Canadian Housing Market

Semion Kronenfeld: Banning Foreigners from Buying Homes is Unlikely to Change the Housing Market 

Canada’s housing market is one of the country’s most diverse and challenging markets to navigate, especially when it comes to predicting future trends and potential consequences of current-day decisions. However, new policies and procedures continue to be developed with each passing year, some posing more success for the market than others.

Leaders of the real estate industry, such as Semion Kronenfeld, are among those who are able to take into consideration all the factors at play with each new decision made and policy implemented in order to assess their long-term success.

Proposed Restrictions on the Housing Market

As Canada’s housing market continued to feel the volatile effects of the pandemic, a new plan to try and approach containing housing inflation came forward from the Canadian government: foreign buyers were to be restricted from purchasing a home for the next two years in order to redistribute funding throughout the industry and boost internal housing supplies. While this ban would not apply to students, permanent residents, or established foreign workers, it was nevertheless met with expected controversy.

Seasoned professionals in Canada’s housing industry, such as Semion Kronenfeld, were able to look past the message communicated by this new policy in order to examine the true intentions and changes to the market that this kind of shift would create in Canada.

Canada’s Housing Market

The state of Canada’s housing market in 2022 was a major factor that informed the need for this new policy, and the reasons for it being implemented in the fashion that it was. As a whole, the country reached record highs in home prices, with values reaching almost ten times the usual income. This state of the market plunged Canada into a housing crisis, and new measures began to form in order to try and take control of the rapidly escalating situation.

A large part of the blame for this increase in housing prices, especially in the provinces of Vancouver and Ontario, was placed on foreign buyers by the government of Canada as a way to try and find a reason for this bottleneck in the market and potential resulting paths for solutions that could be followed.

The Effects of the Ban: A Look at 2022

Unsurprisingly, this ban has not yielded any major results, and instead injected controversy and division into Canada’s real estate and construction markets where challenges are already threatening potential homeowners and the country’s economy as a whole. Many experts, such as Semion Kronenfeld, view this move by the Canadian government as nothing but a political strategy for someone on whom to place blame for the increasingly dangerous market, instead of taking action and searching for active changes to be made.

Simultaneously, rising interest rates across Canada are beginning to slow the growth of Canada’s residential real estate market prices, aligning with the implementation of this ban in order to appear as though this policy change is yielding results it is not actually directly responsible for.