Canada's Foreign Buyer Ban Is Ending: What London, Ontario Homeowners Need to Know

The federal government's ban on foreign home buyers is set to expire at the end of 2026, and Ottawa is already signalling that what comes next could look very different. Rather than extending the blanket ban, the government is considering targeted exemptions that could allow foreign investment in specific areas of the housing market.

For homeowners and buyers in London, Ontario, this shift is worth understanding—even if foreign investment has historically been a much smaller factor here than in markets like Vancouver or Toronto.

What the Current Ban Looks Like

The Prohibition on the Purchase of Residential Property by Non-Canadians Act came into effect in January 2023. It was designed to cool overheated housing markets by preventing non-Canadians from purchasing residential property.

But here's the thing: even before the ban, foreign buyers accounted for just 1.1% of home sales in British Columbia in 2021. In cities like London, that percentage was likely even smaller. And despite the ban being in place, average Canadian home prices still rose more than 20% between 2021 and 2026.

The takeaway? Foreign buyers were never the primary driver of affordability challenges—especially in mid-sized markets like ours.

What Could Replace the Ban

Ottawa is looking at models similar to Australia's approach, which allows foreign investment in:

- New construction projects - Redevelopment projects - Vacant land intended for development

Canada already permits some exemptions along these lines, but the next version of the policy may expand them significantly. The goal would be to channel foreign capital toward building new housing supply rather than competing with local buyers for existing homes.

Why This Matters for London's Housing Market

London has experienced significant growth over the past several years, with many families relocating from the GTA in search of more affordable housing. Neighbourhoods like Byron, Masonville, and Wortley Village have seen strong demand, with single-family homes typically ranging from $550,000 to over $1 million depending on location and features.

If foreign investment is redirected toward new construction, it could help address one of the biggest challenges facing our market: supply. CMHC estimates Canada needs to build 380,000 to 430,000 homes per year through 2035 to meet demand. That's a massive undertaking, and additional capital—foreign or domestic—could help make it happen.

For London specifically, this could mean more purpose-built rental developments, more infill projects in established neighbourhoods, and potentially more mixed-use developments along corridors like Commissioners Road or near Western University and Fanshawe College.

What This Means for You

If you're a current homeowner in London, this policy shift is unlikely to dramatically change your property's value overnight. The fundamentals of our market—proximity to Toronto, strong local employment, excellent schools, and a high quality of life—will continue to drive demand.

If you're a buyer, the focus on new construction could eventually mean more inventory options, though that will take time to materialize.

And if you're an investor? Keep an eye on how these policies evolve. There may be opportunities in new construction and development that benefit from increased capital flowing into the sector.

The Bottom Line

The conversation around foreign buyers is shifting from "should we ban them?" to "where can foreign investment actually help?" For a growing city like London, that's a nuanced discussion worth having.

If you have questions about how these changes might affect your real estate plans in London, I'd be happy to chat. Reach out to me at Calford & Co. Real Estate Team—I'm always here to help you navigate the market with confidence.