Many Canadian Residents can’t qualify for mortgage to buy a home while the foreign investors enjoy profit in Canadian Real Estate Market. Full story below:
‘No thank you,’ McKay says to unproductive capital in homes
Intensive bidding is beginning to ease as prices stabilize
Foreign inflows are distorting Canada’s already constrained housing market and aren’t the kind of investment the country needs, the chief executive officer of Royal Bank of Canada said.
McKay, whose bank is Canada’s largest mortgage lender, says he’s supportive of government taxes and other measures targeting foreign buyers, as well as other regulatory efforts to cool the country’s housing market. He’s seeing some impacts from these rule changes, with “a little bit more healthy dynamics.”
Canada’s housing market has been on edge this year as mortgage guidelines came into effect, making it harder for prospective buyers to qualify for loans.
A surge of foreign money into Canadian housing had been adding “gasoline” to markets in Vancouver and Toronto, McKay said. He identified a “cocktail of factors” that led to unconstrained growth of Toronto and Vancouver home prices, including a growing population, land constraints, lack of supply and highly stimulative interest rates that caused people to funnel more disposable income into their homes in addition foreign money.