Image source, Getty ImagesTrudeau wants a two-year ban on foreigners buying homes in Canada.
The country is grappling with some of the worst housing affordability issues in the world.
The average home in Canada is now more than nine times the average household income.
Industry analysts don't know if a ban on foreign buyers will address the problem.
There is limited data on purchases by foreign buyers in Canada.
Ben Myers, president of advisory firm Bullpenn Research and consulting in Toronto, said he didn't think it would have a huge impact.
The people that really want to buy it are going to find other ways to do it.
Strong population growth and a shortage of supply are due in part to rules that restrict development.
The issues have worsened since the Pandemic hit in 2020, when policymakers in Canada and elsewhere slashed interest rates to help the economy.
In Canada, the gap between home prices and incomes is one of the most dramatic in the world, according to data from the Organisation for Economic Co-operation and Development.
During his campaign for election last year, Mr Trudeau promised to tackle housing affordability.
The budget proposal his government unveiled on Thursday sets aside billions to spur new construction and proposes new programmes, such as a tax-free savings account for first-time buyers.
About one in five homes purchased in Canada since the beginning of the year have been bought by investors who favour certain bidding processes.
Those buying their primary residence would not be affected by the proposed ban on foreign buyers.
Some parts of Canada have already taken actions against out-of-town and foreign buyers.
Doug Ford, the premier of Ontario, recently announced plans to raise the tax on foreign buyers from 15% to 20%.
Steve Pomeroy, head of Focus consulting, a housing policy firm, said that taxing foreign purchases at least captures revenue that can be used to address affordability issues.
He said that banning them would not have much of an impact on suppressing rising home prices.
Foreign buyers were banned in New Zealand.
It is good politics because it is easy to blame a victim that nobody cares about.
The professor at the University of British Columbia and founder of Generation Squeeze said he didn't see much in Mr Trudeau's proposal to slow price increases or address affordability.
He said that it was not clear if the housing measures would be enough to break Canada's addiction to high and rising home prices.
Mr Pomeroy said he expects price appreciation to slow as the central bank raises interest rates. The Canadian housing market is particularly vulnerable to such moves since many buyers rely on five-year mortgages rather than long-term ones in the US and UK.
He warned that higher interest rates will make it harder for prospective buyers to break into the market.
The long-term plan is for hot markets such as Toronto and Vancouver to become dominated by renters, as regular buyers get priced out of the market, unless politicians address supply.
Mr Pomeroy said that high development costs mean that adding supply will not reduce prices.
Unless you have been born into the right family, the prospects for young buyers are not good.
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