Canada has one weird trick to help with housing affordability—sell the new homes you can’t afford to foreign buyers. That’s not a mistake; it’s the pitch in Canada’s Budget 2026, which will extend the foreign buyer ban until 2029. However, this time they plan to exempt foreign buyers to clear the stagnating inventory. Ottawa frames this as a win for affordability despite all evidence suggesting otherwise. 

Canada To Allow Foreign Buying of New Homes For “Affordability”

Canada’s existing ban on foreign ownership is set to expire in just under two months. Despite quietly inserting exemptions in the ban just 86 days after the law took effect, policymakers say they’ll renew the policy. Sort of. 

“[Canada will] extend the ban on foreign purchases of existing residential properties for two years, to January 1, 2029, while exempting new residential properties,” reads Budget 2026. 

That’s right. Policymakers plan to reopen foreign buying of new homes, the segment that sparked the ban in the first place. The doublespeak doesn’t end there. 

“This would help protect housing affordability by keeping the vast majority of the market available for Canadians, while unlocking additional investment in new housing supply,” explains Budget 2026.  

Ottawa Wants Foreign Investment To Help Build More Housing

More supply was supposed to bring down prices, but that didn’t happen. Billions in tax incentives stimulated building new supply, but prices remain out of reach. New home sales in cities like Toronto are near record lows, while developers sit on record inventory. Weak demand hasn’t brought prices down much—in fact, home prices are near highs in most provinces. With home prices requiring nearly double the median household income to buy at these levels, Canadians can’t afford to buy a home. 

Despite years of warnings that weak sales will slow construction, new building remains elevated. In fact, elsewhere in Budget 2026, policymakers boasted about their contribution to roughly 250,000 annualized new home starts in the first half of 2026, 20% above the 2015-2019 average. However, the narrative of slow sales threatening new home construction has seen taxpayers back billions in developer bailouts. Now Ottawa is hoping foreign buyers will be a further bailout for developers. 

Foreign Buyers Were Concentrated In New Homes Before The Ban

Policymakers may be claiming that ignorance is strength, and the foreign buyer ban was always to target existing stock. But a quick trip down the data memory lane makes it clear pretty fast that new homes were the primary issue.  

The 2020 property records that led Ottawa to create the ban show a concentration in new condos (post-2016 builds). Almost 1 in 7 (13.4%) of BC’s new condos were owned by non-residents that year, the highest among the four provinces studied. Non-residents also piled into Nova Scotia (11.1%), New Brunswick (10%), and Ontario (9.2%). Most of these new condos were in major cities. 

Toronto may sound light with non-residents owning 7.7% of new condos, according to 2019 property records. However, keep in mind the region represented 1 in 6 home sales across Canada then. Even so, it looks tiny in contrast to the 13.6% in Vancouver. Of course, Canada’s current housing minister MP Gregor Robertson doesn’t need a refresher—the Vancouver-based minister was the Mayor of Vancouver at the peak of its foreign buying boom. 

Despite arguing in favour of foreign capital in housing recently, he sang a different tune back then. Back in 2016, he blasted the Province for not imposing taxes to slow buying. “Middle-class Canadians being able to buy a house in Vancouver and Toronto, those days have probably passed because the [foreign buyer] interventions didn’t come,” said then-Mayor Robertson. 

Well, if middle-class families can’t afford housing in the rest of Canada now, why not go all in? 

Canada Wants Its Foreign Buyers Back, But Will They Return?

First off, when Canada says “non-resident investment,” it almost entirely means Chinese investors, representing roughly 70% of that demand. These buyers were driven by a reputation of a financial system free from political persecution, wealthy students looking for prestigious education, and a scramble of capital looking to be laundered in Canadian housing—much of it fleeing China’s anti-corruption crackdown. 

Vancouver’s foreign home buyer boom began when wealthy Hong Kongers sought investment safety. Canada’s financial system is no longer viewed as a system free from political persecution. The shift extends beyond Canada, with Beijing advising China’s elites to pull their investments out of Western countries. The country recently tightened outbound investment even further. 

China used to be Canada’s number one source of international students. Canada has since traded in its prestigious reputation for one better known as a back door to immigration. China has since gone from being the number one source of foreign students to falling behind Guinea. Maybe Guinean students will fuel the new housing demand.  

The opaque system that made Canadian real estate the perfect asset for money laundering has also since come under scrutiny. The use of Canada’s banks to launder money through real estate was well known, facilitating billions in transfers. Canadian banks have since received a few slaps on the wrist, paid billions in fines, and come under much tighter oversight. Darn it. Why are regulators so anti-supply, preventing affordability!  

None of this is to say that Canada won’t see a rise in the number of foreign buyers. However, it’s unlikely to be from the source that drove investor demand before. A new market may be developing, especially since it’s common to sell new homes cheaper overseas to prevent local prices from falling. That might even be more enticing if Vancouver’s Condo King negotiated the foreign buyer tax incentives he was working on with the PM.