian trading relationships away from the US.
Strengthening the economic outlook and in turn building up consumer confidence are important, Fox noted, more so than potential measures to help more Canadians into homes in the immediate future.
“Whatever those short-term measures might be addressing isn’t really addressing the bigger picture, which is the broader economic uncertainty that’s being driven by south of the border,” he said.
Prime minister Mark Carney’s efforts to diversify Canada’s trade dependence beyond the US are, in Fox’s view, a strategy that will pay off over time, even if the impact isn’t immediately apparent.
“A lot of the stuff that Carney and his government are doing to build trade relationships with countries outside of the US – I believe that’s going to compound over time to build confidence back up,” he said. “But again, it’s all a long game.”
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