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

Andermatt is a small mountain village in the Swiss Alps. It's a few hours from Zurich, it's known for its skiing and snowboarding, and it's surely really beautiful. But right now it has two other important things going for it: one, it does not restrict property purchases by foreign nationals and, two, it does not limit the construction of second homes to 20% of the village's housing stock, which is a rule in other places. This is expected to come into force in Andermatt in 2040.

Because of these features, Andermatt is being viewed as a barometer for foreign demand and, over the last six weeks in particular, local developers and agencies are reporting "hockey stick growth" in terms of sales volume and inquiries (according to FT). As of April 10, new development projects in the village reported selling SFr14.2mn worth of apartments, which is nearly 2x the amount of transactions for all of 2024. And nearly a third of these deals were signed by "nervous Americans" following April 2.

Here's one buyer testimonial:

One Andermatt buyer, a New York-based tech entrepreneur in his early fifties who asked to remain anonymous, said Trump was one of the “main factors” in his decision to buy. He and his partner purchased a two-bedroom unit for SFr2.2mn in November. Switzerland, he said, was stable and secure at a time when the US was less so under Trump. “It is not only financial uncertainty — it is not liking what [the US] is turning into and what it has become,” he said.

It is not uncommon for people to say, "if X happens, then I'm going to leave and move to Y." That doesn't always, or even oftentimes, materialize. But wealthy people have the means to make it happen, if they want, and we're seeing signs of it all across Europe. In some cases, putting down a deposit on a new Swiss apartment might just be an option, should things get worse. And in other cases it may be a firm commitment to relocate.

But either way, it's a strong indicator and a demonstration of people voting with their feet.