With Toronto condos crashing, is it time to scrap the foreign-buyer ban?

“A lot of investors, a lot of agents, a lot of people who did buy are really underwater right now, and the whole industry really inverted itself,” said Martinus Geleynse, Hamilton managing partner for Corcoran Horizon Realty.

“I think there’s a bit more sympathy for the housing market.”

In 2022, the federal government passed a two-year ban on foreign ownership of nonrecreational homes that went into effect in January 2023. It was meant to reduce foreign investment and speculation at the height of the housing market. 

There are exceptions for people with temporary work permits, refugee claimants and international students, who meet certain criteria. 

The ban was then extended another two years, until 2027. If the federal government doesn’t do anything by Jan. 1, it will just expire. 

The impact of the ban has been debated, as while foreign buyers make up a small percentage of owners in the country overall, according to Statistics Canada, it’s higher in areas in Toronto and Vancouver.

Many in the real estate industry want to see the ban disappear altogether, arguing the struggling industry needs more investment. However, one housing advocate says it should stay, although they don’t believe that will move the needle on affordability on its own.

A spokesperson for Housing, Infrastructure and Communities Canada declined to comment on their plans for the ban.

In an emailed statement, they reiterated the government’s commitment “to ensuring that homes in Canada are first and foremost for housing Canadian families, and not speculative investments.”

Housing Minister Gregor Robertson has said in the past that the government is looking at what other countries do on this file, particularly Australia, where there are exemptions to a foreign-buyer ban for new homes and vacant land.

Has the ban been effective?

Geleynse said the original ban had more of a “PR” effect, but the dollars and cents impact on the market was “almost negligible.”

The ban has been popular with the wider public. 

A 2025 poll by public opinion firm Research Co. found 76 per cent of Canadians supported the ban, while 13 per cent opposed it. Eleven per cent were undecided. 

When housing researcher Andy Yan, an associate professor of professional practice in the Urban Studies Program at Simon Fraser University tries to think of a metaphor for Canada’s foreign buyer ban, “more cheesecloth than duct tape” is what he comes up with, because of all the exemptions. 

He calls the ban “one tool in the tool kit” to make housing more affordable.

Yan said that while the overall percentage of foreign owned residences in Canada is low, it’s important to note that it’s higher in certain areas and for certain property types.

According to Statistics Canada, 2.1 per cent of all properties in Ontario, 3.1 per cent in B.C. and 2.7 per cent in the Toronto Census Metropolitan Area (CMA), were owned by non-residents in 2023.

More detailed data from 2017 reveals that 7.2 per cent of condos in Toronto CMA and 7.9 per cent of condos in the Vancouver CMA were owned by non-residents, 4.9 per cent of all properties within the city of Toronto and 7.6 per cent of all properties in the city of Vancouver were owned by non-residents. 

“Which is not nothing,” said Yan, adding that even marginal players impact prices.

But with everything that’s changed “locally, nationally, and around the world” since 2023, it’s perhaps a good time to consider alternatives, he said.

“I think what’s interesting is that we’re still far away from affordability in our time,” he added. 

Ditch, keep or change?

Yan said he’d like to see Canada move toward a model like in Singapore, which has a special tax on foreign owners.

He added it comes down to a question of parking foreign capital in local residential real estate in Toronto and Vancouver. 

“We shouldn’t have free parking. We should increase the parking fees.”

Sean Zahedi, the founder and principal of SCOP Inc., a real estate marketing and consulting firm representing several developers, said foreign buyers are particularly important for the pre-construction condo market.

That’s where buyers put down payments on unbuilt units with the agreement to purchase them once they are completed, often years down the line. 

Lifting the ban would help sell pre-construction units, and enable developers to get the financing needed to move forward, he said. 

These buyers were typically not investors without any ties to the country, he said, but families that would start by sending adult children over with the intent to eventually join them.

“That window has closed in the last three years,” he added. 

“We’re almost sending a vibe to the rest of the world and foreign buyers, our investors, that we’re not open for business.”

Geleynse also thinks the ban should be lifted. That’s because he’s seen it deter buyers in the luxury home and condo market in the Greater Toronto and Hamilton Area. The condo market in particular has been suffering from a lack of demand.

He believes though that a broader housing strategy that focuses on building more two- and three-bedroom units for families and downsizing retirees is needed, to improve affordability.

“We’re not building inventory for families, and that’s the big issue,” he said.

Bruno Dobrusin, co-chair of the Toronto Tenant Union, says the ban “hasn’t really made a dent in terms of at least rental affordability,” but added that he would like to see it remain in place, noting removing it could lead to higher prices and that it’s harder for tenants to organize with foreign landlords.

“We already have thousands of units empty that people cannot afford,” he said.

“Bringing in investors who are just going to make those units more expensive by sheer competition is not going to improve the main problem we have.”