Canada Should Temporarily Ban Foreign Homebuyers, Rezone Cities – Minister of Housing | World news

OTTAWA (Reuters) – Municipalities should dezone widely to allow for greater density and Canada should temporarily ban foreign buyers to help ease the housing affordability crisis facing residents, the Minister of the Government of Canada said on Tuesday. Country housing.

Ahmed Hussen told Reuters in an interview that housing should be reserved for Canadians, not passive foreign investment, and that he supports Canadian cities implementing density measures like those recently rolled out in New Zealand, which allow you to build up to three houses on most single-family lots.

“I support this,” he said. “This is one of the ways to easily increase the supply of housing by using the same land for single-family homes and creating more units.”

“Any measure which increases the supply of housing, which intensifies the use of land, which builds more housing and which frees up more housing on the same surface, is a good thing,” he added.

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Canada grapples with a national housing crisis, as growing demand from the COVID-19 pandemic has spread beyond major cities and into smaller centers, which are unable to keep up with supply .

A typical house in Canada now costs C $ 780,400 ($ 603,791), up 25.3% this year and 81.4% since November 2015, when Prime Minister Justin Trudeau’s Liberals took power. Home price increases in smaller centers exceeded those in large cities during the pandemic.

Trudeau, who won his third term in September, pledged new measures to improve housing affordability, including a temporary ban on foreign buyers and 1.4 million new or renovated homes over four years.

Hussen said he supported the ban on foreign buyers, but provided no details on how and when it would be implemented, deferring to Finance Minister Chrystia Freeland.

Hussen noted that a 1% tax on vacant or underused real estate owned by foreigners would go into effect on January 1 and said the Liberal government was working hard to put in place other taxes, such as a tax. anti-rollover, as soon as possible.

“This will allow us to reduce speculative demand in the market. It will help curb excessive price growth,” he said.

Canada has limited statistics on foreign home ownership. In 2019, 4.3% of homes in Vancouver were owned by non-residents of Canada, rising to 13.6% for newer condos, according to official data. In Toronto, 7.7% of newer condos are owned by non-residents.

Hussen said consultancy work has already started on designing an option-to-buy rental program that will help tenants buy their first home. The Liberals also promised a tax-free down payment savings program for first-time buyers.

These two measures alone will cost taxpayers C $ 4.2 billion over four years, according to Trudeau’s election platform. They have not yet been officially budgeted.

But critics fear that aid to first-time buyers will push up house prices, unless combined with measures to curb demand. Hussen will consider measures such as larger down payments for owner investors, but has given no time frame for the work to be completed.

“It has been dealt with by other countries,” he said. “And it will be interesting to see what some of these measures they have implemented and what results have they had.”

New Zealand has tightened mortgage loan requirements for investors this year in an attempt to slow the rapid escalation in prices. In October, the country carried out widespread rezoning to allow for greater housing density.

($ 1 = 1.2925 Canadian dollars)

(Reporting by Julie Gordon in Ottawa; Editing by Peter Cooney)

Copyright 2021 Thomson Reuters.

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