Given how nice it is outside right now, some of you may be forgetting that Canada does have winter. And it is largely because of winter that we are the biggest foreign buyer of homes in the state of Florida (and the US as a whole for that matter). In 2024, Canadians bought over $2.4 billion worth of homes in Florida. And between April 2023 and March 2024, it is estimated that Canadians accounted for nearly 25% of all foreign home sales in the state (this is according to the National Association of Realtors).
Because of this strong demand, I would imagine that many and perhaps even most Canadians would tell you that being allowed to buy a home in the US — or elsewhere in the world — is a nice freedom to have. (Although demand is waning because of the strong US dollar and because of the current geopolitical climate.)
If we flipped this around and asked Canadians whether foreigners should be allowed to buy homes in Canada, I suspect that we might get a different leaning. And that's why there is the Prohibition on the Purchase of Residential Property by Non-Canadians Act (which is currently set to expire on January 1, 2027). This was and likely still is the politically popular thing to have in place.
Now, it could be the case that these two groups are mutually exclusive. In other words, the people who own homes outside of Canada (a small minority) do not overlap with the people who support a ban on foreign buyers (the majority). And so when looked at in aggregate, the majority of Canadians do in fact want this ban. That said, I would not be surprised if Canadians buy more homes abroad than foreigners buy homes in Canada, which would make our current policies, at the very least, mildly hypocritical.
Whatever the case may be, it is in the news this week that some of the largest builders in British Columbia have just sent a letter to our governments arguing that the foreign buyer ban and BC's foreign buyer tax need to be reconsidered — or modified to something that resembles Australia's model. (Australia restricts foreign ownership to newly constructed homes and pre-sales. Foreigners can't buy resales.) The letter was signed by 25 companies including developers like Amacon, Beedie, Strand Development, and Westbank.
At the very least, I think there's a strong argument to be made that pre-construction and new home sales should be exempt from the ban. Most people probably don't appreciate that developers rely on pre-sales to finance the construction of new homes. It is significantly more challenging for end users to buy in this same way given how long projects take. We can certainly have a conversation about whether this is the optimal financing approach, but it is the way things work today.
So my view is this: If foreign capital wants to finance new housing and help increase our overall housing supply, that's a good thing. Let's take their money and use it to build lots more homes for Canadians. With this approach, foreigners won't be competing for our existing housing stock and, over the longer term, it is likely that most of these pre-sales will end up as new rental supply or as a resale home for Canadians.
The alternative is building fewer new homes, waiting until there's a worse housing shortage, and then turning the industry back on to deliver new homes in 5-7 years.
Cover photo by Denys Kostyuchenko on Unsplash
Above is map from Brian Potter (over at Construction Physics) that shows every census tract in the US where vacation homes make up 20% or more of the total number of homes. What you are seeing is a relatively small number of census tracts — 3,372 out of a total of 84,414 (~4%).
"Rent control is the second-best way to destroy a city, after bombing." —Lawrence H. Summers
Zohran Mamdani, the Democratic nominee for the mayor of New York City, clearly ran a good campaign. He used social media and short-form videos to find his audience and win with the message that the city has become unattainable to most.
But it is also clear that the stock market really does not like his message. Shares of firms with exposure to New York City's real estate market reacted immediately: Vornado Realty Trust, SL Green, Equity Residential, Empire State Realty Trust, LXP Industrial Trust, and others, were all down. At the same time, the wealthy vowed to leave New York for places like Florida, as they so often do these days.
One of reasons for this negative reaction was Mamdani's commitment to not just cap rent increases, but freeze rents in rent-stabilized units for the entire duration of his term. We've spoken a lot about rent control over the years (here, here, here, and other places) but, at a high level, the problem with rent controls is that they create a strong disincentive for landlords to invest and maintain their homes and for developers to build new homes. So what ultimately happens is that you get a more rapidly aging inventory of existing homes and a reduced amount of new supply.
