How a ban on foreign homebuyers could hurt immigrant retention on P.E.I.

Realtor Wei Chen (left) and client Dany Yang look at P.E.I. real estate listings. With new federal rules now in effect, Yang is no longer able to buy a home in the Charlottetown area.  (Steve Bruce/CBC - image credit)
Realtor Wei Chen (left) and client Dany Yang look at P.E.I. real estate listings. With new federal rules now in effect, Yang is no longer able to buy a home in the Charlottetown area. (Steve Bruce/CBC - image credit)

For Dany Yang, life on P.E.I. hasn't exactly gone as planned so far.

Yang moved here from Shanghai, China with her husband and teenage son in August, and rented a small apartment in Charlottetown.

For months they searched, unsuccessfully, for a home to buy in the city. Now, it's too late.

"According to this new policy, we can't buy a house until we get permanent residency.  This is not good for us," said Yang.  "We have a rental. But for me, there is no sense of belonging. It's better to have a house."

CBC
CBC

On Jan. 1, new federal rules took effect that ban most non-citizens and permanent residents from buying houses in Canada for the next two years.

There are some exemptions, including:

  • international students who meet certain requirements;

  • foreign workers who have filed tax returns in Canada in three of the last four years; and

  • those purchasing homes in predominantly rural areas, well outside urban centres like Charlottetown and Summerside.

Yang doesn't fall into any of those categories.

"I feel frustrated," she said. "I want to be in the city. It's more convenient for us to be near friends, to build our business, and for my son to go to school."

'Most of them will plan to move'

Yang's realtor, Wei Chen, says that frustration is shared by most of her clients. They're primarily new immigrants to P.E.I. who have work permits through the Provincial Nominee Program, and won't have permanent residency for at least a few years.

Chen said they're eager to buy homes in the Charlottetown area. Now they'll have to rent, with limited options available to them, given P.E.I.'s tight rental market.

"So this has reduced their feeling of belonging here. If you live in your own house compared to a rental, it's totally different," she said. "After the two-year ban is lifted, I think maybe most of them will plan to move to the big city [outside P.E.I.], because the experience here may not be good enough to get them to stay here."

Steve Bruce/CBC
Steve Bruce/CBC

As it stands, P.E.I.'s immigrant retention rate is by far the worst in the country. Only about a third of those who moved to the Island in 2015 were still here in 2020.

P.E.I.'s Real Estate Association predicts the foreign buyers' ban will hurt the province's efforts to get more immigrants to stay for the long haul.

During consultations on the proposed ban back in September, the association wrote in a letter: "Through the Provincial Nominee Program, Islanders have welcomed immigrants from around the world. These individuals move to P.E.I., start businesses, raise families, and stimulate our economy. If they are prevented from home ownership, they will choose to immigrate elsewhere."

Stopping foreign investors 

According to the federal government, the aim of the new law is stop foreign investors from buying up Canadian real estate and driving up already-high home prices.

P.E.I. Real Estate Association president James Marjerrison said there are no clear statistics on how many Island homes have been purchased by foreign buyers in recent years, or how much that's contributed to rising prices here.

"Certainly it's had an impact, but I don't think it's been the main driving force in our market on P.E.I.," he said. "Certainly the driver was low interest rates — almost-free money for a number of years. I think that was the main driver. I wouldn't peg it to foreign buyers by any means."

Steve Bruce/CBC
Steve Bruce/CBC

Marjerrison added that the recent sharp rise in interest rates is now cooling the housing market, "so I'd say the ban is unnecessary at this point. I think our market has slowed down and become more balanced in the last few months."

CBC News reached out to P.E.I.'s office of immigration for comment on the federal government's new ban, but didn't get a response.