Canada to Exempt New Homes From Foreign Buyer Ban to Boost Supply

Canada will allow foreign buyers to purchase newly built residential homes while extending the ban on existing residential properties until 2029, according to reports.

The federal government announced the policy shift on Thursday as part of its ongoing housing strategy. The approach mirrors a model used in Australia to direct foreign capital away from the resale market. Advocates argue the exemption protects local buyers from foreign competition while providing developers with necessary presale financing.

Lucy Hua, a real estate professional who started her career a decade ago when foreign buyers dominated her client base, remains skeptical about their return. “Only time will tell,” Hua told CTV News.

When Canada enacted its ban on foreign residential property purchases in 2023, that market segment dried up completely. Property records from 2020 show foreign buyers were heavily concentrated in new developments before the initial restriction. Non-residents owned 13.6 percent of new condos in Vancouver and 7.7 percent in Toronto, according to data.

Toronto and Vancouver currently feature thousands of unsold new condominiums. Unlike detached homes, which sit in a balanced market, oversupply has driven condominium prices down significantly according to Royal Bank of Canada data reported by CTV News.

Developers rely on presales and project sell-outs to secure financing for future construction. “When those condos, those projects, are not selling, those developers cannot move forward with their future projects,” Hua told CTV News. Without those new builds, accessibility and supply for local residents remain constrained.

Critics question whether the exemption genuinely serves housing affordability. Yinnon Geva, an assistant professor at the University of Toronto’s Institute for Management and Innovation, told CTV News that the federal strategy appears aimed at keeping the development industry afloat. “We can’t be serious about bringing down prices if we keep propping up demand,” Geva said.

Budget 2026 defends the measure by stating it protects affordability by keeping the vast majority of the market available for Canadians while unlocking investment in new housing supply. However, home prices across most provinces remain near record highs, requiring nearly double the median household income to purchase.

The federal exemption does not override provincial measures. Ontario maintains a 25 percent foreign buyer tax in many areas, while British Columbia applies a 20 percent tax in specific regions. Hua noted that none of those provincial levies have been lifted or exempted.