A full-out rent freeze takes this even further. A rent freeze does not mean that utility costs will also be frozen, that insurance and taxes will be frozen, that interest rates will be capped, and that all other landlord operating expenses will be restricted from inflating. (If this were the case, we really wouldn't have market economy.) So what a rent freeze does is ensure that, in real dollars, a landlord is able to collect
Given how nice it is outside right now, some of you may be forgetting that Canada does have winter. And it is largely because of winter that we are the biggest foreign buyer of homes in the state of Florida (and the US as a whole for that matter). In 2024, Canadians bought over $2.4 billion worth of homes in Florida. And between April 2023 and March 2024, it is estimated that Canadians accounted for nearly 25% of all foreign home sales in the state (this is according to the National Association of Realtors).
Because of this strong demand, I would imagine that many and perhaps even most Canadians would tell you that being allowed to buy a home in the US — or elsewhere in the world — is a nice freedom to have. (Although demand is waning because of the strong US dollar and because of the current geopolitical climate.)
If we flipped this around and asked Canadians whether foreigners should be allowed to buy homes in Canada, I suspect that we might get a different leaning. And that's why there is the Prohibition on the Purchase of Residential Property by Non-Canadians Act (which is currently set to expire on January 1, 2027). This was and likely still is the politically popular thing to have in place.
Now, it could be the case that these two groups are mutually exclusive. In other words, the people who own homes outside of Canada (a small minority) do not overlap with the people who support a ban on foreign buyers (the majority). And so when looked at in aggregate, the majority of Canadians do in fact want this ban. That said, I would not be surprised if Canadians buy more homes abroad than foreigners buy homes in Canada, which would make our current policies, at the very least, mildly hypocritical.
Whatever the case may be, it is in the news this week that some of the largest builders in British Columbia have just sent a letter to our governments arguing that the foreign buyer ban and BC's foreign buyer tax need to be reconsidered — or modified to something that resembles Australia's model. (Australia restricts foreign ownership to newly constructed homes and pre-sales. Foreigners can't buy resales.) The letter was signed by 25 companies including developers like Amacon, Beedie, Strand Development, and Westbank.
At the very least, I think there's a strong argument to be made that pre-construction and new home sales should be exempt from the ban. Most people probably don't appreciate that developers rely on pre-sales to finance the construction of new homes. It is significantly more challenging for end users to buy in this same way given how long projects take. We can certainly have a conversation about whether this is the optimal financing approach, but it is the way things work today.
So my view is this: If foreign capital wants to finance new housing and help increase our overall housing supply, that's a good thing. Let's take their money and use it to build lots more homes for Canadians. With this approach, foreigners won't be competing for our existing housing stock and, over the longer term, it is likely that most of these pre-sales will end up as new rental supply or as a resale home for Canadians.
The alternative is building fewer new homes, waiting until there's a worse housing shortage, and then turning the industry back on to deliver new homes in 5-7 years.
Cover photo by Denys Kostyuchenko on Unsplash
Above is map from Brian Potter (over at Construction Physics) that shows every census tract in the US where vacation homes make up 20% or more of the total number of homes. What you are seeing is a relatively small number of census tracts — 3,372 out of a total of 84,414 (~4%).
"Rent control is the second-best way to destroy a city, after bombing." —Lawrence H. Summers
Zohran Mamdani, the Democratic nominee for the mayor of New York City, clearly ran a good campaign. He used social media and short-form videos to find his audience and win with the message that the city has become unattainable to most.
But it is also clear that the stock market really does not like his message. Shares of firms with exposure to New York City's real estate market reacted immediately: Vornado Realty Trust, SL Green, Equity Residential, Empire State Realty Trust, LXP Industrial Trust, and others, were all down. At the same time, the wealthy vowed to leave New York for places like Florida, as they so often do these days.
