Canada banned foreigners from buying property in 2022. And it seems that they have managed to stop the real estate bubble for now

If we think that in Spain real estate prices are crazy, Canada is downright a madhouse. In 2022 we already talked about the great bubble they were living in, with Real estate prices that took 60% of household income and with an average price that almost reached half a million dollars.

The market was so crazy that the Government decided to take an unprecedented measure: prohibiting foreigners from buying housing. This measure was to last two years but given its success They have decided to extend it another two years, until January 2027.

How has the measure worked?

The truth is that since the measure was approved, real estate prices began to fall. Then they rose a little and have fallen again. The conclusion is that prices remain at a similar level to those of 2020 but well below the 2022 peak.

Of course, this is not the only measure Canada has taken to combat rising housing prices. Public investment in housing has doubled since 2015. And this investment is to build new homes, renovate and provide municipalities with funds to streamline construction procedures.

However, the ban has had its effect, preventing foreign investors or simply American citizens (who are richer and live nearby) may add pressure to the market.

Would such a measure work in Spain?

In Spain, purchases by foreigners are quite important (Currently 15%), especially in holiday areas but also in large cities, as they are often a good investment. It would certainly be a controversial measure that could ease the pressure, although it would certainly not prevent EU citizens from buying a home, only to non-EU citizens.

It would also be necessary to see if it is a fair measure. It is one thing to prevent purchases that aim to invest in a market that is hot and another to Foreigners residing in Spain cannot buy a home if they wish to do so.

Another issue to consider is that Spain has a very significant income from tourism (in fact our economy is doing well simply because of tourism) and if foreigners were prevented from buying housing Maybe we will stop being such an interesting tourist destination..

So such a measure would have many edges, although it could relieve the pressure. The fundamental thing about the Canadian issue is that it is not the only measure, but they are injecting a lot of public money to reduce real estate costs and In Spain we are not doing anything relevant in this regard..