In January 2023 Canada banned foreign nationals from buying homes with notable exemptions for permanent residents and temporary residents, including temporary workers and international students. As of March 27, 2023 there were 4 amendments to the Foreign Buyer Ban:

1) Amendments allow those holding a work permit or those authorized to work in Canada under the Immigration and Refugee Protection Regulations to buy residential property. Work permit holders are eligible if they have 183 days or more of validity remaining on their work permit or work authorization and haven’t purchased more than one residential property. 

2) Allows non-Canadians to purchase residential property for the purpose of development. The amendments extend the exception currently applicable to publicly traded corporations to publicly traded entities formed under the laws of Canada or a province and controlled by a non-Canadian.

3) The prohibition doesn’t apply to lands zoned for residential and mixed use. Vacant land zoned for residential and mixed use can now be bought by non-Canadians and used for any purpose by the buyer, including residential development.

4) Increase foreign control threshold to 10% from 3%
For privately held Canadian corporations or entities controlled by a non-Canadian, the control threshold has increased to 10 per cent from three per cent. This aligns with the definition of ‘specified Canadian Corporation’ in the Underused Housing Tax Act.

If you have any questions about what this means for you, contact the ALL VANCOUVER GROUP TEAM


What You Need to Know About the Down Payment for Rental Property

 Down Payment Image 1

Finding the money to make the down payment on a property is going to be one of your biggest hurdles when looking to buy an investment property. Even if you already live in your own home and are fairly familiar with the process of getting a mortgage approval, this is still going to be a challenge.

That’s because the requirements for investment property loans are significantly different from those for residential property loans. Your primary home is a basic human need, so lenders make it easier to buy that home. But when you buy a rental home, you are not meeting a basic need; it is business.

Due to this fact, lenders are going to subject you to the same level of scrutiny that they subject businesses to. This is why getting approved for rental property mortgage is harder. Lenders view rental property loans as carrying more risk than a loan to buy your primary residence.

Why is that?

There is a greater rate of default on rental property loans than residential property mortgages. Most borrowers will keep up with mortgage payments if there is a risk of them losing the home and becoming homeless. But, since the majority of landlords don’t live in their rental property, they don’t face this risk.

As a result, property investors may not have the same motivation to be timely with mortgage payments as people who live in their own homes. The result is that a landlord can afford to be careless about repaying a mortgage loan since they are not likely to suffer any personal losses if the home goes into foreclosure.

How do lenders protect themselves against this risk?

Downpayment blog 2 

They impose more stringent conditions on people who apply for an investment property loan. Those tougher conditions are designed to test the financial competence of the individual and their trustworthiness as far as financial matters are concerned.

Because of this, lenders want to see a track record of handling money with savvy, and they get this information from the individual’s credit score and history. Secondly, they want to know if the person has the financial capacity to handle the additional burden of a second mortgage.

These are the reasons why lenders expect that when applying for a rental property loan in Canada, you must have the following:

  • A minimum credit score of 680, even though this is only enough to get you the least-favorable terms.
  • Proof of income, the details of which will depend on whether you have a job or own a business.
  • Emergency funds that are easily accessible and sufficient to pay the loan closing costs.
  • Savings worth six months of mortgage payments for your home and the rental.

However, the criterion that is often the hardest to meet is the down payment. Since 2010, a down payment is the standard requirement for getting rental property mortgage in Canada. This can be as low as 5% or as high as 20%, depending on the detail of your application.

What you should know about the down payment on rental properties

The two main things that determine how much lenders will ask you to provide as down payment are the number of units in the property and whether  you will live in the home or not

  • The number of units in the property

 Downpayment blog 3

Investment properties in Canada are in two categories: residential properties and commercial properties. Residential properties are buildings with no more than four units, while commercial buildings have more than four units.

Commercial properties have stiffer conditions, but in this article, our focus is on residential properties. Depending on the number of units in a residential building, investors will be asked to make a down payment of 5% to 20% of the purchase price of the building.

