From Speculators to Supply: What Role Should Foreign Investors Play?
July 25, 2025
By Allwyn Dsouza, Senior Analyst, Research and Insights, REIC/ICI
By Allwyn Dsouza, Senior Analyst, Research and Insights, REIC/ICI
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Canada’s housing affordability crisis has pushed policymakers to take dramatic action, including a temporary ban on foreign homebuyers. As of 2023, non-Canadians were prohibited from purchasing residential property in Canada (with some exceptions) in an attempt to cool the market and make homes more affordable for locals. The ban, originally set for two years, was recently extended through 2027 amid ongoing political pressure to address housing costs. At the same time, there is growing demand from industry and some experts to allow foreign investors back into Canadian real estate, arguing that the ban is a populist distraction from the real issues. We examined the data on foreign ownership, its impact on housing demand and supply, and whether Canada should welcome back foreign buyers – or keep the doors closed.
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How Much Canadian Real Estate Do Foreigners Own?
One striking fact is how small a share of Canadian housing stock is owned by foreign investors. Data from Statistics Canada’s Canadian Housing Statistics Program (CHSP) show that non-residents owned only between 2% and 6% of residential properties as of 2022[1]. This pattern holds even in the big cities often thought of as hotspots for foreign buyers with Vancouver and GTA having 4.2% and 3% foreign ownership of residential properties respectively. In other words, out of all homes in Canada, only a tiny fraction are in foreign hands.
It’s worth putting this in perspective: domestic investors (Canadians who own multiple properties) hold a far larger chunk of the market. In Ontario and BC, multiple-property owners (mostly Canadian residents) possess almost one-third of all homes[2]. Compared to these domestic investors, the foreign buyer segment is minuscule.
One striking fact is how small a share of Canadian housing stock is owned by foreign investors. Data from Statistics Canada’s Canadian Housing Statistics Program (CHSP) show that non-residents owned only between 2% and 6% of residential properties as of 2022[1]. This pattern holds even in the big cities often thought of as hotspots for foreign buyers with Vancouver and GTA having 4.2% and 3% foreign ownership of residential properties respectively. In other words, out of all homes in Canada, only a tiny fraction are in foreign hands.
It’s worth putting this in perspective: domestic investors (Canadians who own multiple properties) hold a far larger chunk of the market. In Ontario and BC, multiple-property owners (mostly Canadian residents) possess almost one-third of all homes[2]. Compared to these domestic investors, the foreign buyer segment is minuscule.
Figure 1.0
Source: Statcan
Trends in Foreign Investment: Peaks and Declines
The data also shows that foreign investment in Canadian housing peaked several years ago and has since receded. In the mid-2010s, hot markets like Vancouver saw an uptick in foreign buying. Provincial tracking in B.C. showed foreign buyers comprised about 5% of Metro Vancouver home purchases at the peak in 2016–17. This influx coincided with rapid price increases and public outcry. In response, B.C. introduced a 15% foreign buyers’ tax in 2016 (later raised to 20%), and Ontario followed with a similar 15% tax in 2017 for the Greater Toronto region. These measures had an immediate chilling effect: by 2018 the foreign-buyer share in Vancouver sales dropped to around 1.6% (from over 5% prior). By the time Canada’s federal foreign-buyer ban was announced in 2022, foreign demand was already a shadow of its former self. In fact, the ban’s announcement might have briefly stimulated a small surge of last-minute buying. In late 2022, the share of Vancouver home sales involving a foreign buyer spiked from ~0.9% to ~2.8% as overseas buyers rushed to beat the January 2023 ban deadline. This “Streisand effect” – where banning something briefly draws more attention to it – was short-lived. Once the prohibition kicked in, non-resident purchases essentially dried up.
