Workers at the construction site for a condo tower in Delta, B.C., on July 2. B.C. housing industry players said in a letter to Prime Minister Mark Carney that if nothing changes, housing supply could continue its slowdown.DARRYL DYCK/The Canadian Press
Major players in B.C.’s housing industry are calling on federal and provincial governments to loosen restrictions on foreign investment in Canadian homes to avoid a crash they say will deepen the country’s housing crisis.
The B.C. industry players have written to Prime Minister Mark Carney and federal Housing Minister Gregor Robertson outlining their concerns. Toronto developers, whose industry is struggling with some of the same challenges, have said they support the measures being urged.
The letter, which was also sent to B.C. Premier David Eby and was obtained by The Globe and Mail, warns that if something doesn’t change, housing supply – beset by high construction costs, high land prices, municipal fees and erratic U.S. tariff policies – will continue its already dramatic slowdown. Housing prices will start to rise as a result, it notes.
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Earlier this month, Mr. Robertson told The Globe that his government was considering some sort of support to help the residential development sector.
The letter, signed by companies such as Beedie Living, Westbank, Amacon, Cressey and Polygon, argues that having some level of foreign investment to provide the capital for the early stages of condo projects is key.
“New condo development requires presales to meet financing thresholds, part of which relies on investor-focused buyers. Closer to occupancy, sales typically shift more toward owner-occupiers.
“In the absence of foreign investors, fewer projects will meet presale financing thresholds, suppressing supply delivery, which serves no one in a housing crisis as projects will not start,” the letter says.
As housing prices spiked over the past decade, B.C., Ontario and other Canadian jurisdictions introduced taxes aimed at discouraging foreign investment in the country’s real estate. The federal government banned foreign housing investment in larger metropolitan areas in 2023 and has extended that ban to 2027.
But now a series of economic shifts have led to the most severe downturn in the Canadian residential development industry in decades.
The letter emphasizes that foreign investment in housing should be handled differently from the way it was before, with some limits.
“While we understand that the ban was implemented to protect housing supply for Canadians, it has unfortunately impacted the construction industry,” it says.
The letter notes an Australian policy, implemented earlier this year, which restricts foreign investment in established homes, but allows it for new builds and presales.
The restrictions on foreign investment in residential real estate were well received by voters alarmed at rising housing prices and concerned that developers were catering to foreigners eager to purchase shoe-box-sized condos as easy-to-rent investments.
But Hani Lammam, executive vice-president at the long-time Vancouver building company Cressey Development Group, said residential construction in major cities in Canada can’t function without the ability to get capital from somewhere besides Canadian citizens, companies or pension funds.
People who are looking to buy are generally unwilling to tie up large sums of money for a long time before a project is completed.
“To rely on the end user is asking too much, to have to make a buy decision four or five years before,” he said.
His company, which typically builds five to eight projects a year of rentals and condos, did not start any new projects last year.
In Vancouver, major companies have been laying off staff, projects have been paused and some have declared bankruptcy. Developers with the financial ability to do it are slashing prices, and at least one condo project was cancelled even after presales started.
In Toronto, sales have been crashing and the inventory of condos has been rising. A July 15 report from Urbanation, a Toronto company that tracks the condo market, said there were about 24,000 unsold units by the end of June, while sales are at a dribble. The Greater Toronto and Hamilton Area saw only 502 condo sales in the second quarter of 2025.
While that kind of turmoil is providing some immediate relief to today’s buyers, who are seeing developers drop their prices or provide incentives to make purchasing more attractive, people in the industry say the current trend will result in so little supply in the next two years that prices will start going up again.
The downturn is worse than what the industry experienced in 2008 during the global financial crisis, when construction activity plummeted. Several developers turned to rental at that point and presale condo projects slowed down briefly but recovered within a year, in part because of the foreign capital that was still pouring into the city.
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Chris Gardner, chief executive officer of the 5,000-member Independent Contractors and Businesses Association, said the construction industry in B.C. is being devastated as companies put projects on hold because of uncertain costs and financing – something that foreign investment can help alleviate.
“We have not seen layoffs for builders like this in more than a decade,” said Mr. Gardner. “I think people in government don’t understand how serious this is and how rapidly things are unwinding.”
But he and many others in the development industry say if foreign investment is allowed once again, policy makers should learn from the mistakes of the past that led to huge numbers of single-family homes and condos being bought up and left empty.
“We know what went wrong and now we have to do it in a way that’s going to work for British Columbians,” said Mr. Gardner. “We should be open to investment but it shouldn’t be a free-for-all.”
Although foreign investors represent a small proportion of Canadian homeowners – Statistics Canada estimates have pegged it at between 2 per cent and 6 per cent – they can have an outsize impact when all their investing is done in a few targeted neighbourhoods.
Scott McLellan, chief operating officer for Toronto developer PlazaCorp, said foreign investors are “paramount to our industry.”
If foreign investors are economically motivated, they should be allowed to buy residential real estate in Canada, he said.