Executive says federal government shouldn't consider renewing policy amid a sluggish housing market
With Canada’s ban on non-residential foreign homebuyers expiring in January, a leading real estate executive says it’s time for the federal government to shelve the program and open the housing market back up to buyers from outside the country.
Don Kottick (pictured top), president of RE/MAX Canada, told Canadian Mortgage Professional he sees the measure, which was introduced in 2022 and renewed in 2024, as a hindrance to home construction and a drag on an already flailing housing market.
His comments arrived the same day federal finance minister Francois-Philippe Champagne said the government was “considering the options” on extending the ban as its expiry looms.
“I think if you look at the foreign buyer ban and the negative impact that it had on preconstruction, it took a lot of money out of the market that would have driven more preconstruction, more units coming on the market,” Kottick said.
“So hopefully [if[ that is removed in January, we start to see more investment coming back, which could drive affordability.”
Opinion split on whether ban should remain in place
Mortgage and real estate industry opinion on the ban is divided, with respondents to a recent CMP poll indicating that they thought it should stay in place and other industry experts calling for its removal.
Kottick said he’s not in favour of the federal government intervening in the market. “We’ve had governments that have always tried to bring policy. Policy will never fix the market,” he said. “I think when the government intervenes, we have unintended consequences.
“Hopefully the government has learned a lesson that natural market forces have been more beneficial than any government policy – because there’s always been unintended consequences.”
Champagne’s Wednesday comments gave little clue as to whether the government would extend, adjust, or end the ban.
“That’s a measure… that has been in place for some time. The market is evolving,” he told reporters. “We’re looking at all the options that we have in front of us, considering where the market is going, what has happened over the last few years, always keeping in mind that we want to make sure that we have a higher stock of housing opportunities for Canadians.”
National market slows, but affordability concerns remain
When the ban was first proposed by then-prime minister Justin Trudeau during the 2021 federal election campaign, the pace of homebuying activity in Canada was red-hot, spurred by record-low interest rates during the COVID-19 pandemic.
But the national purchase market has since slowed considerably – partly because interest rates are now much higher, and partly because of the economic uncertainty that’s gripped Canada amid trade tensions and recession fears.
Affordability, though, also remains a significant concern for many homebuyers, and a majority of Canadians polled last year (76%) said they support keeping the ban in place.
Kottick pointed to significant headwinds currently impacting the housing outlook including the ongoing US-Canada trade war, oil price volatility, and uncertainty around interest rates.
But he said homebuyers who can afford to make a move could be facing a limited time window to get a deal done, particularly with rates on the rise and expected to climb higher in the coming months.
“I’m hearing that rates have pretty much hit the bottom. There’s talk that into 2027, we’re going to see rates start creeping up again,” he said.
“I think right now, there is this window of opportunity for buyers. You can never time the bottom, but it sure would appear that in terms of where interest rates sit, this is not a bad time to jump back in. And I think that will probably come to light.”
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