The data also shows that foreign investment in Canadian housing peaked several years ago and has since receded. In the mid-2010s, hot markets like Vancouver saw an uptick in foreign buying. Provincial tracking in B.C. showed foreign buyers comprised about 5% of Metro Vancouver home purchases at the peak in 2016–17. This influx coincided with rapid price increases and public outcry. In response, B.C. introduced a 15% foreign buyers’ tax in 2016 (later raised to 20%), and Ontario followed with a similar 15% tax in 2017 for the Greater Toronto region. These measures had an immediate chilling effect: by 2018 the foreign-buyer share in Vancouver sales dropped to around 1.6% (from over 5% prior). By the time Canada’s federal foreign-buyer ban was announced in 2022, foreign demand was already a shadow of its former self. In fact, the ban’s announcement might have briefly stimulated a small surge of last-minute buying. In late 2022, the share of Vancouver home sales involving a foreign buyer spiked from ~0.9% to ~2.8% as overseas buyers rushed to beat the January 2023 ban deadline. This “Streisand effect” – where banning something briefly draws more attention to it – was short-lived. Once the prohibition kicked in, non-resident purchases essentially dried up.
Figure 2.0
Source: storeys.com
Where (and What) Are Foreign Buyers Purchasing in Canada?
Foreign real estate investment in Canada is highly concentrated – both geographically and by housing type. Contrary to popular belief, non-resident buyers rarely target the entry-level homes sought by first-time local buyers.
Urban Focus: Most foreign purchases occur in large metropolitan areas like Vancouver, Toronto, and Montreal. Within these cities, ownership is clustered in affluent zones. For example, in Vancouver and Richmond, non-residents accounted for 7.8% of home purchases between 2018 and 2020 – nearly double the regional average[3]. In Toronto, foreign ownership was around 3.8% in the core, but negligible in suburban areas.
Foreign real estate investment in Canada is highly concentrated – both geographically and by housing type. Contrary to popular belief, non-resident buyers rarely target the entry-level homes sought by first-time local buyers.
Urban Focus: Most foreign purchases occur in large metropolitan areas like Vancouver, Toronto, and Montreal. Within these cities, ownership is clustered in affluent zones. For example, in Vancouver and Richmond, non-residents accounted for 7.8% of home purchases between 2018 and 2020 – nearly double the regional average[3]. In Toronto, foreign ownership was around 3.8% in the core, but negligible in suburban areas.
Figure 3.0
Source: Statcan
Condominiums and Luxury Real Estate: Foreign investors tend to favour condos and high-end homes. In downtown Montreal’s Nun’s Island, nearly 8% of condos were foreign-owned in 2020, versus under 1% in suburbs[4]. In Toronto’s core, the figure was about 4%. These investors prefer newer, amenity-rich buildings.
Secondary and Rental Properties: Foreigners typically do not occupy the homes they purchase. Many are used as rentals or seasonal properties. Notably, 15–20% of non-owner-occupied condos in Toronto and Vancouver were held by non-residents[5]. This affects rental supply but also raises concerns about vacant units, prompting cities like Vancouver to impose empty-home taxes.
Secondary and Rental Properties: Foreigners typically do not occupy the homes they purchase. Many are used as rentals or seasonal properties. Notably, 15–20% of non-owner-occupied condos in Toronto and Vancouver were held by non-residents[5]. This affects rental supply but also raises concerns about vacant units, prompting cities like Vancouver to impose empty-home taxes.
Figure 4.0
Source: Statcan
Vacation Destinations: Resort towns such as Invermere and Radium Hot Springs have seen significant foreign interest. These areas pushed back against the federal ban, citing economic harm – leading to exemptions for smaller markets and development properties.
Figure 5.0
Source: Statcan
In short, foreign buyers impact specific niches, not the entire market. Smart policy should reflect this nuance.
Do Foreign Investors Really Drive-Up Housing Prices?
Foreign investors are often blamed for Canada’s soaring home prices. Tales of empty condos held by offshore owners or cash-rich buyers winning bidding wars have stoked public anger. But the data tells a more nuanced story.
Nationally, foreign buyers have never been a major force in Canada’s housing market. Even at their peak, non-residents made up just 3–5% of transactions in key cities – meaning 95% or more were local buyers. The federal foreign buyer ban, first enacted in 2023, was justified on the basis that foreign ownership had “fueled worries” about affordability. Yet economists and real estate analysts agree that foreigners were never the primary driver of demand.
