Could easing the foreign buyer ban in the federal budget spur housing development in B.C.?

The federal government is proposing to let foreign buyers purchase newly built homes for the first time since a nationwide ban took effect in 2023. Some housing experts say the change could help reduce unsold condo inventory and get more projects moving in Metro Vancouver.

The measure is part of the 2026 federal budget, which would extend the ban on foreign purchases of existing residential properties until Jan. 1, 2029, while exempting newly built homes. The government says the change is intended to unlock more investment in new housing supply.

Brendon Ogmundson, chief economist with the B.C. Real Estate Association, said the policy follows an Australian model that allows non-residents to buy newly built housing while preventing them from buying existing homes. He said the association has argued for this approach because it would help developers finance new supply, and that the budget adopted it.

Metro Vancouver’s housing market remains sluggish. Greater Vancouver Realtors reported that September home sales were down 8.4 per cent from a year earlier and 25 per cent below the 10-year seasonal average.

Andy Yan, director of The City Program at Simon Fraser University, estimates that roughly 4,500 completed condominium units across Metro Vancouver remain unsold. He said allowing foreign buyers into the new-home market appears intended to help sell those units. Ogmundson said non-resident buyers would be able to purchase the unsold new condos. He added that regulations and taxes are in place to discourage vacant homes, and said the change could help reduce the inventory, unlike some of the problems seen in the 2010s.

Vancouver planning and development consultant Michael Geller said the change would be viewed positively and have some impact, but not necessarily reshape the market dramatically. B.C. still has its own foreign ownership rules, he noted: buyers face a 20 per cent foreign buyers tax on top of the property transfer tax. It remains unclear whether B.C.’s newly elected Conservative government will change those provincial measures.

Supporters of lifting the federal ban also argue that attracting more buyers could help developers secure financing for future projects. High interest rates, rising construction costs and weak pre-sale activity have made it harder for some developments to move ahead in recent years. Andrey Pavlov, a professor at Simon Fraser University’s Beedie School of Business, said the measure could improve pre-sale demand, which is often key to obtaining construction financing. He said investor purchases could help sell pre-sale units and allow builders to secure financing for construction.

The budget also expands access to 30-year mortgage amortizations for some first-time homebuyers. Supporters say longer amortizations could make monthly mortgage payments more manageable; critics argue they do little to address the underlying cost of housing.

Whether the measures will improve affordability remains debated. Supporters say they could clear unsold inventory and encourage more homebuilding while Metro Vancouver sales remain well below historical levels. All the experts agree, however, that significant change in B.C.’s housing market would likely require coordination among all levels of government.