Canada: Prime Minister Trudeau wants to ban foreigners from buying a house – Economy

It is of course a good thing to compare the Canadian charm pin Justin Trudeau with Donald Trump, of all things, that two and a half quintal steam hammer that had also strained relations between the United States and its neighbors in the United States. north for years. And yet that is exactly what a columnist for the Bloomberg News Agency did: Trudeau is certainly a different type, but the Prime Minister is increasingly leaning into the same bag of populist tricks as Trump has always used.

One of the things that motivates the commentator is Trudeau’s announcement that if he wins the general election in three weeks, foreigners will be banned from buying Canadian homes and apartments for two years. This is not about the poor eater who wants to start a new life somewhere in the vastness of the second largest country on the planet. Rather, Trudeau takes a look at wealthy speculators from China, Russia and the United Arab Emirates, who have also helped push house prices to skyrocketing heights in Canada. More and more citizens are therefore unable to find affordable housing, and at the same time tens of thousands of apartments are empty: many investors do not buy their homes to live there, but because they see it as a lucrative investment.

The drastic rise in house prices, especially in big cities like Vancouver and Toronto, has become the biggest issue in the election campaign in recent weeks. In the national average, a last house cost almost 700,000 Canadian dollars (about 480,000 euros), or 38% more than a year ago. The favorite is the west coast metropolis of Vancouver, which is particularly popular with Chinese investors. The city council already levies a vacancy tax for “haunted houses” as well as a 20% purchase tax for buyers who do not have a place of residence in Canada. However, neither has stopped the surge in prices nor increased the supply of small and medium-sized apartments.

In many countries, politicians are looking for ways to stop soaring house prices

Besides the head of government, the best candidates from other parties have therefore also submitted proposals to curb speculation, especially Trudeau’s biggest rival, Erin O’Toole. The leader of the Conservative Party accused the outgoing president of being “six years old to do something and not doing it right”. Trudeau, whose lead in the polls recently waned relative to O’Toole, said we should no longer watch “foreign wealth being parked in homes where people should be living.” It is “not normal that you cannot build your own life in the environment in which you grew up, that you cannot start a family and that you cannot age any more”, declared the head of government.

If Trudeau actually implemented the plans, it could set an example far beyond Canada. Executives and their challengers around the world are looking for ways to slow or even stop the spike in house prices – so far without resounding success. This is also due to the fact that, given low interest rates and high stock prices, apartments are viewed by investors as both lucrative and stable investments. The pandemic has increased demand – for example in the United States, where, in addition to foreigners, many well-paid residents are also looking for a larger apartment or second home with space for a home office.

In his Bloomberg column, author Trudeau admits to having ideas that would be much more effective in the fight against soaring house prices than those currently being discussed – especially the massive financing of new buildings. Such recipes are clearly not sensational enough for an election campaign. “Holding foreigners responsible for problems at home is politically more tempting,” the commentator concluded. Just Trump.

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