From 2015 to 2022, Canadian home prices rose over 60%, far outpacing income growth[6]. During this time, foreign ownership remained in the low single digits. It’s hard to link a small foreign presence with a nationwide boom of that magnitude. Instead, the real culprits were low interest rates, domestic speculation, dual-income households, and underbuilding. Prices did dip slightly , 1–3% after 2022, but this correlated with interest rate hikes, not the foreign buyer ban.
That said, foreign capital has had localized effects. In luxury segments of Vancouver and Toronto, foreign buyers likely inflated prices at the margin. Foreign buyers have on average paid higher than both non-investors and domestic investors. In Vancouver, foreigners paid about 20% more than locals for detached homes in 2019[7]. Foreign demand may have also amplified market psychology – encouraging locals to rush into a market they feared was being “taken over.”
Do Foreign Investors Really Drive-Up Housing Prices?
Foreign investors are often blamed for Canada’s soaring home prices. Tales of empty condos held by offshore owners or cash-rich buyers winning bidding wars have stoked public anger. But the data tells a more nuanced story.
Nationally, foreign buyers have never been a major force in Canada’s housing market. Even at their peak, non-residents made up just 3–5% of transactions in key cities – meaning 95% or more were local buyers. The federal foreign buyer ban, first enacted in 2023, was justified on the basis that foreign ownership had “fueled worries” about affordability. Yet economists and real estate analysts agree that foreigners were never the primary driver of demand.
From 2015 to 2022, Canadian home prices rose over 60%, far outpacing income growth[6]. During this time, foreign ownership remained in the low single digits. It’s hard to link a small foreign presence with a nationwide boom of that magnitude. Instead, the real culprits were low interest rates, domestic speculation, dual-income households, and underbuilding. Prices did dip slightly , 1–3% after 2022, but this correlated with interest rate hikes, not the foreign buyer ban.
That said, foreign capital has had localized effects. In luxury segments of Vancouver and Toronto, foreign buyers likely inflated prices at the margin. Foreign buyers have on average paid higher than both non-investors and domestic investors. In Vancouver, foreigners paid about 20% more than locals for detached homes in 2019[7]. Foreign demand may have also amplified market psychology – encouraging locals to rush into a market they feared was being “taken over.”
Figure 6.0
Source: Statcan
Yet the real crisis is supply. Between 2015 and 2023, Canada’s population grew by 2.5 million, but only 1.8 million new homes were built[8]. Even if foreign buyers had disappeared entirely, the structural shortfall would have remained.
Does Foreign Buyer Bans Hurt Housing Supply?
Beyond demand, proponents against the ban argue that the ban has hindered housing supply. Developers rely on foreign investment to fund projects. Initially, the ban blocked even minority foreign ownership in development companies, vacant land purchases, and equity buyouts – freezing many in-progress builds[9]. Amendments followed: thresholds were raised from 3% to 10%, and exemptions were added for land intended for housing and work-permit holders. Still, many industry leaders argue the damage was done.
In sum, foreign buyers affect housing supply in two opposite ways: if they’re simply competing with locals for the same house, they add demand pressure; but if they are investing in/building new housing, they can increase supply. The current ban, unfortunately, doesn’t do that nuance – it just slammed the door entirely (though with later carve-outs after much lobbying). Countries like Australia take a smarter approach: foreign buyers are encouraged to purchase new builds only, channeling capital into increasing supply. Canada’s blanket ban treated a speculative condo purchase the same as a capital injection into a 500-unit development – a missed opportunity.
Foreign investors are not the root cause of high housing prices, but they can be part of the solution – especially if guided toward new housing supply.
Weighing the Arguments: Scapegoat or Contributor?
With growing scrutiny on foreign investment in Canadian housing, it’s worth examining whether the common claims hold up to evidence.
“Foreign buyers are driving up home prices and pricing Canadians out.”
Verdict: Largely not valid (for the broad market).
Foreign buyers accounted for only ~3% of homeownership pre-ban. Most price escalation stems from domestic factors – low interest rates, supply shortages, and speculative local investment – not a flood of offshore capital. While foreign demand may have marginally increased prices in luxury markets like Vancouver, the average Canadian buyer is competing against fellow residents, not foreign speculators. Even the government’s own data found no meaningful link between foreign buying and affordability.
“Foreigners treat homes as investments, leaving them empty.”
