The wall

Laying off staff, cancelling projects and desperate for sales, BC homebuilders decided on a moon shot. Let’s push the Dipper government of David Eby and the PM, Mark Carney, to lift Canada’s draconian ban on foreign buyers, they said.

Here was the argument.

First, the economy is being whacked with real estate construction grinding to a halt across the province, as is happening in the GTA ad elsewhere. Tens of thousands of unsold units have shut down the development pipeline. Supply is overwhelming demand.

Second, without presales, there is no construction financing. Without that, there is no building. And without building there’s no way government targets – like half a million new units annually for the nation – can be met. Without them, supply will eventually vanish and prices will ramp higher again.

Third, investors – Canadian or non-Canadian – are a critical component of the residential real estate market. They make projects proceed, then add valuable capacity to the rental market, which helps to keep lease costs lower than they otherwise would be.

Finally, there is no valid evidence folks from Washington state, Guangzhou or Mumbai have accelerated the price of Canadian real estate or pushed out domestic buyers. Participation levels were low before 2019, largely non-existent during Covid and completely banned since 2023 – yet Canadian buyers have largely stayed on the sidelines, even as prices declined, mortgage rates fell and inventory swelled. So it’s reasonable to conclude the evil, rapacious foreign buyer was a myth.

Say the homebuilders: “We have not seen layoffs for builders like this in more than a decade. People in government don’t understand how serious this is and how rapidly things are unwinding… New condo development requires presales to meet financing thresholds, part of which relies on investor-focused buyers. Closer to occupancy, sales typically shift more toward owner-occupiers… In the absence of foreign investors, fewer projects will meet presale financing thresholds, suppressing supply delivery, which serves no one in a housing crisis as projects will not start.”

So what happened?

Carney and his housing czar, poor Gregor Robertson, have not responded while Eby said phooey. The BC premier has come out completely opposed to lifting the ban, arguing that investors should not be allowed to benefit from the province’s marvellous services without paying income tax here.

So ideology wins over reason. Eby also knows an anti-foreigner bias runs deep within BC veins. He has tapped into it often in the past to further his political career.

What is this ban all about? After all, Canadians are not banned from buying property in the US and, in fact, have been a major source of revenue, financing and employment in that country. Nor do the Americans have a special recurring non-resident occupancy tax, as we do. (Just don’t tell you-know-who.)

It’s called the Prohibition of the Purchase of Resiidential Property by Non-Canadians Act, enacted on the first day of 2023 and now extended to the last day of 2026. In short it bans anyone but Canadian citizens or permanent residents (with a few small exceptions) from buying detached homes, condos, semis, townhouses or any other residential structures of three units or less in any urban or suburban area. (Rural areas and small towns under ten thousand people are not covered.)

Says the federal government: “For years, foreign money has been coming into Canada to buy up residential real estate, increasing housing affordability concerns in cities across the country, and particularly in major urban centres. Foreign ownership has also fueled worries about Canadians being priced out of housing markets in cities and towns across the country.”

But we know that is not true. Foreign capital has been gone for years now, with no substantial price collapse and no improvement in affordability. What have been decimated are sales levels, trades and the homebuilding industry as locals lack the confidence or means to enter the market. The Chinese or Iranian guy swooping in to push out a struggling young Canadian couple was a myth. Real estate values are stupid in Canada because Canadians made them that way. All on our own. And now we pay the price with valuations that won’t budge – and homes no longer being built.

What’s a better way?

Perhaps copy Australia, where foreigners are welcome to buy presales and new builds, but not established homes. Sales bring financing, construction, new supply and jobs. The Aussie kiddos get to buy resales, competing only with each other.

Do the right thing, prime minister.

Eby can chase another straw man.

About the picture: “Halle’s new crib causes FOMO with all his peers.  It’s luxurious and it has a spectacular balcony view,” writes Steve. “But since he does not read a certain blog, he is way overextended and he had to rent his basement out to a ‘sketchy’ character to help cover his overhead.  Oreo, on the other hand, takes advantage of all the benefits of basement living.  He could care less about what anyone thinks of his place, as long as its cool in the summer and warm in the winter.  When Oreo wants a great view, he just goes somewhere nice, because he can afford to!”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/08/08/the-wall-7/