It’s a controversial suggestion that isn’t about to go away, with new calls for a ban on property buying by foreigners -- increasingly faulted for outbidding local investors.
The Financial Post’s right-leaning columnist Diane Francis is the latest to float the idea of dramatically clawing back the buying privileges of foreign nationals, whether they reside in Canada temporarily or seek to plant their investment flag in a country they’ve never called home.
More specifically, Francis is asking any temporary resident — a person with a work permit — be restricted to one owner-occupied residence, which must be sold when he or she leaves the country. That temporary resident would also be banned from buying any investment property for the purpose of leasing it.
The ban is all but complete for non-resident foreigners wanting homes or investment properties.
“The only exception is if a foreign entity doing business … wants to buy housing for its Australian staff,” she writes, referencing Australian law introduced in 2010 and advocating it as a model for Canada.
The suggestion echoes some Canadian property investors concerned that they are being shut out of the Vancouver and GTA markets as deep-pocketed Asian buyers ratchet up buying prices.
Francis points to a Toronto house sold in March for $400,000 above its $759,000 asking price. The new owners are Chinese nationals, buying the property as a college residence for their child.
It’s a strategy more and more Canadian investors are adopting, although GTA selling prices have largely limited the viability of those plans. Americans, still grappling with tight credit and decimated home equities are also complaining about an influx of Canadian competitors now moving in to buy condos, townhouse and multi-family properties, often with cash in hand.
Still, in this country, foreign investors can’t be blamed for the spike in condo construction in either Toronto or Vancouver, counter critics of any Canadian move to follow several Asian and Western markets already restricting foreign ownership.
They blame the price surge in this country on a buying spree by Canadians, themselves, relying on low-interest rates and "liberal" default insurance guidelines.