Following an increase in real estate market values, the Canadian government has placed a ban on foreigners from acquiring residential properties.

The law was passed by the North American nation after the Covid-19 pandemic began, although it became effective on Sunday, January 1, 2023, In an effort to provide additional housing options for locals experiencing a housing shortage.

Although, the legislation contains several exclusions that let non-citizens, such as refugees and legal permanent residents, purchase a property.

According to the Canadian Real Estate Association, average home prices have fallen from a peak of more than Can$800,000 (US$590,000) at the start of 2022 to just over Can$630,000 (US$465,000) last month.

Canada made this decision, which will only be in effect for two years, because some lawmakers began to suspect that investors were driving up the supply of homes by driving up prices, which led to a sharp rise in prices.

Last year, Justin Trudeau, the prime minister, and the Liberal Party claimed that the appeal of Canadian homes was drawing profiteers, powerful corporations, and foreign investors.

Ottawa also clarified in late December that the ban will only apply to city residences and not to recreational properties like summer cottages.

During the 2021 election campaign, when home ownership was out of reach for many Canadians due to skyrocketing prices, Trudeau offered this short-term, two-year policy.

The campaign website states that this is causing a serious issue with underutilized and unoccupied housing, rife speculation, and increasing prices.

The Liberals discreetly introduced the Prohibition on the Purchase of Residential Property by the Non-Canadians Act after winning the 2021 election.

According to an Associated Press story, major cities like Vancouver and Toronto have also enacted levies on non-residents and vacant residences.

However, experts have pointed out that the ban on foreigners who covered less than 5 percent of home ownership will not bring a solution to the issue.

Instead, they believed a need for more housing construction to meet the demands of homes for locals.

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