One of reasons for this negative reaction was Mamdani's commitment to not just cap rent increases, but freeze rents in rent-stabilized units for the entire duration of his term. We've spoken a lot about rent control over the years (here, here, here, and other places) but, at a high level, the problem with rent controls is that they create a strong disincentive for landlords to invest and maintain their homes and for developers to build new homes. So what ultimately happens is that you get a more rapidly aging inventory of existing homes and a reduced amount of new supply.
A full-out rent freeze takes this even further. A rent freeze does not mean that utility costs will also be frozen, that insurance and taxes will be frozen, that interest rates will be capped, and that all other landlord operating expenses will be restricted from inflating. (If this were the case, we really wouldn't have market economy.) So what a rent freeze does is ensure that, in real dollars, a landlord is able to collect
According to Potter, there are, perhaps not surprisingly, three main drivers of demand: beaches, lakes, and ski resorts. This is why if you drill down into Florida — which has the highest absolute number of vacation homes in the US at over 800k — you'll see that these homes are not evenly distributed across the state. They're on the coasts, and to a lesser extent inland near places like Disney World.
Also noteworthy is the fact that these census tracts tend to match up nicely with the location of ski resorts. Here's the same map of the US but with ski resorts overlaid:
And here's a close up of Salt Lake City and Park City, because, I love Park City:
As of Q1-2025, the US had over 147 million homes, and somewhere around 4.3 million of these were seasonal or vacation homes. If you'd like to better understand where these are and the trends surrounding them, I recommend you check out Potter's post.
Maps via Construction Physics; cover photo by Joe Ol on Unsplash
The same is true in condominiums and other ownership structures. Whenever somebody talks about frozen maintenance or common element fees, I immediately remind them that this is a bad thing, not a feature. It means the condominium corporation is on an unsustainable path and will eventually run out of money. Something is being sacrificed in order to keep up with rising operating and capital expenses. At the very least, you need to keep up with inflation.
I can appreciate that rents are too high. As a developer, I would love to be able to build to lower rents. It reduces absorption risk and it's better for the city. But rather than just freeze rents, a more productive and sustainable approach would be to attack the underlying root causes for the problem. A rent freeze is a short-term political fix that will have second and third-order consequences. Problems for a different day and for a different mayor, perhaps. But problems nonetheless.
Cover photo by Daryan Shamkhali on Unsplash
According to Potter, there are, perhaps not surprisingly, three main drivers of demand: beaches, lakes, and ski resorts. This is why if you drill down into Florida — which has the highest absolute number of vacation homes in the US at over 800k — you'll see that these homes are not evenly distributed across the state. They're on the coasts, and to a lesser extent inland near places like Disney World.
Also noteworthy is the fact that these census tracts tend to match up nicely with the location of ski resorts. Here's the same map of the US but with ski resorts overlaid:
And here's a close up of Salt Lake City and Park City, because, I love Park City:
As of Q1-2025, the US had over 147 million homes, and somewhere around 4.3 million of these were seasonal or vacation homes. If you'd like to better understand where these are and the trends surrounding them, I recommend you check out Potter's post.
Maps via Construction Physics; cover photo by Joe Ol on Unsplash
The same is true in condominiums and other ownership structures. Whenever somebody talks about frozen maintenance or common element fees, I immediately remind them that this is a bad thing, not a feature. It means the condominium corporation is on an unsustainable path and will eventually run out of money. Something is being sacrificed in order to keep up with rising operating and capital expenses. At the very least, you need to keep up with inflation.
I can appreciate that rents are too high. As a developer, I would love to be able to build to lower rents. It reduces absorption risk and it's better for the city. But rather than just freeze rents, a more productive and sustainable approach would be to attack the underlying root causes for the problem. A rent freeze is a short-term political fix that will have second and third-order consequences. Problems for a different day and for a different mayor, perhaps. But problems nonetheless.
Cover photo by Daryan Shamkhali on Unsplash
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