Canada to Ban Foreigners From Buying Homes as Prices Soar

Canada will ban most foreigners from buying homes for two years and provide billions of dollars to spur construction activity in an attempt to cool off a surging real-estate market.

The measures will be contained in Finance Minister Chrystia Freeland’s budget on Thursday, according to a person familiar with the matter, asking not to be named because the matter is private.

The move signals that Prime Minister Justin Trudeau is becoming more assertive about taming one of the developed world’s most expensive housing markets — and that the government is growing more concerned about the political backlash to inflation and the rising cost of housing.

Home prices in Canada have soared more than 50% over the past two years. The market saw a record monthly increase in February as buyers acted ahead of rate increases by the Bank of Canada, taking the benchmark price of a home to C$869,300 ($693,000).

The foreign-buyer ban won’t apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the person said.

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Several billion dollars in Freeland’s budget will be allocated to building affordable housing and to helping local governments update their systems to allow faster construction of new properties.

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