Canada is facing a housing crisis, and the government is considering some unconventional solutions, including measures such as a ban on investment purchases and a ban on blind bidding.
Canadian house prices have soared 22% in the past year, and the median has hit an all-time high, according to the Canadian real estate association. Material shortages and soaring construction costs have also plunged the country into severe supply shortages. Bank of Nova Scotia(Bank of Nova Scotia) estimates that the country has less housing per 1000 residents than any other G7 country.
The Canadian government is taking a multi-pronged approach to try to solve the problem. On the supply side, the Trudeau government last week launched a plan to build 1.4 million homes over the next four years.
In addition, the Canadian government is considering banning blind bidding, meaning that bidders can see the asking price of the house, but not the bids of other potential buyers. This has been criticized as a way for sellers to raise prices. Canadian Prime Minister Trudeau said in a speech on August 24 that banning such tenders would help "crack down on predatory speculators" and establish a fairer market.
The Canadian government also plans to ban the purchase of Canadian property for investment purposes. The property market in Canada's major cities is pouring in a growing number of foreign buyers who are hoping to profit from soaring house prices.
Under the Canadian government's plan, foreigners will be banned from buying houses in Canada for a period of two years, and taxes will be extended on vacant houses owned by foreigners.