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