Should Foreign Buyers Be Banned?

Canada has a housing shortage. But at the same time, parts of the country have too many condominiums for sale.

Those two statements sound contradictory. They’re not.

Toronto has experienced a historic collapse in new condominium sales. In 2025, only about 1,600 new condos were sold across the Greater Toronto and Hamilton Area. That was down roughly 60 percent from the previous year and approximately 95 percent from the peak recorded in 2021.

This is more than a slow market. It represents the failure of the financial machinery that produced much of Canada’s new urban housing.

A condominium project is usually financed in stages. Before a lender advances construction financing, the developer must demonstrate that a significant percentage of the building has been sold. Purchasers sign agreements and provide deposits. Those presales give the lender confidence that the completed units will generate enough revenue to repay the construction loan.

The foreign-buyer ban was politically simple. Foreign buyers were portrayed as part of the affordability problem, so excluding them appeared to protect Canadians.

The emerging condominium crisis reveals that capital performs more than one role. It can inflate the price of existing assets, but it can also finance the production of new ones.

Canada may now be forced to decide whether it wants less foreign ownership or more housing badly enough to accept the capital required to build it.

That is the tension.

The country did not eliminate the need for investor capital. It merely reduced the number of investors allowed to provide it.

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