The Two-Year Ban and Adjustments by CMHA

In an attempt to address its ongoing housing crisis, Canada initiated a two-year ban on foreign nationals purchasing homes beginning in January 2023, a significant pledge in Prime Minister Justin Trudeau’s campaign. However, subsequent adjustments by the Canada Mortgage and Housing Association (CMHA) have introduced allowances for non-Canadians to buy residential properties under specific conditions. But what relevance might these changes hold for the London property market?

Housing Disparity in London

Much like major Canadian cities such as Toronto and Vancouver, London faces a persistent disparity between the supply and demand for properties. While constructing more housing appears as a plausible solution, it is a time-consuming endeavour. Consequently, implementing restrictions on selling to foreign buyers is viewed as a prompt measure to bolster housing availability for those seeking immediate residence. The pivotal question remains: will this ban substantially impact the housing landscape in the future?

Affordability Concerns and Foreign Ownership in Toronto

Affordability concerns prevail among many Canadians who perceive limited prospects for entering the property market. Notably, in Toronto alone, non-residents owned approximately 3% of properties in 2020, amounting to over 45,000 residences, many of which lie vacant or underutilised. Intriguingly, just 15% of these properties could potentially accommodate Toronto’s homeless population in 2021.

Impact of Foreign Ownership on Property Prices

However, concrete evidence suggesting that overseas buyers directly inflate property prices in Toronto remains elusive. Instead, their investments contribute to the economy, facilitating further housing development. The absence of comprehensive data concerning this issue complicates legislators’ efforts to fully comprehend its implications. Substantially more research is necessary to draw definitive conclusions about the impact of foreign ownership.

Overseas Ownership in London

London has the highest proportion of properties registered to overseas owners across the UK. Concentrated primarily in inner London, the lack of comprehensive information impedes a clear understanding of how these properties are utilised and whether they exacerbate the housing crisis. Available government data indicates that 87,731 London properties remained vacant in 2021, although the extent of overseas ownership among these remains uncertain.

Learning from Canada: Insights for London

Examining the consequences of Canada’s reduction in foreign property ownership could offer valuable insights into resolving London’s housing crisis. Legislators must thoroughly scrutinise every facet of this issue to devise effective solutions, encompassing the utilisation of existing housing stock, increased construction of homes, and the implementation of concrete measures to address the problem.