The lack of housing is not a issue of attracting investment. Canada (and basically every other country with a housing price crisis) is perfectly capable of fund

The lack of housing is not a issue of attracting investment. Canada (and basically every other country with a housing price crisis) is perfectly capable of funding construction with domestic investment. It is, as you mentioned, an issue with policy. Until the policy is fixed, additional foreign investment is pointless and only serves to drive speculative price increases. It makes sense to deter it. In theory as countries apply similar policies across the world, the surplus countries driving these capital flows will be forced to either invest in developing countries that could actually use the funds, or park the cash domestically. That will force countries like China and Germany to deal with their issues internally instead of exporting them.