B.C. Shuts Door on Foreign Capital

Presales in Canada are down, projects are stalling and developers want foreign capital back. B.C. says no.

British Columbia Premier David Eby and Housing Minister Christine Boyle are standing firm against pleas from major developers to reopen the province’s housing market to foreign capital, the Vancouver Sun reported, dismissing the old model of speculation-fueled presales as “dead.”

The rejection comes after a coalition of Canadian builder heavyweights, including Westbank, Polygon, Strand, Intracorp, Amacon and Mosaic, sent a letter this week urging federal and provincial leaders to reconsider restrictions on foreign residential investment.

They blame the 2023 national ban and B.C.’s longstanding foreign buyer tax for a sharp drop in presales and new housing starts, which fell nearly 50 percent year over year in March. The developers described a funding logjam with banks refusing to finance new projects without a reliable share of foreign-backed presales.

“If projects don’t go forward, there will be an inventory decline in two-to-three years time, which means we will not have enough homes for the population that we have, so that will drive prices back up,” said Wesbild CEO Kevin Layden, who warned conditions are worse than during the 2008 financial crisis. “We want to allow foreign investors to invest in these projects so we can get them built.”

But the province isn’t budging.

“We’ll continue to do all of that work and continue to listen and talk through ideas,” Minister Boyle said Wednesday. “But we are not going back to the Wild West days of empty condos, and foreign investment racking up the prices.”

Premier Eby echoed the sentiment, arguing that foreign money had inflated prices far beyond local wage growth. He brought up one recent poster child: CURV, a planned 60-story luxury tower once billed as the tallest “passive house” in the world. Its capital stack leapt from $16.8 million to $69 million in just a few years, but weak presales, abandoned affordability promises and mounting debt pushed the project into receivership. It had, at one point, offered a Porsche as an incentive to prospective buyers.

“If foreign capital can help build housing for Canadians and British Columbians, great,” Eby said. “But if the foreign capital is just housing that is going to sit empty in the middle of downtown Vancouver, like the CURV building, well, forget about it. That model is dead.”

Canada’s foreign buyer ban, which runs through 2027, bars non-Canadians from purchasing most residential properties, though exemptions exist for larger multifamily buildings. That overlap means B.C.’s tax is still expected to generate $40 million next year despite a federal chill.

The standoff reveals a deepening rift between policymakers focused on affordability and builders focused on feasibility.

U.S. developers watching Vancouver’s market, long seen as a test case for global capital limits, may take note. Some U.S. metros continue courting foreign buyers but Canada’s about-face reflects the political risk of relying too heavily on that model.

— Judah Duke