A leading Realtor and developer is frustrated by big banks’ ignorance about -- and unwillingness to provide lending for – an increasingly popular housing option; but perhaps monoline lenders can pick up the slack.
“There are certain Canadian banks that won’t fund condominiums below a certain size but there are a lot of B-lenders that will and so the biggest mistake that the A-lenders are making is not funding those,” Brad Lamb of Brad J. Lamb Realty told our sister publication, Canadian Real Estate Wealth. “They don’t actually know what they are doing.”
The condos Lamb is referring to are “Micro condos”, sub-400 square foot units that are gaining popularity in Canada after enjoying success in other over-populated markets such as Tokyo and New York City. And the problem, according to Lamb, is a complete lack of understanding on the lenders’ part.
“The problem is that the big five -- they don’t actually know what they are doing when it comes to the condo market,” Lamb said. “They are greatly mistaken and poorly informed of where they should be putting their money.”
Perhaps more frustrating, though, is that Lamb foresees a real need and desire for this sort of housing option.
“The funny thing is that they are prepared to lend money on the products that take the longest to sell and hardest to sell yet the properties that rent instantaneously and sell instantaneously are the ones that the most people can afford,” he said. “And what can most people afford? The smaller apartments and that is what everyone wants to (own).
“The banks should be lending on that stuff,” he added. “They are short-sighted and poorly informed about the market.”
Brad Lamb will be speaking at the 2014 Candian Real Estate Wealth Investor Forum, which will be held at the International Centre from March 22-23. Click here for more information.