{"id":9944,"date":"2023-02-07T19:57:32","date_gmt":"2023-02-07T19:57:32","guid":{"rendered":"http:\/\/lonecandle.com\/?p=9944"},"modified":"2023-02-07T19:57:32","modified_gmt":"2023-02-07T19:57:32","slug":"canada-welcomes-the-new-year-by-banning-foreign-home-ownership","status":"publish","type":"post","link":"https:\/\/lonecandle.com\/?p=9944","title":{"rendered":"Canada Welcomes the New Year by Banning Foreign Home Ownership"},"content":{"rendered":"\n

\n\n“It’s certainly true Canada has some of the most unaffordable housing prices in the developed world. Average home prices<\/a> are ten times average incomes<\/a>. Compare that to the U.S., where median home prices are 4.3 times<\/a> median incomes, per National Association of Realtors’ data. OECD figures show that Canadian home prices have grown 43 percent faster<\/a> than incomes since 2015.<\/p>\n\n\n\n

And as homes have gotten more expensive, foreign homebuyers have become an increasingly popular scapegoat.”<\/p>\n\n\n\n

…<\/p>\n\n\n\n

“foreign buyers make up only 5 percent<\/a> of homeowners in the country. Squeezing out such a marginal part of the market probably won’t have a huge effect on prices.<\/p>\n\n\n\n

Foreign buyers<\/a> made up around 4 percent of New Zealand’s housing market when the country implemented a ban on nonnative buyers in 2018. Home price growth continued unabated after the ban.<\/p>\n\n\n\n

A heavy tax<\/a> on foreign home purchases in British Columbia has managed to reduce “foreign-related” purchases from 10 percent of all sales to between 1 to 2 percent. One study<\/a> of the policy showed it reduced home price growth by 1 percent, and that minimal benefit faded after a few months.<\/p>\n\n\n\n

Such are the pitfalls of trying to marginally curb demand in a hot market without enough supply. Behind every eliminated foreign buyer are multiple domestic home purchasers competing over an insufficient stock of homes.<\/p>\n\n\n\n

Canada’s national housing finance agency estimates the country will be short some 3.5 million homes by the end of the decade. That’s within spitting distance of the U.S.’s own estimated shortage of 4 million homes\u2014a country with nearly ten times Canada’s population.<\/p>\n\n\n\n

The country has all the limits on supply that the U.S. does, including density restrictions in the urban core and growth boundaries on the exurban fringe. Both prevent new housing from being built to meet demand. As a result, prices in the country stay stubbornly high.<\/p>\n\n\n\n

Canada’s local<\/a> and provincial governments<\/a> are starting to address this problem with proposals to loosen zoning restrictions. Done right, that will unleash developers’ ability to add much-needed supply.<\/p>\n\n\n\n

At the federal level, it appears more politically practical to run with unproductive bans and to scapegoat foreigners.”<\/p>\n\n\n\n

\n
Canada Welcomes the New Year by Banning Foreign Home Ownership<\/a><\/blockquote>