A new two-year ban prohibits some foreigners from buying property in Canada
SCOTT SIMON, HOST:
Buying a home in Canada just got harder for some foreigners. New law came into effect that will prohibit some foreign investors from purchasing residential properties in that country for the next two years. Andy Yan is director of the City Program at Simon Fraser University in Vancouver. Thanks very much for being with us.
ANDY YAN: You're welcome, Scott.
SIMON: Why has the government introduced this policy?
YAN: Well, I think it begins with the fundamental belief that homes shouldn't be commodities, that - Minister Hussen, the minister of housing, diversity and inclusion, I think, started, I think, the introduction of this law, I think, with this fundamental belief and through which I think that it's a number of, I think, changes within the federal, provincial and local levels of government to ensure that housing is affordable and accessible for all Canadians.
SIMON: When you say homes shouldn't be commodities, you're suggesting something that people have suggested has happened in parts of London and, for that matter, Midtown Manhattan.
YAN: Indeed. And I think that it's the idea that homes should be occupied, that homes shouldn't be kept empty. What's interesting is to actually see what's happened in the state, provincial and local levels, I think through which there have been - there's been legislation and taxes, but when it comes to empty homes and foreign buying, I think also has released a sizeable number back into the rental pool.
SIMON: Are foreigners buying property the reason that housing prices are high?
YAN: Well, I think that it's one of them. But then, of course, it's also the fact that Canada is a very, very big country. And I think that depending on where you are looking, that the role of foreign capital has been, I think, one of the flows of money into housing markets for specific cities across the country.
SIMON: Did New Zealand try something like this a few years ago?
YAN: I think New Zealand did try something like this. But then I think what's also happened is really some sizable changes in terms of finance, in terms of ultra-low interest rates, access to credit, and really enacted a level of other types of demand that also inflated their housing markets.
SIMON: I have to ask, Mr. Yan, is this - does this policy have more to do with politics than economics?
YAN: I think that it's really one that I think looks formidable and dominant, but yet when you look at the details, it's actually dulled. There are, I think, any number of sizeable exemptions for those that are non-Canadians, I think, through which might really kind of dull down the effects of really what the intent of the legislation ought to be.
SIMON: For example, if a foreigner is a permanent resident, they can still buy a home, right?
YAN: Oh, very much so, as well as a student or a refugee or somebody who is working for a foreign corporation so that there are a number of avenues through which non-Canadian citizens can still purchase homes.
SIMON: Is - does this make Canada seem a little less open to the world? They - Canadians are proud of being open and accessible and a welcoming country.
YAN: Well, I think that it's really trying to stay in line with what's happened with other countries in terms of keeping their housing markets open and accessible, that I think that something like this, foreign buyers - in addition to, I think, other pieces of legislation when it comes to supply, demand and finance - are really intended to keep the country open, that the Canadian dream can still stay alive, as immigrants, I think, also are struggling in Canada's housing markets.
SIMON: Andy Yan, director of the City Program at Simon Fraser University, thanks very much for being with us.
YAN: My total pleasure.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.