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A new Canadian law has banned foreigners from buying homes in the country for two years.
The law, which took effect on January 1, was passed because of a spike in home prices in Canada since the start of the COVID pandemic.
There are also beliefs that foreign buyers were snapping up a supply of homes as investments, which led to the surge in prices.
The ban prohibits non-Canadian citizens or temporary residents from buying residential properties, and imposes a C$10,000 fine on offenders.
International students who have been in the country for at least five years, refugee claimants, and people with temporary work permits are excluded.
Non-Canadian citizens who have spouses that are citizens of the country are also excluded from the ban.
Ahmed Hussen, federal housing minister, said the ban is meant to discourage buyers from looking at homes as commodities instead of a place to live and grow a family.
“Through this legislation, we’re taking action to ensure that housing is owned by Canadians, for the benefit of everyone who lives in this country,” Hussen said in a statement.
While housing prices in Canada dipped slightly in 2022, they remain higher than a decade ago.
According to the Canadian Real Estate Association, average home prices in Canada peaked just above C$800,000 in February 2022 and have fallen steadily since then.
Compared to 2013, housing prices were up by 48 percent in 2022.
While government officials have welcomed the ban, some groups have been critical of the new law, saying it is unclear what impact it will have on Canada’s housing market.
