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Mortgage Broker News | 05 Jan 2017, 08:15 AM Agree 0
The prolonged period of low exchange rates between Canada and the U.S. might lead to significant housing risk, however
  • Ronnie Kartman | 05 Jan 2017, 12:05 PM Agree 0
    About two years ago, the Canadian dollar sank as low as $.68 cents U.S. To suggest now that the low Canadian dollar will lead to more foreign buying is a bit late. It is my belief that foreign buying has become the main cause of the price of houses going up by 17-20% per year over the last few years. I further believe that the percentage of foreign (non-resident) ownership has been both underestimated and unreported. Banks are lending such investors at 35% LTV, with little attention paid to credit. For those foreign investors who had already leveraged a few million dollars with such purchases 2 years ago, they are already up by approximately 10% just on the exchange rate alone. We are likely getting to the point where the benefits to the construction industry no longer outweigh the excessive and insurmountable cost of housing. Dangerous times ahead. To the mortgage and real estate industry that has only seen modest corrections over the last 20 years, be afraid..be very afraid.
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