The federal government has extended its foreign home ownership ban until 2027.

The decision applies to purchasers of condos as well as single-family homes. But it does not apply to buyers of residential buildings containing four or more units.

“By extending the foreign buyer ban, we will ensure houses are used as homes for Canadian families to live in and do not become a speculative financial asset class,” Finance Minster Chrystia Freeland said in a news release.

“The government is intent on using all possible tools to make housing more affordable for Canadians across the country.”

The ban took effect in 2023 and was due to expire at year-end 2024.

Ottawa views the extension as a way to put a dent in Canada’s housing shortage. But critics have argued that foreign buyers, who purchase their assets largely for investment purposes, do not significantly affect housing supply.

Tom Davidoff, an associate professor in UBC’s Sauder School of Business, told the Canadian Press that he saw no pressing need for the ban to be lifted. But Davidoff said empty-home taxes and provincial foreign-buyer taxes have reduced the impact of foreign home buying.

“How much juice is left in that lemon to squeeze? Because foreign buying has been obliterated in B.C. and Ontario by these taxes and so you’re left with markets that have been less adversely impacted,” Davidoff told CP.

But, in the news release, Ottawa contended that foreign purchases of Canadian residential real estate have increased housing affordability concerns for years, particularly in major markets. And, the ban is just one part of the government’s plan to make housing more affordable for Canadians.

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