Federal budget pledges billions for housing, extends foreign buyer ban
The government will add $13 billion to a housing agency and extend a ban on foreign residential property purchases.
OTTAWA · The Liberal government's new budget commits billions of dollars to boost Canada's housing supply. Tabled on November 5, the plan includes $151.5 billion in net new spending over five years. A key housing measure is an additional $13 billion in capital over ten years for Build Canada Homes, a federal agency created last year to accelerate construction. This new investment brings the agency's total capital to $45 billion and sets it "on a path" to build 200,000 new homes across the country in the next decade. The government also plans to spend $1.5 billion over four years starting in 2027-2028 to prepare federal land for housing projects. It will introduce legislation to extend the existing ban on foreign purchases of residential property. That ban, which was scheduled to end in January, would now continue until January 1, 2029.
This budget arrives as the housing market reacts to the Bank of Canada's recent interest rate increase. Data from National Bank of Canada shows variable-rate mortgages grew in popularity this year, with nearly half of new or renewed mortgages in 2026 being variable as of September. That figure was below 10 per cent in 2024. The central bank's hike last week pushed variable rates slightly higher, causing some mortgage shoppers to reconsider their options.
Experts say whether a variable rate remains worthwhile depends on factors like a borrower's risk tolerance and financial cushion. They note that for many shoppers, especially those opting for longer terms, a variable rate could still prove to be the cheaper choice over time. In Toronto's real estate market, observers report a noticeable hesitation among both buyers and sellers this autumn. Activity slowed in the latter half of October as people awaited outcomes from the U.S. midterm elections and sought more clarity on economic policies. The Bank of Canada's rate move has heightened budget concerns for many, with economists forecasting a sluggish end to the year for the Greater Toronto Area market. Prospective buyers are now weighing how much further home prices might drop against the risk of future rate increases. Realtors are working to help parties reach agreements in this uncertain climate.
With files from The Globe and Mail