Letter to the Editor: Ending the foreign buyer ban won’t fix housing

The views expressed in this column are solely those of the author.

Real Estate Magazine invites industry professionals to share their thoughts on the issues shaping today’s real estate landscape. Submit a Letter to the Editor to add your voice to the conversation.

I read Richard Silver’s call to let Canada’s foreign buyer ban expire, and I want to offer a view from outside the Toronto and Vancouver condo towers, because that is where most of us actually work.

Silver points at collapsing condo presales and lands on one fix: reopen the country to foreign buyers. I sell waterfront, rural and recreational property in Grey Bruce, and I have done it full-time for more than 20 years. I can tell you the problem he describes and the solution he offers do not line up.

Start with the numbers. Foreign buyers have never owned much of this country. Statistics Canada and Canada Mortgage and Housing Corp. (CMHC) put foreign ownership between two and six per cent,  roughly 3.4 per cent in Toronto and 4.8 per cent in Vancouver.  Before the ban even started, CMHC’s own estimate said it would affect about two per cent of purchases a year.  That is not a lever big enough to sink a market, and it is not big enough to save one either.

So what actually flattened the condo market? Nothing to do with the ban. Interest rates more than doubled the cost of carrying a mortgage. By 2024, roughly four out of five condo investors in the GTA were losing money every single month on the units they owned. Builders finished a wave of tiny investor units into a market that no longer wanted them. Immigration targets got cut. Buyers who signed presale contracts years ago are now closing at prices below what they agreed to pay. That is the real story, and not one line of it changes if a foreign buyer flies in.

Here is the part Silver skips. The investors who used to fuel presales were Canadians. In Toronto, close to four in ten condos are investment properties, and the vast majority sit in Canadian hands. Bringing in foreign buyers does not rebuild that. It just adds competition for the homes we already have, at the exact moment we cannot sell the ones already sitting empty. Buying a finished condo does not build anything. It bids up the price of what exists.

If we actually want more homes built, the money has to go into building them. That means development financing, rental construction and real investment in supply. It does not mean selling our existing housing to buyers overseas and calling it progress.

There is also a reason to keep ownership here in the first place. When Canadians own Canadian homes, the equity stays here, the gains stay here and the mortgages stay with our own lenders. Foreign money is more mobile and can leave fast, which adds volatility to local markets. CMHC has said as much itself. Pouring that back into a soft, oversupplied market does not help the young family trying to buy their first place. It helps whoever is selling at the top.

I will give Silver one thing. He is right that policy should be built on evidence, and there is a fair case for welcoming investment at the development level, the kind that puts shovels in the ground. That is a different conversation than handing existing homes to foreign buyers.

But the ban itself? The evidence says it is a small factor in a market that fell apart for reasons that have nothing to do with it. Ending it now would do little for supply, less for affordability and mostly line the pockets of sellers at the high end. That is not the fix Canadian housing needs.

The post Letter to the Editor: Ending the foreign buyer ban won’t fix housing appeared first on REM.