Canada’s ban on foreign purchases of residential property is approaching a critical deadline, and a growing chorus of voices — from economists to real estate industry leaders — is questioning whether the policy ever did what it was designed to do.
The federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, introduced more than three years ago, is scheduled to expire on Jan. 1, 2027. Ottawa has not yet said whether it will extend the restrictions again, leaving buyers, developers and industry groups in limbo as the deadline nears.
Did the Ban Actually Work?
Mike Moffatt, economist and founding director of the Missing Middle Initiative at the University of Ottawa, told CTV’s Your Morning that there is little evidence the ban meaningfully improved affordability. He argued the policy was a nationwide response to what was really a localized problem, since foreign investment was concentrated mainly in Toronto and Vancouver.
“This was a nationwide rule designed to address problems in two small parts of the country and probably came a few years too late to really accomplish much of anything,” Moffatt said, noting that the housing market had already begun cooling by the time the restrictions took effect.
Moffatt also pointed out that domestic investors, not just foreign buyers, were part of the problem of condo units sitting empty — an issue governments had already tried to address separately through vacant-home taxes. “The rules were also redundant… it didn’t really seem to accomplish a whole lot,” he said, describing the ban as an added layer of red tape rather than an effective fix.
A Push From Industry to Let It Expire
That skepticism is echoed within the real estate industry itself. In a column for Real Estate Magazine Canada, Richard Silver, a sales representative and leader of Silver Burtnick & Associates at Sotheby’s International Realty Canada, argued the federal government should let the ban lapse rather than extend it again without evidence to support renewal.
Silver noted that when Ottawa extended the ban in 2024, the Canadian Real Estate Association pushed back, stating there was no analysis or data from Statistics Canada, the Canada Mortgage and Housing Corporation (CMHC), or Finance Canada demonstrating the measure was achieving its intended effect on affordability. He is calling on the more than 160,000 Realtors across Canada to write their members of Parliament and the Prime Minister before the January 2027 deadline, urging the government to publish an evidence-based assessment of the ban’s impact rather than automatically renewing it.
Silver also flagged provincial measures layered on top of the federal ban, such as Ontario’s 25 per cent Non-Resident Speculation Tax on qualifying foreign purchasers, arguing that combined restrictions risk sending an unwelcoming signal to international capital at a time when Canada is competing globally for investment and skilled talent.
Supply, Not Just Demand, Emerges as the Real Concern
Both Moffatt and Silver point to a supply-side problem underlying the affordability debate. Silver cited CMHC’s spring 2026 Housing Supply Report, which found that while overall housing starts rose in 2025, condominium presales have collapsed, unsold inventory has grown, and developers are delaying or cancelling projects — trends CMHC warns could threaten future ownership housing supply, particularly in Toronto and Vancouver. Because large condo developments typically need substantial presales before lenders will approve construction financing, a shortage of buyers can stall projects before they break ground.
Silver argued that reopening the market to what he called “legitimate international purchasers” — people investing in businesses, education or a Canadian residence, rather than pure speculation — could help broaden the pool of buyers supporting new construction, while maintaining safeguards against money laundering and vacant-property speculation.
Moffatt, for his part, said he sees little prospect that foreign investors will flood back into the market in large numbers regardless of what happens to the ban, though he acknowledged that could change if market conditions shift in coming years. He said the more pressing issue for Canadians is a persistent shortage of supply, particularly family-sized homes. He pointed to measures such as eliminating the HST on smaller, family-sized homes and reducing development charges as more effective ways to encourage new construction without boosting demand for existing resale homes.
What Comes Next
If Ottawa opts to keep some version of the ban in place, Moffatt suggested it be narrowed to exempt newly built homes, similar to an approach used in Australia, so that foreign investment is directed toward creating new supply rather than competing for existing housing stock.
With the Jan. 1, 2027 deadline approaching, the decision now rests with the federal government on whether to let the ban expire, extend it again, or reshape it — a choice that industry voices and economists say should be guided by data on what the policy has actually accomplished since it took effect.
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