  • Owner-occupied versus Non-owner-occupied

 Downpayment blog 4

Buildings where the owner of the rental property lives in one of the units attract smaller down payments. This is because such buildings have a risk profile similar to living in your own home. Since the owner also occupies the building loan default rates for such properties are lower.

Based on these two factors, here is what you can expect as a down payment when buying a rental property in Canada:

  • For buildings with 1-2 units where the owner lives in one of the units, the down payment is 5%.
  • For buildings with 1-2 units where the owner does not live on the property, the down payment is 20%.
  • For buildings with 3-4 units where the owner lives in one of the units, the down payment is 10%.
  • For buildings with 3-4 units where the owner does not live on the property, the down payment is 20%.

For all non-owner-occupied buildings, you can expect a minimum of 20% as a down payment. However, for owners of owner-occupied buildings where the purchase price of the home exceeds $500,000, there are additional conditions. For the first $500,000 the owner is expected to pay 5% (if the building has 2 units) and a further 10% for any amount above that $500,000.


Written by the REBGV: February Real Estate Stats

February listing data show a continued reluctance among prospective home sellers to engage in Metro Vancouver’s housing market, leading to below-average sales activity. With sales remaining well-below historical norms, the number of available homes for sale in the region have continued inching upwards. 

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,808 in February 2023, a 47.2 per cent decrease from the 3,424 sales recorded in February 2022, and a 76.9 per cent increase from the 1,022 homes sold in January 2023. 

Last month’s sales were 33 per cent below the 10-year February sales average. 

“It’s hard to sell what you don’t have, and with new listing activity remaining among the lowest in recent history, sales are struggling to hit typical levels for this point in the year,” said Andrew Lis, REBGV’s director, economics and data analytics. “On the plus side for prospective buyers, the below-average sales activity is allowing inventory to accumulate, which is keeping market conditions from straying too deeply into sellers’ market territory, particularly in the more affordably priced segments.”

There were 3,467 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in February 2023. This represents a 36.6 per cent decrease compared to the 5,471 homes listed in February 2022 and a 5.2 per cent increase compared to January 2023 when 3,297 homes were listed. 

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 7,868, a 16.7 per cent increase compared to February 2022 (6,742) and a 5.2 per cent increase compared to January 2023 (7,478). 

“While we continue to expect home price trends to show year-over-year declines for a few more months, current data and market activity suggest pricing is firming up. In fact, some leading indicators suggest we may see modest price increases this spring, particularly if sales activity increases and mortgage rates hold steady,” Lis said. “In the somewhat unusual market environment we find ourselves in right now with higher mortgage rates, fewer sales, and inventory that is inching higher but remains far from abundant, working with a Realtor who understands your local market conditions and has experience navigating challenging markets is paramount.” 

For all property types, the sales-to-active listings ratio for February 2023 is 23 per cent. By property type, the ratio is 16.8 per cent for detached homes, 30.1 per cent for townhomes, and 25.8 per cent for apartments. 

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months. 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,123,400. This represents a 9.3 per cent decrease over February 2022 and a 1.1 per cent increase compared to January 2023. 

Sales of detached homes in February 2023 reached 514, a 49.1 per cent decrease from the 1,010 detached sales recorded in February 2022. The benchmark price for detached properties is $1,813,100. This represents a 12 per cent decrease from February 2022 and a 0.7 per cent increase compared to January 2023. 

Sales of apartment homes reached 928 in February 2023, a 49.9 per cent decrease compared to the 1,854 sales in February 2022. The benchmark price of an apartment property is $732,200. This represents a three per cent decrease from February 2022 and a 1.6 per cent increase compared to January 2023. 

Attached home sales in February 2023 totalled 366, a 34.6 per cent decrease compared to the 560 sales in February 2022. The benchmark price of an attached unit is $1,038,500. This represents a 6.3 per cent decrease from February 2022 and a 1.8 per cent increase compared to January 2023. 

Reciprocity Logo The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.