A prominent Vancouver businessman and former city councillor says it's time to debate restricting foreign ownership of residential properties as a way to cool down Vancouver's hot real estate market.

Peter Ladner says Vancouver's home prices are out of control, and with China and Australia already restricting foreign ownership, Vancouverites should at least examine whether the idea makes sense.

"Ironically, many of the people driving up the prices are coming here from mainland China where soaring real estate prices have caused the Chinese government to introduce new limits on foreign purchases of residential or commercial property in the country," he wrote in a recent article published in Business in Vancouver.

Ladner says he isn't isn't taking a position on the issue, but he wants a debate. He notes there has been virtually no public research on the level of foreign ownership in Metro Vancouver and its effect.

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Former Vancouver city council Peter Ladner ran for mayor in the 2008 civic election but lost to Gregor Robertson. ((CBC))

But he says prices are forcing people raised in Metro Vancouver to move elsewhere and preventing others from moving to the area.

"If our prices are being driven up by people who are simply investing in our community and not living here, there are a whole lot of problems that result," Ladner told CBC News.

"You end up with a resort community that is unlivable despite our reputation as one of the most livable cities in the world."

Ladner notes across Canada, that PEI, Manitoba, Saskatchewan and Alberta already have various laws in place the restrict the non-residents' rights to buy land. 

Vancouver leads with unaffordable housing

Tsur Somerville of the UBC Sauder School of Business says the debate over foreign ownership would be nothing new.

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The number of sales was 30 per cent lower and the number of listings was 30 per cent higher in Vancouver in June 2010, compared to June 2009. ((CBC) )

"If you go back to the 1980s, and the worry about Hongcouver, and all these kinds of things, Vancouver has been through this story before and I think most people think this city is better off now than it was in 1987," said Somerville.

Vancouver has the highest housing prices in Canada, the greatest price increases, and the world's least affordable housing prices, according to recent figures. 

Some of the most rapid price increases around Metro Vancouver have been in Richmond where the price for a detached home has climbed 20 per cent, or about $215,000 over the past year to above the $1-million mark.

Realtor have attributed the rapid price increases to a sudden influx of mainland Chinese buyers, but in recent months many realtors have noted mainland Chinese buyers have been active in many of the region's other more expensive markets, such as the West Side of Vancouver and the North Shore.