Foreign homebuyers ban likely not a factor in Calgary's real estate market: experts

As part of the federal budget and in an attempt to ease Canada's housing crisis, Ottawa is banning home buying by foreign investors, for the next two years.

Some industry professionals and real estate experts say the ban may have an impact in larger cities, but it won't target Calgary's affordable housing issues.

Karen Fawcett says her real estate business is bustling in a booming Calgary market.

"With the price of oil and everything coming up I think real estate in Calgary is going to be good for the rest of the year," she said.

However she says the market is not overheated and is not the intended target of a federal program which bans foreign buyers from buying houses in Canada for two years.

"My hope would be that the federal government in implementing a strategy like that, would be more regional with their approach, and not (use) such a blanket approach," said Fawcett.

Vancouver and Toronto, where the average house price has skyrocketed over $1 million, could benefit from Ottawa's attempt to cool those markets, she added.

One of the owners of Charles Real Estate brokerage says Calgary doesn't see a trend of out-of-country investors buying Calgary properties that remain vacant, but they are seeing buyers from other provinces make offers on Calgary homes.

"We're seeing a lot of interprovincial movement. We're seeing a lot of people coming from Vancouver, people coming from Toronto, just because they are getting pushed out of those hot markets," said Spencer Stupka.

"An important question a lot of people are asking right now is if Calgary is catching up to other major markets in Canada, or are we just going to be back onto our typical seven-year-cycle?" he said.

ALBERTA MARKET HEATING UP

The Alberta Real Estate Association (AREA) says Calgary's market is heating up with increased prices, but the increased activity matches pre-pandemic levels.

"(Calgary benchmark home prices) are just approaching pricing that we had in 2014, and 2015, and 2016," said CEO Brad Mitchell, before adding, "housing is still very affordable in Alberta."

Mitchell adds that most of the sales his members broker are either locals or from buyers out-of-province, not out-of-country.

"I'm not sure there's gonna be a huge effect here," he said.

BANNING FOREIGN BUYERS MISSES THE MARK: RESEARCHER

One real estate researcher says banning foreign buyers is a popular policy but misses the mark when it comes to addressing the housing supply crunch.

"The way to really move the needle on affordability is to really increase housing supply. And we see in some markets, it's hard to do that," said Alexander Whalley, research fellow at the Westman Centre for Real Estate Studies at the University of Calgary.

He adds that research shows these types of bans have a mild temporary affect on cooling the markets where they are implemented, albeit short-lived.

Whalley says the vast majority of home purchase transactions are between Canadians, and that local governments need to be involved in decisions to increase housing supply.

"There probably needs to be more cooperation between the federal government and local governments in terms of how to how to really address this issue," said Whalley.

The foreign buyers ban applies to condos, apartments, and single residential units.

Permanent residents, foreign workers, and students will be excluded from this new measure.

Foreigners who are purchasing their primary residence here in Canada will be exempt.

REAL ESTATE COUNCIL STATEMENT

The policy change will be legislated, which means the Real Estate Council of Alberta (RECA) will respond to complaints.

RECA administers the Real Estate Act on behalf of the Alberta government.

In a statement to CTV News, a RECA spokesperson says:

"RECA sets and enforces the standards of practice in the Real Estate Act rules. Section 41(g) states all licensees must strictly adhere to all legislation pertaining to trading in real estate, dealing in mortgages, or providing property management or condominium management services. This includes any federal legislation on foreign real estate ownership.

"RECA is legislatively required to review all complaints regarding licensees, and has the authority under the Real Estate Act to undertake investigations, hold conduct proceedings, and issue disciplinary decisions.

"When details of the legislation become available, RECA will be in a better position to provide further comments."