08/25/2026
SHOULD THE BAN ON FOREIGN BUYER'S GO OR STAY?
Canada's federal ban on foreign purchases of residential real estate is currently scheduled to expire January 1, 2027.
Will the government allow it to expire? More importantly, should they?
I believe this deserves a much bigger discussion.
Logically, restrictions on foreign purchasing should have their greatest impact in markets that have historically attracted significant international investment and immigration. The two obvious examples are Toronto and Vancouver, Canada's two largest economies. To some extent, housing markets across the rest of the country are also influenced by what happens in these two major markets.
Look at what has happened to available inventory since the ban came in.
Compared with the extremely tight market of 2021, active housing inventory has increased approximately:
Toronto: +168%
Vancouver: +67%
Those are enormous increases in the number of homes available to buyers—and additional inventory was desperately needed.
Now look at prices.
From their 2022 peaks, residential values have declined approximately:
Toronto: -24.8%
Vancouver: -20.8%
That doesn't mean the same thing has happened everywhere in Canada. Some markets have remained relatively flat, while others have actually increased.
It also certainly doesn't mean the foreign buyer ban caused these corrections by itself.
This is where I think much of the commentary about real estate in the press misses something I call the VECTOR PRINCIPLE.
There is never just one force determining the direction of a real estate market.
Think of the market as being pushed and pulled by numerous vectors, each operating in a different direction and with a different magnitude:
• Interest rates
• Employment
• Immigration and population growth
• Housing inventory
• Consumer confidence
• Affordability
• Economic growth
• Domestic government policy
• Foreign government policy and global events
• Taxes and regulation
• Availability of credit
• Investor activity
The ultimate direction of the real estate market is the sum of all of those forces/vectors.
I have been tracking Canadian Real Estate Statistics for roughly 30 years, and both Toronto and Vancouver markets have historically been remarkably resilient. By 2022, however, they had become severely overheated and a correction was badly needed.
That correction has now been substantial.
I am not suggesting that the foreign buyer ban single-handedly caused inventory to rise or prices to fall. Interest rates alone have obviously been an enormous force during this period.
What I am suggesting is that the foreign buyer ban has been one significant vector among many, particularly in Toronto and Vancouver.
And if we remove that vector on January 1, 2027, what happens next?
Should Canada extend the foreign buyer ban—or is it time to let it expire?
I'd be interested to hear what you think.
William Hubbard
Owner / Broker
Coldwell Banker Executives Realty
https://thebchomes.com/Blog/should-the-foreign-buyer-ban-go
