It is of course a good thing to compare the Canadian charm bolt Justin Trudeau with Donald Trump, of all things, that two and a half hundredweight steam hammer that had also strained the United States’ relations with its northern neighbor for years. And yet a columnist for the Bloomberg news agency has done just that: Trudeau is certainly a different type, but the prime minister is increasingly reaching into the same populist bag of tricks that Trump has always used.
One of the things that gets the commentator going is Trudeau’s announcement that if he wins the parliamentary election in three weeks’ time, foreigners will be banned from buying Canadian houses and apartments for two years. This is not about the poor eater who wants to start a new life somewhere in the vastness of the second largest country on earth. Rather, Trudeau is looking at rich speculators from China, Russia and the Arab Emirates, who have also contributed to driving real estate prices to dizzying heights in Canada. More and more citizens are therefore unable to find affordable accommodation, and at the same time tens of thousands of apartments are empty: Many investors do not buy their domicile to live in, but because they see it as a lucrative investment.
The drastic rise in house prices, especially in large cities such as Vancouver and Toronto, has become the most important issue of the election campaign in recent weeks. In the national average, a house last cost almost 700,000 Canadian dollars (around 480,000 euros) – 38 percent more than a year ago. The front runner is the west coast metropolis of Vancouver, which is particularly popular with Chinese investors. The city council already levies a vacancy tax for so-called “haunted houses” as well as a purchase tax of 20 percent for buyers who do not have a place of residence in Canada. However, neither has stopped the price boom nor increased the supply of small and medium-sized apartments.
In many countries politicians are looking for ways to stop the house price boom
In addition to the head of government, the top candidates of the other parties have therefore also submitted proposals to curb speculation, above all Trudeau’s greatest rival Erin O’Toole. The head of the Conservative Party accused the incumbent of having “six years to do something and not getting it right.” Trudeau, whose poll lead has recently shrunk over O’Toole, said no longer should we watch “foreign wealth be parked in homes where people should live”. It is “not okay that you cannot build a life of your own in the environment in which you grew up, you cannot start a family and can no longer grow old,” said the head of government.
Should Trudeau actually implement the plans, this could set an example far beyond Canada. All over the world, rulers and their challengers are looking for ways to slow down or even stop the house price boom – so far without resounding success. This is also due to the fact that, in view of the low interest rates and high share prices, apartments are regarded by investors as both lucrative and stable investments. The pandemic has increased demand – for example in the USA, where, in addition to foreigners, many well-paid locals are also looking for a larger apartment or a second home with space for a home office.
In his Bloomberg column, the author Trudeau admits, by the way, to have ideas that would be far more effective in the fight against the house price boom than those discussed now – above all the massive support for new buildings. Such recipes are clearly not sensational enough for an election campaign. “To hold foreigners responsible for problems at home is politically more tempting,” the commentator concluded. Just Trump.