Verdict: Partly valid, but not unique to foreigners.
Non-resident owners often do not occupy properties, and foreign investors hold 15–20% of vacant condos in cities like Toronto and Vancouver[10]. However, domestic investors also use homes as rental assets or short-term rentals, contributing to the same phenomenon. Canada’s housing market has become broadly financialized, where occupancy is secondary to ROI. Vacancy taxes and short-term rental regulations – not nationality-based bans – are more effective policy tools.
“Banning foreign buyers will make homes affordable.”
Verdict: Invalid.
The ban is largely symbolic. With such a small share of foreign buyers, removing them hasn’t significantly impacted prices. Housing remains unaffordable due to domestic supply-demand imbalances. Even New Zealand's 2018 foreign buyer ban had no measurable effect on prices[11]. Extending Canada’s ban to 2027 appears more like political posturing than a substantive affordability measure.
“Banning foreigners is xenophobic scapegoating.”
Verdict: Some truth.
Phrases like “Canadian homes are for Canadians” resonate with public frustration but risk stoking “us vs. them” narrative. Foreigners became convenient scapegoats – while domestic speculation went largely unchallenged. No other G7 country has imposed such a sweeping foreign buyer ban; most rely on targeted taxes or ownership restrictions. Framing foreign ownership as the central threat diverts attention from broader structural problems.
“We need foreign capital to build housing.”
Verdict: Valid.
Foreign investment supports housing supply by funding development and purchasing pre-sale units. The 2023 ban inadvertently blocked project financing, stalling some builds until amendments were introduced. On balance, regulated foreign capital can help address Canada’s housing shortage. Countries like Australia allow foreign ownership of newly built homes – a more strategic model than Canada’s blanket ban.
“Foreign ownership threatens Canadian sovereignty.”
Verdict: Not a major concern.
With foreign owners holding <5% of homes, fears of losing “control” are exaggerated. Ownership doesn’t equate to sovereignty. Canada retains legal and tax authority over all property. Tools like occupancy requirements or vacancy taxes can address community concerns without banning buyers outright.
Canada needs hundreds of thousands of new homes in the coming years. That means attracting capital – not shutting it out. A smarter approach would allow foreign investors to fund new construction while discouraging purchases of existing homes. In a global economy, blocking foreign capital is neither practical nor effective. The ban may have satisfied political optics, but it’s time to replace symbolism with strategy. Foreign investment, when properly directed, should be part of the solution – not the scapegoat.
The Real Estate Institute of Canada (REIC) empowers professionals to lead with insight and integrity in a complex housing landscape. As debates over foreign investment intensify, REIC fosters evidence-based dialogue – bridging policymakers, investors, and practitioners. Through education and research, REIC equips members to champion data-driven, inclusive, and long-term solutions to housing affordability.
Does Foreign Buyer Bans Hurt Housing Supply?
Beyond demand, proponents against the ban argue that the ban has hindered housing supply. Developers rely on foreign investment to fund projects. Initially, the ban blocked even minority foreign ownership in development companies, vacant land purchases, and equity buyouts – freezing many in-progress builds[9]. Amendments followed: thresholds were raised from 3% to 10%, and exemptions were added for land intended for housing and work-permit holders. Still, many industry leaders argue the damage was done.
In sum, foreign buyers affect housing supply in two opposite ways: if they’re simply competing with locals for the same house, they add demand pressure; but if they are investing in/building new housing, they can increase supply. The current ban, unfortunately, doesn’t do that nuance – it just slammed the door entirely (though with later carve-outs after much lobbying). Countries like Australia take a smarter approach: foreign buyers are encouraged to purchase new builds only, channeling capital into increasing supply. Canada’s blanket ban treated a speculative condo purchase the same as a capital injection into a 500-unit development – a missed opportunity.
Foreign investors are not the root cause of high housing prices, but they can be part of the solution – especially if guided toward new housing supply.
Weighing the Arguments: Scapegoat or Contributor?
With growing scrutiny on foreign investment in Canadian housing, it’s worth examining whether the common claims hold up to evidence.
“Foreign buyers are driving up home prices and pricing Canadians out.”
Verdict: Largely not valid (for the broad market).
Foreign buyers accounted for only ~3% of homeownership pre-ban. Most price escalation stems from domestic factors – low interest rates, supply shortages, and speculative local investment – not a flood of offshore capital. While foreign demand may have marginally increased prices in luxury markets like Vancouver, the average Canadian buyer is competing against fellow residents, not foreign speculators. Even the government’s own data found no meaningful link between foreign buying and affordability.
“Foreigners treat homes as investments, leaving them empty.”
Verdict: Partly valid, but not unique to foreigners.
Non-resident owners often do not occupy properties, and foreign investors hold 15–20% of vacant condos in cities like Toronto and Vancouver[10]. However, domestic investors also use homes as rental assets or short-term rentals, contributing to the same phenomenon. Canada’s housing market has become broadly financialized, where occupancy is secondary to ROI. Vacancy taxes and short-term rental regulations – not nationality-based bans – are more effective policy tools.
“Banning foreign buyers will make homes affordable.”
Verdict: Invalid.
The ban is largely symbolic. With such a small share of foreign buyers, removing them hasn’t significantly impacted prices. Housing remains unaffordable due to domestic supply-demand imbalances. Even New Zealand's 2018 foreign buyer ban had no measurable effect on prices[11]. Extending Canada’s ban to 2027 appears more like political posturing than a substantive affordability measure.
“Banning foreigners is xenophobic scapegoating.”
Verdict: Some truth.
Phrases like “Canadian homes are for Canadians” resonate with public frustration but risk stoking “us vs. them” narrative. Foreigners became convenient scapegoats – while domestic speculation went largely unchallenged. No other G7 country has imposed such a sweeping foreign buyer ban; most rely on targeted taxes or ownership restrictions. Framing foreign ownership as the central threat diverts attention from broader structural problems.
“We need foreign capital to build housing.”
Verdict: Valid.
Foreign investment supports housing supply by funding development and purchasing pre-sale units. The 2023 ban inadvertently blocked project financing, stalling some builds until amendments were introduced. On balance, regulated foreign capital can help address Canada’s housing shortage. Countries like Australia allow foreign ownership of newly built homes – a more strategic model than Canada’s blanket ban.
“Foreign ownership threatens Canadian sovereignty.”
Verdict: Not a major concern.
With foreign owners holding <5% of homes, fears of losing “control” are exaggerated. Ownership doesn’t equate to sovereignty. Canada retains legal and tax authority over all property. Tools like occupancy requirements or vacancy taxes can address community concerns without banning buyers outright.
Canada needs hundreds of thousands of new homes in the coming years. That means attracting capital – not shutting it out. A smarter approach would allow foreign investors to fund new construction while discouraging purchases of existing homes. In a global economy, blocking foreign capital is neither practical nor effective. The ban may have satisfied political optics, but it’s time to replace symbolism with strategy. Foreign investment, when properly directed, should be part of the solution – not the scapegoat.
The Real Estate Institute of Canada (REIC) empowers professionals to lead with insight and integrity in a complex housing landscape. As debates over foreign investment intensify, REIC fosters evidence-based dialogue – bridging policymakers, investors, and practitioners. Through education and research, REIC equips members to champion data-driven, inclusive, and long-term solutions to housing affordability.
[1] www150.statcan.gc.ca
[2] www150.statcan.gc.ca
[3] www150.statcan.gc.ca
[4] cmhc-schl.gc.ca
[5] cmhc-schl.gc.ca
[6] news.westernu.ca
[7] www150.statcan.gc.ca
[8] reuters.com
[9] storeys.com
[10] cmhc-schl.gc.ca
[11] radio-canada.ca
[2] www150.statcan.gc.ca
[3] www150.statcan.gc.ca
[4] cmhc-schl.gc.ca
[5] cmhc-schl.gc.ca
[6] news.westernu.ca
[7] www150.statcan.gc.ca
[8] reuters.com
[9] storeys.com
[10] cmhc-schl.gc.ca
[11] radio-canada.ca
Allwyn Dsouza is REIC’s Senior Analyst, Market Research and Insights. He can be reached at [email protected]. Media enquiries can be directed to [email protected].